IT Leveraging Business Advantage for Managerial Level - Essay Example

Name Tutor Course Date IT Leveraging Business Advantage for Managerial Level Introduction Competition in the global market has become competitive and calls for measures of attaining a competitive advantage. Innovation was stated by PWC as a key driver for attainment of competitive advantage. Innovation through technology should be done rapidly and done cost effectively. In a survey conducted by PWC in 2011, it was stated that most CEOs who expected to experience growth in their companies banked on technology so as to improve their efficiencies and differentiation. In fact, IT was stated to be a key drive to attaining higher efficiencies and creation of a competitive advantage. The business world is becoming more computerized and one of the best ways of developing a competitive advantage is through thoughtful development of Information Technology (Xantrion, 2014). IT has been used by managers to reduce costs and improve efficiency of operation. In addition, investment in growth activities that leverage upcoming technologies is one of the ways to attain competitive advantage. Various IT systems are used for enhancing competitive advantage. Such systems include the expert system that has so much information on the operation of a business. However, the systems do not replace the existence of managers. Rather, they aid in better decisions making by the managers. Expert systems were developed to increase the abilities of humans in exploiting available knowledge. This knowledge has been in limited supply and use of the systems helps in better use of the knowledge. Expert systems were developed based on the concept of artificial intelligence, where computer systems are designed and constructed to perform at the level of human intelligence and behaviour. The link of expert systems in enhancing business advantage is obtained from enhancement of business intelligence. This is because it is a framework that helps the organization in managing developing and communicating intangible assets of the company. Expert systems provide an information system that is based on knowledge and is expected to have attributes similar to that of humans so as to replicate the capacity of humans in making ethical decisions (Singh, 2012). According to Singh (2012), expert systems make better sense of the variability of businesses in terms of sales data relationships, consumer purchasing habits and any unknown patterns. Through this, they are able to help in making better decisions. This is the reason they are used in solving complex problems and in techniques of supporting the decisions. These systems have a business applicability that is spread across various business functions. These include finance, management, production and forecasting, among others. The global business market has become so dynamic, making the decision making process is a complex endeavour for business managers. In addition, there is inherent latency in various processes. Expert systems help in reducing latency in decisions making in business and enhance opportunities for revenue generation (Luconi et al, 1996). The key drivers for competitive advantage in the business world include the ability to perform data analysis across several business functions and variables, ability to detect fraud and management of customer relations. These attributes are better carried out by enterprises that utilize applications that are enhanced by artificial intelligence. The strength of these systems lies in their ability to take in so much information, analyse the information, manipulate and even make predictions based on existing and forthcoming trends. This is the reason they are great partners to business managers. While these applications cannot replace the existence of a manager, they are great systems from which the managers can learn. Some of the lessons that managers can obtain form these systems include ability to handle multiple data, to analyze the data, to predict trends and eventual outcomes, among other functions. The manager need not operate exactly like the system. If anything, the manager should operate better than the system because they can make decisions while the system cannot. The most important lesson for managers to obtain from the system is the ability to analyze data and to find relations and interrelations between information from various sectors. This is useful information for decision making by the manager. Expert systems also act as partners to managers when it comes to decisions making. The system acts as a human counterpart and when consulted about a problem, the system queries the manager so as to get clarification on the exact nature of the problem. Relevant fragments of knowledge are stored in the repository of the system and are used for reasoning. In fact, the system has the capability of providing reasons for certain recommendations based on the analyzed situation. How expert systems create a competitive advantage In order to achieve, improve ad maintain a competitive advantage; organizations depend on the power of reasoning by their employees. This requires expertise within the organization. Use of business expert systems provides an opportunity to enhance the competitive that an organization can obtain from its superior knowledge and ability to reason. Expert systems provide a uniqueness that is only known to the company, hence giving the company an edge over its competitors. Expert systems are different from information systems because they cannot be reproduced readily one has access to details of the expertise that has been stored. While the system can be used easily and openly, details of its reasoning knowledge cannot be disclosed and this makes the company to sustain its competitive advantage. In addition, expert systems can be used in implementing a competitive strategy. Competitive strategies are categorises into three. These include producing goods at a lower price than competitors, brand differentiation and focusing on a unique market niche with a product having less direct competition from its outstanding cost and features. With these three strategies, an expert system contributes to the competitiveness of the organization by enhancing its internal productivity, providing services that are enhanced and by providing new services to clients. This implies that an expert system can be depended upon by the company to spawn a completely new industry (Holsapple and Whinston, 2000). Systems used Various systems exist as expert systems. While there are slight differences between these systems, the concept of operation relate to expert systems. Management information system is one such system. This is a system that is used in supporting the decision making function of an organization. Every organization needs decision making ability for it to achieve its objectives. In addition, every organization spends most of its time on collecting of data, processing the data and documenting the data to the relevant stakeholders. It is the strength of the organization to handle its information that can be used to create a competitive advantage for the company. The role of MIS is to ensure collection of appropriate data from various sources, processing of the data and sending the data to the needed destinations. The system fulfils information needs of individuals, groups and functions of management such as managers and top management. Any data that is required for transacting processes, planning, scheduling, controlling, strategic planning and goal setting can be done by MIS, hence helping in managing, administering and in operations within the organization (Golabchi, 2008). Decision support systems are systems that aid in judgment and making choices. These are systems that can formalize the knowledge in a domain and make it open to mechanized reasoning. These systems are valuable in situations where the amount of information that is available prohibits the intuition of humans in making the decision and in situations where optimality and precision are important. These systems integrate various information sources and provide intelligent access to knowledge that is relevant to what is required by the company. The systems also support in making choices whenever there is a variety of options. The importance of these systems is realized in its ability to integrate information from various sources and use this information in making decisions relevant to the situation and useful for the organization. As an expert system, the DSS exploits the abilities of available knowledge so as to develop the best decision possible for the company. Such information that can be used by a DSS application includes gathering information through access of current information on assets, data warehouses, data marts and presenting the information through comparative figures of sales between weeks, projecting figures of revenue and providing the consequences of decision alternatives that are different to the proposed decision. The decision making process of these systems follows the four stage pattern of intelligence of information, design of the best course of action, choice of the best alternative and implementation of the selected decision (Xantrion, 2014). Expert systems also support senior managers in making decisions through a different system known as the Executive Support Systems (Luconi et al, 1996). These systems address decisions that are unstructured and create a general environment of computing and communication instead of providing a specific capability or a fixed application. These systems are only tailored to the senior managers and they are easily used to drill down any capabilities and support the need for external data. In addition, the systems are oriented towards the future. These systems are designed so as to incorporate data on external events like new laws on tax, or competitors and in addition to this; they also generate summarized information from internal management information systems and decision support systems. The ESS filters, compresses and follows critical sales data while laying emphasis on reducing the time and effort used in getting information that is useful to the top executives. The system also uses advanced software for graphics and can prepare graphs and data from various sources instantly to the managers. In order to collect data, integrate it and analyze, business intelligence systems are used. These are a set of tools, programme products and technologies that are integrated. BI systems aid in optimization of business processes, resources, maximization of profits and improve proactive decisions making. These systems are utilized as they create various applications in finance, accounting, monitoring competition, marketing and production. The systems aid in making effective decisions by utilizing different sources of information and integrating the information required. The systems can be used in business forecasting, ordering and replenishment, marketing, merchandising, logistics and distribution, management of transport and inventory planning. One great challenge that is faced during management of information is the bulk of information that has to be dealt with. Development of these systems aids in handling bulk information by automation of the process of information retrieval, analysis and presentation. This aids the managers in the process of decision making (Holsapple and Whinston, 2000). Selection of these systems by managers depends on the needs of the organization. For organizations that seek to create a competitive advantage through high effectiveness in operation, various systems are used; including the systems stated. Practical systems that are used by organizations include systems such as the enterprise resource planning systems. Specific systems that are in use by organizations include the Pfizer distribution system that is used in supporting decisions on the US network for distributing finished goods, the American Airlines Yield management for maximizing revenue from every flight through overbooking and the integrated choice account structure that is used by Merrill Lynch (Xantrion, 2014). This is used in designing appropriate structures for accounts and pricing for the company. These are systems that aid in interaction of various departments within the organization from one interface. Managers select the expert systems for use because of the ability to integrate a wide range of information with ease. In addition, the systems also provide an easy human counterpart to whom the manager can run to and consult. All of these systems are automated and provide the information required by the manager with ease (Golabchi, 2008). Conclusion Expert systems were designed to aid the manager and employees in working better. This is done through the ability to make sound decisions based on facts from a wide range of information. The systems gather information across the organization as well as across the competitors of the organization and help analyse and make decisions. This is the basis by which the systems enhance business advantage. To achieve this, the organization has to use the systems in addressing technical, managerial and economic challenges faced by the company. Works Cited Golabchi, M. 2008, “A Knowledge-Based Expert System for Selection of Appropriate Structural Systems for Large Spans,” Asian Journal of Civil Engineering (Building and Housing) Vol. 9, No. 2, pp. 179-191. Holsapple, C. And Whinston, A. 2000, Busines Expert Systems: Gaining A Competitive Edge, USA: Texas University. Luconi, F., Malone, T. & Morton, M., 1996, Expert Systems and Expert Support Systems: The Next Challenge for Management, Massachusetts, Centre for Information Systems Research. PWC, 2012, How to Drive Innovation and Business Growth Leveraging Emerging Technology for Sustainable Growth, PwC Advisory Oracle practice 2012. Singh, Jagvinder, 2012, “Role of Artificial Intelligence & Expert System in: Business Competitiveness,” Gian Jyoti E-Journal, Volume 1, Issue 2, pp. 1-9. http://stratum.it/news/11/78/Leveraging-Technology-to-Increase-Your-Competitive- Advantage. Xantrion, 2014, How to Leverage Information Technology to Develop a Competitive Advantage, Available on 2014-06-11 at: http://xantrion.com/index.php?option=com_content&view=article&id=245&Itemid=7 6. Read More