Information Systems Enhancing Organisational Work: The of Unilever - Case Study Example

 Information Systems Enhancing Organisational Work: The Case of Unilever Executive Summary With global growth, and even domestic expansion efforts, comes a solid business need for information systems (IS). Best defined, information systems consist of a vast assortment of technologies which aid an industry in conducting business competitively and with a more enhanced decision-making capability. One notable multi-national industry, Unilever, is currently utilizing information systems in an attempt to streamline its business and promote further global growth. Unilever Plc., a United Kingdom-based company, has established remote business facilities in the United States, Europe, Asia and South America. As a company worthy of benchmarking, its current usage of information systems has led to an increasing global presence and enhanced total profitability. This report will highlight the Many Benefits Of Information Systems In Contemporary Businesses In A Persuasive Effort For Modern Organisations to consider implementing IS for the sake of enhancing the total management of business operations, increase competent managerial decision-making, and leading the way to positive organisational change. Introduction Unilever, Plc. is a leading retail organisation specialising in the foods service industry. Unilever manufactures many well known brands, such as Bird's Eye, and has established itself as a leader in distribution and total business profitability. Along with its many achievements is the company's integration of various information systems which serve to streamline internal staff communications and create a network of interaction between its suppliers and multi-national vendors. With global and domestic growth initiatives in place as an ongoing, strategic operational plan, Unilever is leading the global path forward for its successful adoption of information systems, leading to enhanced business practises; both internal and external. Multi-national industries, such as Unilever, rely on IS to support decision-making and integrate continuous organisational change, as global businesses require routine changes to the business in order to remain profitable and competitive. Using Unilever as an important business example, this firm's success stories with information systems, and its supporting technologies, provides a template for any organisation wishing to utilise information systems to streamline its company practises. Procedure/Analysis The goal of today's multi-national industries is to create autonomous regional facilities. In the pursuit of coercing today's businesses to incorporate effective information systems, it became important to highlight one notable success story: Unilever. Unilever's utilisation of information systems has created a "tremendously flexible, resilient, and multi-cultural company" (Management Today, 2006: 51). Most noticeable is Unilever's recent implementation of global organisational change involving a redesign of its existing supply chain and order processes information systems. In Latin America, Unilever recognised a need to integrate its ERP systems (for finance), its supply chain and order-to-cash processes; choosing Sinfonia to replace these systems (Gates, 2004). Though enhancing its raw materials ordering systems and internal financial accounting software packages might appear to be simply a technological innovation, the effects of associated information systems are enhancing the method by which Unilever incorporates organisational change. As Unilever experiences a radical redesign of its supply chain technologies, so comes an information systems support system designed to allow managers and subordinate staff members to communicate using real-time data in order to enhance decision-making regarding supply issues. For instance, as part of its IS redesign, the firm has adopted a Lotus Notes system, which is a software package designed to offer immediate e-mail communications to individuals in management, currently dispersed across the globe. Senior-level management in South America, as one example, utilise Lotus Notes and integrated communications systems to discuss supply chain necessities to their senior counterparts in Europe. Such systems allow for immediate exchange of report data, statistics, operating expenses or any other issue involving global distribution. From a logical standpoint, incorporated systems such as Lotus Notes virtually eliminate the need for formal meetings, costing Unilever an extensive amount of money for travel-related expenses. As a truly global innovation for Unilever, this Lotus Notes software creates a PC-networked information system offering the capability to conduct regular meetings with minimal cost (Edwards, 1997). More crucial to supporting the adoption of information systems is how various technologies have allowed Unilever to initiate domestic (UK) organisational change, specifically in its financial reporting methods and data storage policies. Unilever's Bird's Eye division, a frozen foods facility, has faced a continuous increase in the volume of financially-related data needing to be housed and, eventually, archived for later use (Credit Management, 1995). Further, with global pressures being exerted on multi-national industries regarding the distribution of complete and accurate financial information, creating a new system by which to communicate and store financial reports became a necessity. As part of its financial reporting organisational changes, the company adopted a policy whereby each senior corporate executive leader must formally approve and sign off on financial reporting documents (Unilever.com, 2006). Information systems allow financial data to be accessible via an intranet and global e-mail system, making it possible for senior managers to view real-time profit and loss data and communicate the acceptability of the information in rapid succession. Where, traditionally, many firms were plagued by poor communication between senior management due to overseas locations or even time zone differences, Unilever's change initiatives such as senior-level financial reporting approvals can be accomplished routinely, causing minimal interruption to the business. This is a competent example of the effectiveness of information systems not only from a decision-making standpoint, but also as an effective tool to implement new policies and ensure that the entire multi-national leadership team is aware of change initiatives. In similar respect, information systems are vital to enhancing the total management of global business operations. Unilever recently discovered a need for a more streamlined brand and sales strategy as part of its "Path to Growth" plan (Kalido.com, 2001). To support its strategy, Unilever adopted Kalido, a key enabling technology for an integrated information systems package, and an attempt to integrate and manage information across a wide variety of generally dissimilar communication systems (Kalido.com). Said Chris Broe, head of information, applications and architecture group at Unilever, "In order to run a global business more effectively, you need a global approach to the information systems supporting the organisation" (Kalido.com). In essence, Unilever used Kalido applications to pull together domestic communications systems as well as global information technologies, to create a more streamlined method to measure total business performance. Using these applications, Unilever is now able to view sales and brand-related information at a glance and communicate initiatives for changing the businesses rapidly. In summary, combined, multi-national information systems serves to create a business environment much more able to respond to operational issues quickly and with an acknowledgement from overseas managerial staff using communication technology. In similar respect, the key to successful information systems within a business is simplification: Concentrating on multi-national brands gives a firm an opportunity to focus the firm's resources where revenues can be utilised most effectively. Central to Unilever's plans is the revised knowledge and information systems to "support its leading brands and re-designed supply chain"; an investment of £1.3 billion (Unilever.com). Information systems provide a firm with a simplified system of business monitoring and allow domestic senior managers to become active participants in the operational strategies of international divisions. Information systems at Unilever allow these domestic executives to scan various networked databases in search of foreign sales summaries (as one example) and immediately relay performance-related information to its domestic sales and marketing groups. Knowing the strengths and weaknesses of its foreign sales strategies allows domestic, senior leadership the opportunity to act proactively; that is recognise trends in overseas sales and alter business policies to better respond to international customers. Without a broad network of information systems applications, such communication can be time-consuming and remove value from the activities and output of leadership. Another interesting aspect regarding Unilever's usage of information systems is in its ability to create more enhanced industry segments and develop responsive learning organisations equipped to handle a highly competitive business (Boyle & Ottensmeyer, 2005). From an operational perspective, it is imperative that contemporary leadership is equipped with the skills necessary to assume the role of strategic leader; ready to handle the creation of policies involving operations. Information systems, when used as a training tool, provide the business with a forum by which to communicate learning (such as software training, leadership and meeting-hosting training, and can offer an effective forum in which to communicate to subordinate staff members. According to Nickels et al (2005), information systems are rapidly breaking down corporate barriers, which allows functional departments to "share critical information instantly". Understanding the activities of subordinate staff and managers, historically, involved a succession of formal meetings where individuals were offered the opportunity to present their business-related findings or information. Today, information systems allow managers to receive virtual training and receive real-time e-mail or intranet-issued reports, virtually eliminating the need for formal communications sessions. In essence, IS provides a business with a more aligned business staff which is aware of the activities of various departments, preventing duplication of work. Findings/Analysis Management information systems are in a constant stage of reinvention and improvement (Longenecker et al, 2006). This acknowledgement tends to illustrate that as businesses become more complex entities, in terms of globalisation and domestic growth initiatives, the need for innovative methods to communicate business-related information becomes paramount. In the case of Unilever, the research has indicated that the firm is continuously altering its strategic business plans and is always searching for methods to enhance the business' performance. Unilever considers its changes to information systems as CPFaR, an acronym for Collaborative Planning, Forecasting, and Replenishment (Boone & Kurtz, 2006). Under CPFaR, Unilever has experienced tremendous growth and higher profitability simply through the opportunities granted by IS to enhance operations and management decision-making. From a strictly operational standpoint, Unilever's production facilities further require the use of process control systems: Operational information systems which monitor and run various production machinery in manufacturing environments (Gomez-Mejia et al, 2005). It would appear that Unilever's greatest strength in terms of operational performance is its network of applications which offer instantaneous information regarding the activities of its various, internal departments. In terms of process control systems, managers who are overseas awaiting distribution of domestic-produced products can witness, at a glance, the production capacity and current output of its Unilever supplier. Knowing where the overseas business stands in terms of its current workload can provide managers with the opportunity to create contingency plans in the event that the overseas division will experience interruption to supply. The most significant finding is Unilever's firm recognition that information systems are the key to their long-term business success. This is clear in the firm's utilisation of skills and management training, organisational change initiatives and a firm commitment to communication using information systems and associated technologies. Conclusion and Recommendation This report was designed to offer a genuine business success story in terms of the contemporary usage of information systems and to provide a template by which today's businesses can find benefit using IS as a support for business activities. Research could locate absolutely no negative consequences of information systems at Unilever, suggesting that the majority of its growth and profitability can be attributed to the streamlined activities of management based on the receipt of adequate, real-time communications. This should be the goal of any modern company hoping to succeed in a highly competitive business environment. It is the firm recommendation of this commercial consultant that any firm should actively consider investing in IS, both from an operational and business decision-making standpoint as well as implementing organisational change. Researching Unilever's current position in the foods industry has uncovered a significant finding: Strategy, decision-making and organisational change go hand-in-hand, meaning there is a cyclical nature to how businesses formulate plans of action. For instance, strategy is formulated by the receipt of quality information, which creates an opportunity to initiate a change to the way the company conducts business. In turn, a decision is carried out, allowing for new information to be provided in the pursuit of creating new strategy. This cycle is illustrated in Appendix A. With the growing need for communication and the receipt of business information, no company can do without quality information systems. Though it may be a rather costly short-term investment from a financial perspective, the long-term gains will be the creation of competent senior leaders and a business ready to thrive in the 21st Century. References: Boone, Louis R. & Kurtz, David L. (2006). Contemporary Marketing. 12th ed. Thomson South Western. United Kingdom: 337. Boyle, Mary-Ellen & Ottensmeyer, Edward. (2005). 'Solving business problems through the creative power of the arts: Catalyzing change at Unilever'. The Journal of Business Strategy. Vol. 26, Iss. 5: 14. Credit Management. (1995). 'Storing Financial Data'. Stamford: 34. Edwards, Nick. (1997). 'An Agent for Change'. Supply Management. London. Vol. 2, Iss. 3: 32-33. Gates, Lana. (2004). 'Unilever Tangos to Sinfonia in Latin America'. Application Development. http://www.adtmag.com/article.aspx?id=10180. Gomez-Mejia, L., Balkin, D. & Cardy, R. (2005). Management: People, Performance, Change. 2nd ed. McGraw Hill Irwin. London: 747. Kalido.com. (2001). 'Unilever Selects Global License from Kalido'. http://www.kalido.com/newsandevents/news.asp?newsID=43. Longenecker, J., Moore, C., Petty, J. & Palich, L. (2006). Small Business Management: An Entrepreneurial Approach. 13th ed. Thomson South Western. United Kingdom: 450. Management Today. (2006). 'Unilever and Britain's Most Admired Companies'. London: 51. Nickels, W., McHugh, J. & McHugh S. (2005). Understanding Business. 7th ed. McGraw Hill Irwin. London: 522. Unilever. (2006). 'Our Approach to Reporting: Unilever United States'. http://www.unilever.com/ourvalues/environmentandsociety/env_social_report/ managing_cr/reporting.asp. References: Unilever. (2000). 'Unilever today detailed its plans to accelerate top line growth and step up the rate of margin improvement. http://www.unilever.com/ourcompany/newsandmedia/pressreleases/2000/growth. asp. Appendix A: Cyclical Relationship Between Information, Strategy, Decision-Making, and Organisational Change Read More