Information Technology in the Business: Schneider National - Case Study Example

Schneider National Case study Report Authors Name Institutional Affiliation Table of Contents Table of Contents 2 Executive Summary 3 Business Strategy by Schneider National 4 Telecommunications and Information Systems in the Strategy 4 How the Systems Provide Value for Schneider National 5 Organizational, Management, and Technology Issues that were Addressed by the Implementation of IT in Schneider National’s Operations 6 How Schneider's information systems changed its business processes 7 Increased Record Keeping 7 Increased Productivity and Enhanced Customer Service 8 Employee Efficiency and Retention 9 Has Schneider National's reliance upon information systems been successful? 10 Is the company transforming itself into a digital firm? 10 Conclusion 11 References 13 Executive Summary The report is divided into sections that are well elaborate on the issues following the implementation of IT infrastructure in Schneider International. The first part introduces the report giving a rough idea on what to expect. The next section evaluates the role played by the telecommunication and Information Technology (IT) systems. The same section discusses the value of the systems to Schneider National. The next section addresses the organizational, managerial and information technology issues that the organization had to deal with after the implementation. The next section looks at the changed business processes in the organization taking the form of the importance of such systems in organizations. The next section evaluates the success of the reliance on the IT systems by the organization. This section also addresses the question on whether the organization is going to be digital. The last section concludes the report highlighting key issues with IT systems. Introduction Information technology and telecommunication systems have a positive impact on businesses all over the world. Most business entities both small and large are on the verge of transforming their operations into digital based on the corresponding advantages of such systems. The sum total of implementation of such strategies is the encounter of management, organizational and IT related issues that are nearly impossible to avoid. This paper evaluates the case study of Schneider National, a major trucking company that was established in 1980s and took root of transformation when the regulations in the industry were weakened, establishing its business strategies, the issues brought by the implementation of the strategy and later a concrete evaluation on the position of the company as either digitally successful or not. Business Strategy by Schneider National Business strategy refers to the plans, decisions, and choices by a business or organization to propel it towards high profit margins and success in general (Kourdi, 2009). With a carefully selected business strategy, comes the success of the organization contrary to a weak business strategy that will risk the stumbling down of an already established organization (Kourdi, 2009). Business strategies differ across the board based on the industry and environment the organization is operating (Kourdi, 2009). Schneider National is an example of an organization that took hold of a strong business strategy to its advantage and thus became successful in the industry (Laudon & Laudon, 2004). Schneider National’s core business strategy was realized through the integration of computer systems in the operations of the company. The business strategy took the form of two major processes (Laudon & Laudon, 2004). This included effective and efficient customer management systems and the fleet management and logistics systems that optimized the operation of the organization (Laudon & Laudon, 2004). Telecommunications and Information Systems in the Strategy The organization had a call center located in its headquarters. The Organizations website and Electronic data Interchange (EDI) system were used in receiving customer orders as of the year 2000, this accounted for 50% of the orders (Laudon & Laudon, 2004). The company also invested on fleet tracking system; OmniTracs that is a satellite driven positioning and communication system (Laudon & Laudon, 2004). Additionally the company also invested in SensorTracs, another system that would collect the trucks details via satellite. The two systems were developed by Qualcomm (Laudon & Laudon, 2004). The company is also yet to apply the use of a wireless trail-tracker system that so as to increase revenue and reduce the costs of operation. The company also has global scheduling system that monitors the drivers and the loads all over the country. The Global Scheduling System and the Trailer-Tracker systems are also some wireless systems used in the organization (Laudon & Laudon, 2004). How the Systems Provide Value for Schneider National The Website and EDI resulted into improved accuracy in ordering as well optimized productivity of the company (Laudon & Laudon, 2004). They reduced the response time between sending an order and receiving a response on when and what truck will arrive (Laudon & Laudon, 2004). EDI and the Web were also used in electronic invoicing with more inclination to the Web since it was relatively cheap. The customers are able to access information real-time such as when the deliveries will be made, by what truck, the routes and when to plan for pickups. OmniTracs enables the drivers to communicate with the company so as to reduce any inconveniences such as snarl ups on roads and delays due to checks on the roads (Laudon & Laudon, 2004). SensorTracs on the other hand improves the drivers’ income through increasing their billable distance coverage (Laudon & Laudon, 2004). The sum total value of all the systems is timely deliveries, reduction of costs of operations and establishment of good relationship between the workers and the organization as well as the customers (Neiger, Churilov, Flitman, & Rotaru, 2009). The drivers are easily retained reducing on the cost of training new workers or outsourcing. Organizational, Management, and Technology Issues that were Addressed by the Implementation of IT in Schneider National’s Operations Change in the structure of an organization introduces a variety of issues that must be addressed by the organization’s leadership. The issues could be organizational; such as change in technology, internal and external politics, and external consultancy (Anderson, 2010). Management issues include budgeting, personnel, strategic planning, training needs, and general management (Karami, 2007). Information Technology related issues could include such things as compatibility, old systems, implementation process and standardization (Karami, 2007). Additionally, the challenge of the method of implementation of such systems and infrastructure is also faced by IT departments of organizations (Karami, 2007). Schneider National had to address organizational issues such as change in the old ways of doing things all the operations of the company was now computerized (Laudon & Laudon, 2004). From order processing, invoicing and payments the systems in place brought in a paradigm shift in the organization (Laudon & Laudon, 2004). All the customers had to be convinced to use the new systems in place. Secondly, the organization had to increase its size to cater for the increasing number of customers (Laudon & Laudon, 2004). Change in numbers equally changes the structure of the organization (Anderson, 2010). Management wise, Schneider National had to invest in new systems that would help in the management of customers, the flow of goods and the personnel who in this case are drivers (Laudon & Laudon, 2004). There is also the cost of the systems as well as that of training new employees (Laudon & Laudon, 2004). The organization also used its system to retain drivers catching up with the challenge of shortage of drivers in the industry. This in essence had to place the organization well strategically compared to the other companies in the industry (Laudon & Laudon, 2004). The other issue is security of the systems IT infrastructure are very fragile and any security breach may fault the whole system (Frost, 2014). Frost (2014) asserts that this challenge is faced by any organization aspiring to implement IT into its operations. The other issue is employee resistance of the new systems due to lack of knowhow to use them (Frost, 2014). Of course the company had to iron out this through training of employees (Laudon & Laudon, 2004). The other barrier is the strategic planning process. This is very hectic especially when deciding on the ways to implement the strategy (Laudon & Laudon, 2004). How Schneider's information systems changed its business processes The information systems at Schneider National were majorly meant for customer management and fleet management. There are eminent changes brought about by the systems. Increased Record Keeping Fleet management systems as well as the customer management systems are able to keep records of all the entries in a database that is housed either in a centralized or decentralized location (Expert Market, 2014; Karami, 2007). The records are up to date and can be accessed at the press of a button (Sylvan, 2014). These entries include mileage covered and records of employees that are useful in auditing and planning processes in the organization (Laudon & Laudon, 2004). The customer service representatives at the call center can easily access the historical information of the customers and respond to their questions effectively (Poulsen, 2014). Increased Productivity and Enhanced Customer Service The customers are able to place their orders through the internet and then track its movement through the same platform since there is interconnection between the fleet and the company networks as well as the customers; it is a three way communication system (Laudon & Laudon, 2004). The GPS systems aid in locating drivers and advising then where there are road checks so that they prepare the necessary documents at hand (Laudon & Laudon, 2004). Additionally, the company is also able to reduce the time wasted in going for trailers only to find they are loaded (Expert Market, 2014; Poulsen, 2014). This is achieved through the use of SensorTracs system. The company is able to plan adequately so as to meet the customer requirements on time; this is referred to as customer relationship management (Laudon & Laudon, 2004; Sylvan, 2014). Based on the data the company is able to budget on fuel and track the vehicles’ life cycles making replacements and maintenance where necessary. The Web and EDI enable the customers to place orders and get feedbacks on which trucks will be making deliveries and when (Laudon & Laudon, 2004). The customers are therefore able to plan their schedules so that they pick the goods upon arrival without any inconveniences (Sylvan, 2014). Information systems have the advantage of engaging the customers to be part of the company process (Sylvan, 2014). There is also coordination between drivers and the dispatchers so as to clear any pending delays. This is made possible by the OmniTracs system (Laudon & Laudon, 2004). SensorTracs also enable the company to collect data about the trucks thus maintenance of the vehicles. Additionally, the driver’s income is also increased after analysis of the operational data of the truck (Laudon & Laudon, 2004). The driver may work hard to fulfill all the necessary requirements in order to get the bonus. Trailer tracker system tracks the trailer so as to reduce time wastage when sending a driver off-route to areas where the trailer is actually loaded (Laudon & Laudon, 2004). This increases the utilization of fuel thus reducing costs of operations (Laudon & Laudon, 2004). The systems also create loyalty of the customers since they are given the services from their own preferences based on their historical data (Poulsen, 2014; Sylvan, 2014). Employee Efficiency and Retention The tracking systems ensure that employees stick to the routes and the jobs that are assigned to them (Expert Market, 2014). The excuses of traffic jams are evaded handy since the drivers are informed where there are jams so that they can avoid them. Expert Market (2014) note that such systems confer an advantage to the driver since it increases their payable mileage (Laudon & Laudon, 2004). The employees are also able to be retained in the organization (Laudon & Laudon, 2004). The drivers are able to communicate with their families thus reducing the pressure often put on them. This is enabled by the touch home program that is within the trucks. The payable mileage is also increased IT systems usage, as a result the employees are able to be compensated in an adequate way creating loyalty to the organization in question (Information Resources Management Association & Khosrow-Pour, 2001) Has Schneider National's reliance upon information systems been successful? The advantages that come together with IT infrastructure implementation are all evident in Schneider National. There is customer satisfaction reflected by lack of resistance when the systems are introduced (Information Resources Management Association & Khosrow-Pour, 2001). Secondly, the customer services are improved thus making the customers to be satisfied with the services (Laudon & Laudon, 2004). The organization is also transformed in various aspects such as management since the employees are able to be retained (Laudon & Laudon, 2004). Few organizations allow employees to link up with their families and this could lead to many people avoiding such organizations. Schneider National is not one such; this is because the employees (drivers) are able to access their families while on duty (Laudon & Laudon, 2004). This is also another aspect that makes the drivers satisfied with the organization. The organization is also able to budget based on the data obtained from various systems on the fuel and maintenance costs to be incurred (Laudon & Laudon, 2004). Is the company transforming itself into a digital firm? The best answer to this question would be yes. This is because all the operations in the organization are done through computerized systems (Laudon & Laudon, 2004). There is less or little paper work that exists in the office. As evident from the case study, Schneider National has its affiliated company Schneider Logistics that offers IT and Supply chain management services to the company as well as others that can source for such services. The company is also aiming to drive all its operations to be Web based (Laudon & Laudon, 2004). This is probably to increase its consumer base and the efficiency at an affordable rate compared to a centralized system in its headquarters, the EDI. The company is also associating with Qualcomm a wireless communication company based in San Diego (Laudon & Laudon, 2004). The company develops most of the systems used in Schneider national this includes OmniTracs that cost Schneider National $30 million to purchase. The software is SensorTracs that collects data about the vehicles. Lastly, the same company is also working on Trailer-Tracking system. The company also has Global Scheduling systems (GSS) (Laudon & Laudon, 2004). As it seems therefore the company might go ultimately digital in the next few years. This would not be complete without mentioning the project between the company and Network Computing magazine to develop a website that will manage all the logistics of the company (Laudon & Laudon, 2004). Conclusion Information technology has a number of advantages that in turn confer advantages over a company that implements such as part of its strategy. Customer relationship and employee relationship can be optimized through use of such systems as customer relationship management systems and fleet management systems. Schneider National is a company that has proven that truly IT integration into business process can give a company competitive advantage over its peers. Feared most is the cost of installation of such systems. However, the cost of installation and maintenance compared to the advantages is a risk worth taking. Schneider has invested in Fleet management systems such as OmniTracs, Global Scheduling System, SensorTracs and Trailer-Tracker system as well as customer management systems that it is exploiting to its advantage. References Anderson, D. L. (2010). Organization development: The process of leading organizational change. Los Angeles: Sage. Expert Market. (2014). Fleet Management Systems | 5 Benefits for Your Company | Expert Market. Retrieved from http://vehicletracking.expertmarket.co.uk/fleet-management-benefits Frost, S. (2014). Barriers & Challenges to Change Implementation | Chron.com. Retrieved from http://smallbusiness.chron.com/barriers-challenges-change-implementation-30842.html Information Resources Management Association., & Khosrow-Pour, M. (2001). Managing information technology in a global environment. Hershey, PA: Idea Group Publishing. Karami, A. (2007). Strategy formulation in entrepreneurial firms. Aldershot, England: Ashgate. Kourdi, J. (2009). Business strategy: A guide to taking your business forward. London, Eng: Economist in association with Profile Books. Laudon, K. C., & Laudon, J. P. (2004). Management information systems: Managing the digital firm (8th ed.). Neiger, D., Churilov, L., Flitman, A., & Rotaru, K. (2009). Value-focused process engineering: A systems approach : with applications to human resource management. New York: Springer. Poulsen, L. (2014). 5 Reasons Why CRM Is Important for Small Businesses - BusinessBee. Retrieved from http://www.businessbee.com/resources/sales/customer-relationship-management/5-reasons-why-crm-is-important-for-small-businesses/ Sylvan, R. (2014). Tangible Benefits of Information Systems | Chron.com. Retrieved from http://smallbusiness.chron.com/tangible-benefits-information-systems-50155.html Read More