Information Systems and Strategy Management of ASIC Company - Case Study Example

Running header: INFORMATION SYSTEMS AND STRATEGY MANAGEMENT Your Introduction Contemporary business environment coupled with rapid developments in technology, and the advent of vibrant borderless markets requires appropriate information management analysis to formulate a competitive market advantage by organisations. The demand for strategic information and manoeuvres has been accelerated by the onset of sharp competition, shrinking product shelf life, and outsourcing hence the need for organisations to exert some leverage in the increasingly highly competitive environment. For ESIC, the power supply monolith, it faces a unique problem of accommodating rivals in its previously monopolistic markets turf. The firm must therefore radically change its information management systems to survive against the expected challenge. Background The European Union electricity supply sector represents a market share of over €150 billion annually, an annual investment of €30 billion Euros, while it employs over 750, 000 workers. The Electricity Supply Industry (ESIC) has a virtual monopoly in the European Union power supply industry, but the EU has decided to open up the market hence create competition for ESIC. In order for the power supply company, ESIC transform from a monopolistic system into a highly competitive market oriented firm, it needs to radically overhaul its information management systems. This will involve the company adopting a modern information technology (IT) system that incorporates all the firm’s divisions including the financial, production, and marketing sectors. Customer Oriented Culture Contemporary organizations have come to value the crucial importance of customer service to their continued survival. Firms with good customer oriented policies are able to able to maintain client royalty albeit the current fierce competition. The release of correct, regular and appropriate product information to workers, clients and providers across all channels is one of the fundamentals in retaining and acquiring new clientele. ESIC emerging from a monopolistic system will therefore need to change her information dissemination sector by revealing new products innovation information, financial dealings, among other news hence change her corporate image. ESIC must be geared to offer high quality customer service to her clientele by creating a seamless customer rapport across all the channels (generating, transmission, system control, distribution, supply sectors) by developing strategies aimed at surpassing the competing firms. Company products and information should be easily accessed either through the normal supply chains, but also using new technology like the internet for information, purchase, and feedback from the customers hence always ensuring ASIC is aptly aware of its clients’ requirements. Product information enhances stronger client ties hence improves sales. At eBay.com, the online market bazaar has managed to maintain a competitive edge by integrating veritable customer service and providing her clients with easily accessible shopping forums as well as innovative simplified shopping marts (Chen, 2005). ESIC must ensure that the system introduced is not too complex for the clients while providing chat-rooms that give feedback to the organisation. Financial Efficiency To survive in the market, Porter’s (1980) indicates three generic strategies in form of: a differentiated product or service; lowered cost; and, or concentrating on a specific market sector. ASIC is already uniquely placed to exercise innovative products due to its long association in the market, lower cost price as opposed to the costly entry cost of competitors, and may concentrate on one specific sector like power generating or just mere supply. This strategies may reduce the production costs hence enhance financial efficiency. ASIC must implement an efficient information system with proficient technological equipment and systems that assist in the acquisition, preservation, and propagation of the information. The main types of information systems adopted must incorporate the financial, operational, and the strategic sectors. However the major challenge will be to leverage the information system to exploit the organisations competencies to create a competitive advantage. ASIC must implement a novel financial information strategy including a new accounting system that is interlinked with all the other operating systems hence ensuring a better controlled information system stratagem. A good financial system provides proper strategic information for planning and budgeting while ensuring company revenues are objectively analyzed. The financial system is the basis of all other systems and incorporates basic IT accounting, budgeting, and other financial operations. The company’s operations are therefore controlled by the financial system. The system must have for capacity scheduling, technology planning, and staff aptitude planning. Learning and Growth Hansen, Nohria & Tierney, (1999); Mentzas & Young (2001), stipulate the edict of ‘knowledge as a product’ whereby information is positioned and maneuvered as an autonomous entity, hence an organization is able to gather, dispense, quantify, and control the information in a ‘content-centered’ or ‘codification’ approach. Information technology acts as the medium that enables knowledge flow between various people hence serving as the principal linkage for the major components in the information system. These comprise the approach, groups, expansion, material, equipment of the information to all the required sectors, from the suppliers, marketers, distributors, customers, among others (Robertson, 2005). ASIC must develop its research and development department to encompass new technology innovation hence enhance the capacity to compete with international firms. Using online technologies like Wiki or other internet forums, ASIC can rapidly enhance her technology by sharing and receiving information from diverse forums hence reduce the production timeline on new innovations. Employees, suppliers, and customers must also be educated on new technological innovations using available information systems. The easier and faster new products, services, systems, and ideas are assimilated by all the stake holders, the better for ASIC as organisational royalty will be retained. The information dissemination must also be made accessible and discernable in the simplest form. Internal Process Improvement Kalyanaramkumar (2003) stipulates that with the advent of IT, the formerly intricate supply chain management (SCM) need to be integrated strategically to the system, not only to condense the unified singular channel, but also to enhance the innovation by reducing the “encumbrances of dealing sequentially with the transfer of critical marketplace information and the traditional movement of inventory between collection points on their way up and down the supply channel” (Kalyanaramkumar, p.107). ASIC as power supply company must ensure its supply chain management (SCM) incorporates information management systems that enhance or reinforce the system rather than be an impediment. ASIC will integrate new cutting edge technology like the new manufacturing execution system (MES), which enable a manufacturing plant to detect any defect in production chain in real time rather than the traditional method of halting the plant indefinitely. Problems emanating from a supplier are easily diagnosed hence cutting the production time and costs to give the company a competitive edge over those firms who have not yet renovated their techniques (Kall, 1999). ASIC should also ensure all her new products are promptly released to the market using innovative marketing strategies including the correct advertising and retailing strategies. The firm must ensure the existing lethargic distribution system are overhauled to be replaced by a more efficient system that incorporates innovative technology like internet, outsourcing, and withdrawing old products from the market to ease distribution costs. Swanson (1994) however argues that information technology should not be viewed in isolation hence to ensure an effective leverage using the information system (IS), it must be properly integrated with the other business strategies. He stipulates three types of innovation to streamline the sector: internal innovation of the information technology (IT) procedures and management; the improvement of the management systems that incorporate the IT sector to improve their use; and the innovation of the IT products and services to enhance the competitive advantage of the organisation. Information management therefore encompass “all the systems and processes within an organization for the creation and use of corporate information” (Robertson, 2005, p. 1). This includes: all the people involved in the supply chain; the processes; technological equipment; and the content or data infused. Problems in Implementation The integration of information systems (IS) is often a complex and daunting task with many organisations lacking the capacity to fully exert any tangible marketing leverage over their competitors while using many of these modern electronic systems. ASIC can expect to face a series of setbacks before the information management systems (IMS) is properly functioning. Robertson (2005) list a number of problems encountered by various organisations in the execution including: firms implementing many varied disparate IS systems; minimal assimilation or synchronization of the differing systems; a combination of new and obsolete system that are incompatible; disparate competing systems; lack of centralised information management; inadequate or minimal adoption of the system by organisation staff; inadequate information assimilated with marked inconsistencies, replication; obsolete data; poor support for the IT sector by top management; poor knowledge of information terminology by staff; large menu of organisation requests and subjects to be tackled; lack of management stratagem; reluctance of personnel to assimilate new ideas within the organisation; and intra-company politics and conflicts. (Robertson, 2005) Conclusion Using the highlighted information management system, ASIC can manage to withstand new competitors in the European Union gas supply market. Similarly, the company can overcome the expected teething problems in the setting of the new IMS. This will require the integration of the all the appropriate information management system strategies including an integrated new financial system, marketing, and distribution systems, all incorporating a modern IT system. Customer oriented system are crucial to enhance royalty within the supply chain, while client education must be reinforced by utilising current IT channels and mobility. This will immediately give the organisation leverage to withstand the expected onslaught from the new competitors. Appendix 1 ASIC information management stratagem is represented in the following diagram whereby a system incorporating a customer oriented culture, incorporate financial efficiency, internal process improvement, and then learning and growth. Figure 1: ESIC Strategic IMS Processes References Chen, E. T. (2005). Leveraging IT for a Competitive Advantage— Case of eBAY. Issues in Information Systems , Volume VI, No. 2, pp. 77-82. Hansen, M. T. (1999). What’s your strategy for managing knowledge? Harvard Business Review , 107-116. Kall, J. (1999, August). Manufacturing Execution Systems. Retrieved August 24, 2009, from Quality Digest: http://www.qualitydigest.com/aug99/current/html Kalyanaramkumar, B. K. (2003). Leveraging the Supply Chain Advantage. The School of Business Logistics , 107. Kauffman, R. J. (2005). Information Systems in Competitive Strategies: Offshoring, Risk Management, Strategic Pricing, E-Sourcing, and Standards. Journal of Management Information Systems , Vol. 22 No. 2, pp. 7 - 14 . M.E. Porter, a. V. (1985). How Information Gives You a Competitive Advantage. Harvard Business Review , Vol 63, 4; pp.149-160. Mentzas, R. Y. (2001). Knowledge Asset Management: Strategy, Processes and Systems for Leveraging Corporate Knowledge. London: Ark Group Ltd . Porter, M. E. (1980). Competitive Strategy . New York, NY: Free Press. Robertson, J. (2005, November 1). 10 principles of effective information management. Retrieved August 25, 2009, from Steptwo.com: http://www.steptwo.com.au/information_technology/ Swanson, E. (1994). Information Systems Innovation Among Organizations. Journal of The Institute of Management Science , Vol 20, Number 9, pp.1069-1092. . Vice, J. (1997). Leveraging Information Technology to Maximize Competitive Advantage. Journal of the Institute of Management Sciences , 1601-1627; Vol. 40, No.12. Read More