Honam Petrochemical Business Strategy and Business Model - Case Study Example

Business Report Prepared by Table of Contents Executive Summary HPC business model and strategy is behind its continuous success and expansion, and this has been attributed by key management principles namely; strengthened core competencies, on site management, developed talent, and improved the value of brand. The new system was designed to overcome a number of problems such as manipulation of data reports, out-dated data, and to improve the process of decision making. There are numerous steps taken in Systems Development Lifecycle and they include, planning, analysis, design, construction, test, and finally rollout. In Systems development lifecycle stages it is imperative to involve end users so as to understand what they want and what they anticipate from the system. Change management is important while developing an Information System solution, because it enables the organization to overcome any possible resistance from users. The new HCL system was without a doubt beneficial since it improved decision making process, allowed for easy access to up-to-date data, and allowed executives access data reports through their desktops and mobile devices. Introduction Honam Petrochemical produces a range of petrochemical products from its plants in South Korea with its main product being ethylene. At the moment, HPC is amongst the top manufacturers of polyolefin such as polypropylene and high density polyethylene in addition to other downstream chemicals (Laudon et al., 2014). HPC as well runs a naphtha cracker that delivers resources for its other produces.  HPC according to Hoover’s Inc website was instituted in 1976 and has formed partnership with a number of companies to expand its business (Hoover’s Inc, 2014). In order to achieve needed results from the organisation’s information system (IS), Cummings and Worley (2009, p.431) posit that all organisational capacities must be exploited. Information systems achieve their significance through processing the data from inputs within the company so as to produce useful information for company’s operation management. In order to increase the effectiveness of the company’s information system, Markgraf (2011) suggests that the organisation can either add additional data so as to improve the accuracy of the information or utilise the information in novel ways. As evidenced in HPC case study, the company’s information system may help the management make better decisions through delivery of all required information and through decisions’ results modelling. Basically, a decision entails selecting a strategy from a number of options and performing the conforming tasks. When the organisation’s information up-to-date, it can make decision with certainty, and in case more choices are pleasing, through information system one can run distinct scenarios to find the best. HPC Business Strategy and Business Model HPC has set sights on developing into a top level chemical company all through Asia and this commitment is reinforced by four key principles of management, which has been driving HPC forward: strengthening core competencies, on site management, developing talent, and improving the value of the brand. In this case, HPC seeks to improve its business competitiveness through recognizing the key needs of the industry and acting in response to those needs with value-added services as well as products. The company also seeks to pay attention to, and act upon, the opinions and needs of workers, customers, as well as business partners so as to develop a business strategy that is sustainable and relevant. HPC also seeks to recruit talented persons who are talent-driven, and offer them the needed support so as to maximize their ability (Hoover’s Inc, 2014). Moreover HPC endeavours to earn customer trust and satisfaction by providing products that are consistently of high quality. So as to deliver the abovementioned management principles, the company uses its shared core values of customer focus, partnership, responsibility, originality, and passion. These basically help the company to build good relationships with its customers so as to well comprehend their wants and achieve their trust. These as well help the company to distinguish itself in the market by providing innovative services and products. The shared core values also help HPC management to create a culture wherein employees feel accountable for and skilled to, adding real value. Through these core values the company has successfully pursued established beneficial partnerships with business partners as well as business partners. In a number of industries, as mentioned by Watson (2005, p.2), new-fangled business models are substituting well-known companies as well as traditional ways of conducting business, as evidenced in airline and music industry. Therefore, Watson (2005, p.4) posits that business models interest arises from two conflicting sides: Well-known companies need to look for innovative and new business models so as to remain competitive against the increasing competition as well as to keep away revolutionaries; and, entrepreneurs desire to look for innovative and new business models to build their space within the market. At HPC, the concept of business model is essentially useful element of strategic analysis used to carve out space in the market and also to remain competitive. It as well helps the company to boost their ability to manage ongoing change as well as continually adjust to the fast changing business settings by introducing novel ideas. Problems intended to be solved by the New System In order to handle its far flung processes, HPC as mentioned by Laudon et al. (2014) required reports that were reliable and could correctly measure the performance of the management as well as offer helpful, correct information for boosting the company’s sales in addition to cutting the costs of operation. The available systems offered the company’s managers with reports so as to monitor their business-related decisions, but often the reports’ data were sanitised and obsolete. Considering that some managers were manipulating and processing the data in order to show to top management that their departments were hard working. Besides that, the data of the reports as indicated by Laudon et al. (2014) were to some extent stale and was accessible just periodically. HPC top managers needed to access the data afore the processing and manipulation by department managers, and also they did not want every department to interpret its own reports. Rather, the top managers desired to see up-to-date data so as to get the actual insight of the activities in the facilities. Without a doubt, developing a business intelligence solution to satisfy the needs of HPC executives was not easy considering that they wanted to have access to up-to-the-minute reports’ data; which could be accessed quickly through their desktops. Besides that, the executives also desired for an enterprise-wide data that could be accessible and easily shared across diverse business functions as well as departments so as to support the geographic expansion of the company. As stated by Bajgoric (2009, p.110), effective information and data management should be a concern for all business organisations considering that the digital information amount across the globe is increasing twenty times after every one decade. So, organisation will experience challenges to manage this data and still secure it. The consequences of poorly managing data may be substantial since it may result in financial losses. For instance, when the organisation's database is unpredictably flooded with data, and the backup system is obsolete such as that of HPC, the company may as a result lose lots of data, worth a lot of money to the organisation. Systems Development Lifecycle The systems development life cycle (SDLC) according to Mishra and Dubey (2013, p.64)is a paradigm utilized for managing project, which defines the numerous stages involved in a project of an information system development. The first step is planning, and during this phase, the project’s objectives are defined and the needs to for product production are measured. Furthermore, an evaluation of resources, like costs and personnel, is made ready, together with an idea of new product. Subsequently, information is evaluated to find out if there exists an optional solution in producing the new product. If there are no suitable options, then the information is brought together to form a project plan, which as indicated by Mishra and Dubey (2013, p.64) is presented to the management for endorsement. The second step is analysis, and during this phase the end-user requirements are determined by the project team. Mostly, this is carried out with the help of customer focus groups that offer an account of their requirements as well as their anticipation from the finished product. The third step is design, which as mentioned by Mishra and Dubey (2013) is the architectural stage of designing the system. In this phase, the data processing flow is designed into charts, and the most rational structure and design for flow as well as storage of data is determined. The fourth step is construction, and in this phase plans outlined in the design phase are executed by the developers. In this case, the database is designed, and the developers create the cryptograph (code) for the process of data flow and later the user actual interface screens are designed. According to Mishra and Dubey (2013, p.66), to refine the code, test data is processed and prepared numerous times. The fifth step is testing, and during this phase every feature of the system is tested for performance as well as functionality. Furthermore, the system is tested to find out if tit can integrate with other products. Fundamentally, the main component of the testing stage is to authenticate that the system meets the end user needs as laid out in the analysis stage, that every function of the system are perfectly processing data, the system integrates with other precious systems, and this new system meets the company and customer’s standards of quality. Rollout is the final step, and is when the new system is delivered to the customer as a full-scale or update conversion. As soon as the rollout initiates, the customers start to offer feedback, and for any corruption of data or performance issue the code is tweaked. Basically, it is imperative to involve end users in the stages of systems development lifecycle, especially during project development because they perform the most important task of determining the new system’s requirements. As mentioned by Erkan (2012, p.130), determining the new system’s requirements needs a comprehensive knowhow of the business processes and practices. User participation is imperative given that they are the content experts, and so the role of analysts should be to guide the end-users through the methods utilized in the project development process. End users played a crucial role in the development of HPC’s new system, considering that the project team created a Web-based user interface so as to make the new system accessible to everyone including the end users who in turn, could offer their views. Furthermore, the new system’s interface was well-designed and extremely modest such that users need little or no training on how to access reports or data (Laudon et al., 2014). Users were involved through members of the information systems department who were dispatched to encourage users to begin using the system. So the team visited almost all manufacturing plants, particularly where the new system was rolled out and discussed in details with the managers with regard to benefits brought about by the new system in addition to how to use it. Furthermore, the information systems department carried on with its campaigns even after the new system started functioning so as to make certain that managers were making use of the system and utilizing it effectively. Change Management Mostly, while putting enterprise-wide information system into practice, most project tem ignore the human factor. As mentioned by Hornstein (2008), change management when developing an IS solution can lead to an improved job satisfaction and productivity. So as to respond to change, scores of organisations these days have heavily invested in capital-intensive overheads like new technological system (like ERP packages) with the anticipation that it will consequently, increase productivity and reduce cost. These anticipations have been increasing lately because most companies have faith in the slick presentations offered by sales representatives as well as consultants who promise improved outcome over-night. On the other hand, most companies have stick to a century-old belief, that has largely been discredited, which says that through technology-based innovation single-handedly prosperity and survival will be guaranteed (Hornstein, 2008). Regrettably, the dominant belief is that the gleaming novel system is more suggestive and liked by customers in search of a system that will solve all their survivability and profitability issues. Based on HPC case study, it has been evidenced that immediately the HPC’s project team came up with the business intelligence tools for the desired solution, they turned their concentration to determining the reports and data that were needed by the new system’s high level users within the company. So, the team tasked with information systems begun requesting the executives to list down the reports that they were currently receiving as well as to evaluate each report usefulness. The intent was to cut the list to a more convenient size, and besides, the department executives were requested to add any extra data or reports which could benefit their organisational groups. Without a doubt, such findings were exceedingly helpful not just in establishing the appropriate set of dashboards and reports for HPC executives, but as well to avert a possible resistance to change (Laudon et al., 2014). The IS team utilized a phased approach in executing the novel system, and the company opted to wait until for the company to get experienced with new system instead of pushing it to the executives at its early lifecycle. This as a result, gave them adequate time to be certain about the quality of data as well as its methods of data collection as well as processing. Benefits of New System As evidenced in HPC case study, information systems are beneficial to the business world considering that they allowing companies to operate more resourcefully as well as increase productivity (Samii, 2004, p.41). Improved communication, date storage and records; protection are among the benefits brought about by information systems. The HPC new system facilitated the company’s executives to view key information about performance, especially with regard to plant production cost, the costs of transportation, day-to-day inventory as well as production rates, and global price trends of the products. Besides that, the new system made it possible for information to be visually displayed in management cockpits as well as dashboards. The system made it possible to access data reports through mobile devices anytime and anywhere. Furthermore, information delivery is tailored and distinguished for all levels of management as well as front line personnel. Even though, Laudon et al. (2014) posit that the system’s lasting business impact cannot be determined since the system is t its early cycle, one thing is certain, HPC executives are no more limited to obsolete and sanitised data. Thanks to the new system, management decisions as well as discussions are founded on reliable, timely, as well as accurate enterprise-wide data. Decision making has become faster at HPC, since the new system has reduced the time needed for gathering, processing as well as tracking the data. Conclusion In conclusion, as evidenced in HPC case study, information systems play a crucial role in modern business world and have made an enormous change with regard to the manner the company operates. Thanks to the new system at HPC, executives can now make decisions fast, can access up-to-date data, and costs of operation have been reduced. The new system has not just speed processes up and improved flexibility at HPC, but it has as well changed how HPC conducts its business functions. Because of the new system, HPC’s business practices sustainability has improve and executives can now make decisions based on the present circumstances. Recommendations HPC must focus all technical and functional expertise needed for designing, construction, and deployment of the business intelligence applications and information system infrastructure into one consistent organisational unit so as to improve performance and functionality of the business. Furthermore, HPC should make use of architecture, which is resistant for various models of business governance in the designing of enterprise data warehouse (EDW). HPC needs more engagement-oriented, systemic, as well as process-focused approach to change management, particularly when developing an IS solution, so as to facilitate collaboration between management and employees in the implementation of business process and information system changes. In order to achieve this collaboration, numerous interdependent approaches must be embarked on: participative leadership, empowerment, systems thinking, and the eight-step change process (see appendix 2). Individual Content While working for this assessment as a member of the team numerous strengths and weaknesses surfaced. My strengths included strategic thinking, focused, inspiring, open-minded, visionary, and confident. The strengths were attributed by my broad input in this assessment. I improved the potential for constancy in decision-making, and this helped me fine tune the flow of work for efficiency. Besides that I was innovative and always helped our team to hastily come up with creative ideas for every problem. Notably every member of the team had a different set of skills that enabled us to work on various problems together resulting in a high efficiency. Some of the notable weakness included; being ignorant, lacked patience, was impulsive, and lethargic. While in team conflict arose most of the time, and thanks to my weakness I always came up with different perspectives that resulted in conflict. Furthermore, different personality often resulted in disagreements, but importantly we never allowed our differences to get out of hand. Although every through and idea was shared, from time to time it became hard to decide on which idea to follow. The team work experience in the current team was outstanding as compared to other previous experiences. This is for the reason that through the current team I learned to organise and plan, to compromise and negotiate, I gained new skills in decision making, I learned from others, and also gained knowledge on how to solve problems within a group. In our team, conflicts were brought about by competing objectives, whereby every member of the team wanted other team member to pursue his goal rather than a collective goal. Conflicts were also caused by misunderstandings of assessment criteria and requirements, with every team member having his version of the same. Other causes of conflict included; overreliance on a specific team member, lack of feedback, conflict of interest among team members, and disagreement concerning way of achieving the team goals. Poor planning and lack of focus also contributed to the conflict. I have realized that conflict within the team is challenging for team member, but it is beneficial to some extent. Because, conflict can result in new approaches and ideas, which as a result facilitate the materialization of vital issues between members of the team if well managed. To overcome these conflicts we brainstormed for solutions, created a plan and implemented it, selected the idea that majority preferred, and offered everyone chance to give their suggestions. Team dynamics are multifaceted and complex considering that they are an alliance of various factors (roles, personalities, culture, and so forth).  In order to improve team dynamics, diagnosis must be carried out first, so as to identify the appropriate intervention. In my position, to improve team dynamics I would establish my personal belief in the team work, distribute the responsibility and power in the team, acknowledge and support every contribution made by a team member, and ensure equality. 3028 words References Bajgoric, N., 2009. Always-On Enterprise Information Systems for Business Continuance: Technologies for Reliable and Scalable Operations: Technologies for Reliable and Scalable Operations. Hershey, Pennsylvania : IGI Global. Cummings, T.G. & Worley, C.G., 2009. Organisation Development and Change. New York: Cengage Learning. Erkan, E., 2012. Proceedings of the 3rd International Conference on Information Management and Evauation. Oxford: Academic Conferences Limited. Hoover’s Inc, 2014. Lotte Chemical Corporation Company Profile. [Online] Available at: HYPERLINK "http://www.hoovers.com/company-information/cs/company-profile.Lotte_Chemical_Corporation.033477abb265966c.html" http://www.hoovers.com/company-information/cs/company-profile.Lotte_Chemical_Corporation.033477abb265966c.html [Accessed 17 January 2015]. Hornstein, H., 2008. Using A Change Management Approach To Implement It Programs. [Online] Available at: HYPERLINK "http://iveybusinessjournal.com/topics/strategy/using-a-change-management-approach-to-implement-it-programs" \l ".VLmgXEBRW1s" http://iveybusinessjournal.com/topics/strategy/using-a-change-management-approach-to-implement-it-programs#.VLmgXEBRW1s [Accessed 17 January 2015]. Laudon, K.C., Laudon, J.P. & Brabston, M.E., 2014. Honam Petrochemical’s Quest for Better Management Reports. In Laudon, K.C., Laudon, J.P. & Brabston, M.E. Management information systems: Managing the digital firm. 13th ed. Upper Saddle River, New Jerse: Pearson Education Ltd. Markgraf, B., 2011. Importance of Information Systems in an Organisation. [Online] Available at: http://smallbusiness.chron.com/importance-information-systems-organisation-69529.html [Accessed 17 January 2015]. Mishra, A. & Dubey, D., 2013. A Comparative Study of Different Software Development Life Cycle Models in Different Scenarios. International Journal of Advance Research in Computer Science and Management Studies, vol. 1, no. 5, pp.64-69. Samii, M., 2004. International Business and Information Technology: Interaction and Transformation in the Global Economy. New Jersey: Psychology Press. Watson, D., 2005. Business Models: Investing in Companies and Sectors with Strong Competitive Advantage. Petersfield, Hampshire: Harriman House Limited. Appendices Appendix 1 Appendix 2 Figure 1: The Eight-Step Change Process Read More