As stated earlier IM has been a significant tool in trading and commerce since the beginning of time. However what sets an organization apart is its ability to hangs data into information as efficiently and cost effectively as possible. Before we tackle this issue, defining data and information is important for the sake of understanding the context they will be used. Data is defined by O’Brien (2003) as raw material resources that are processed into finished information products. Information is data that has been converted into meaningful and useful context for specific end users (O’Brien, 2003).
Hence, it is safe to say that data becomes information when value is added to it either through organizing, analysis and evaluation and placed in the correct context or the end user. If this statement is true then we can deduce that the better the organization is at completing the above process, then the more effective it is, and if it can streamline this process enough to provide the end user with a service or product that they are willing to pay for, it will have increased its competitiveness (Gabon, 2008).
For instance, a car manufacturer that assembles luxury cars wants to increase the effectiveness of their organizational system. They would start by looking at each component of the organization highlighting areas in which they can improve on quality, control and cost. In manufacturing they might want to introduce an Operating Support System (ASS) which is specific about the requirements at the plant to complete assembly of a car. The data inputted into the system requires that the inputted be specific about supplies, number of hours worked, number of people required to work on a particular car or day etc.
The system will process and store the data for the next user, in a form that they will understand. Here the organization may look at the improvement of its networking system as access of the information is made easier and faster with the use of the intranet (O’Brien, 2003). Other elements that will add value to this process, thereby giving context to the next user is the compilation of relatable data such as energy usage, space required, reputable suppliers, financing and human resources.
These might be inputted by other systems within the organization such as the Supply Chain Management Systems (SCM), with the use of the extranet (O’Brien, 2003). The data is then stored in the relevant database until it is required by the next user. A combination of the data can be transformed into information that is used in marketing of the cars manufactured, or can be used in the ordering and distribution of sources such as parts (doors, seats, trees) and land allocation or money for infrastructure development.
This process of transformation can also be used as a control measure, when targets of the different organizational components are reviewed, or the quality or accuracy of the initial data may require verification and correction. Once the data has been transformed the information/ product can then be disseminated to the end user, in this example the car is sold to the customer. A Customer Relationship Management System (CRAMS) can collect data for feedback purposes or for customization of the car, depending on when the data is used.
In essence a cycle is created and smooth flow of information from one component to the next increases the effectiveness and the competitiveness. These processes and systems aid in reduction in time wastage, an expensive commodity, where traditionally the organization might have had to compile the data physically, taken days to analyses it to find trends and pass it on to the different departments or components. In the process things might be delayed or incorrect, compilation could also involve travel costs in cases of the manufacturer having more than one assembly plant.
The information from appliers would require making multiple phone calls for quotations or back and forts as prices are negotiated. All these are examples of costs that would be transferred to the customer. Quality of the information could be compromised depending on the control of data collection and transformation, leading to substandard parts being used resulting in a hazardous product that might not meet specifications, hence resulting in the product being described as a right-off or loss.
The wrong customer information could lead to the wrong car being delivered to the wrong person, which could lead to customer dissatisfaction and inconveniences. Or storage of the information could lead to losses in customers, suppliers and credibility in the industry. As the organization implements the use of IS for information management it starts to optimize all its processes, thereby meeting Porters analysis of the value chain (Gabon, 2008) where streamlining input, processing and output leads to larger profit margins. Whilst at the same time satisfying Shih’s measure of organizational effectiveness.
In conclusion, if an organization successfully integrates the use of information systems as a means of information management, the benefits are multiple and extensive if done correctly. Obviously, if the organization introduces information systems but does not train staff on how to use it, or does not implement control measures in the input of the data the information gathered will not only be inaccurate but will lead to misinformation leading to lack of optimization, therefore reducing effectiveness and competitiveness(Gigs).
Hence, the organization has to be fully committed to the implementation of the information systems as a means of improving its methods of information management, otherwise it will fall short. Interaction between the different components of the organization (through intranet), as ell as with outside entities, such as suppliers (extranet) and customers/ end users (internet) needs to be as smooth as possible. Of course, there will be instances of downtime, however how these are dealt with also improves the overall effectiveness of the organization and can translate into an increase in competitiveness.
References 1) O’Brien, J. A. (2003) Introduction to Information Systems: Essentials of the E- business Enterprise. 1 lath Edition. International edition: McGraw-Hill Irwin. Boston 2) Gigs, W. (… ) Demand median effectiveness versus organizational efficiency. Http://smelliness’s. Churn. Com/organizatioorganizational Effectiveness Vs.. Organizational Efficiency 3) Gabon, M. (2008) Measuring company level competitiveness in Porter’s Diamond model framework. HTTPS://ideas. Repel. Org/h/peak/suffer/149-1 58. HTML b) Discuss various e-business strategies that can be implemented for competitive advantage. (25) Over the years due to stiffer competition, growing global markets and a rise in more tech savvy consumers, the e- business has had to restructure the way they conduct business. With more and more people having access to the internet, it has become advantageous for e-businesses to conduct business online, hence, the growth in numbers of -businesses. E-business has been described as conducting business via the internet.
It is not limited to just buying and selling but also the servicing of customers and the collaboration with suppliers (O’Brien, 2003). The demand for instant or efficient services, which are also affordable and custom-made, in some instances, has driven e-businesses to implement strategies that counter forces such as competition, customer bargaining supplier bargaining, threat of substitutes and the threat of new entrants (O’Brien, 2003). It is through the implementation of effective strategies to curb or reduce these actors that the e-business can increase its competitive advantage.
This assignment will debate various e-business strategies and will highlight how their implementation leads to competitive advantage. Before we look at the strategies that can be implemented and how, it is important to clarify what a strategy is. Strategy is an integrated and coordinated set of commitments and actions designed to exploit core competencies and gain competitive advantage (Belabored et al, 2011 Therefore e-business strategy would then be strategy as it applies to the e-business model.
Another term that needs unpacking is competitive advantage as this will illuminate to what end the strategy is adopted. When the e-business implements a strategy that competitors are unable to duplicate or find too costly to imitate then it is said to have a competitive advantage (Belabored et al, 201 1). Hence, we can deduce that when online businesses adopt systems that streamline and enhance their operations and knowledge base with the result of creating a seen. ‘ice or product that is unique, in some way, gives that business an advantage.
An effective way of e-business strategy implementation is through the adoption f a more strategic information management, in other words, information systems that allow the provision of a service or product that industry competitors cannot provide. When it comes to implementation of the strategic information management system in e-businesses, there are several points within the value chain where the strategy can be adopted so as to improve the end product/ seen,’ice namely at Customer Relationship Management (CRM), Supply Chain Management (SCM), Enterprise Resource Management (ERM) (O’Brien, 2003).
Therefore, the focus is on the strategic adoption of cost leadership, alliances, innovations and differentiation of the ND product or service (O’Brien, 2003) using information management systems. It is important to note that e-businesses are likely to use a combination of the strategies to gain competitive advantage; however, the examples below will try and place their implementation in isolation, in an attempt to illustrate how they work to increase competitive advantage.
E- businesses are using strategic information systems at different organizational levels to improve the margins in their value chain (O’Brien, 2003) as this enables them to deal with the ever changing markets, keeping them relevant ND competitive. For instance, Symbolizing, a locally based e-business that facilitates the purchase of groceries online and offers delivery to your doorstep, or nearest postal outlet in remote areas, has adopted an alliance strategy that enables the organization to service a niche market.
The cost of delivering the groceries themselves would have been too high and would have resulted in an increase in the cost of service for the customer. However, through the strategic alliance with Compost, Symbolizing is able to offer the service to a wider range of clients as they can promise to deliver to almost nowhere countrywide as long as there is a post office. Through this alliance Zoning is able to continue doing business at a sign efficiently lower price, whilst at the same time offering a unique service to the Diaspora market that competitors are unable to duplicate.
Another strategy an e-business could adopt to improve its strategic information system through innovation is by introducing a support system that plugs into the Customer Relationship Management system already in place. For example, if an e-business that offers security and tracking services for vehicles, also introduces a call centre agility, which the customer can access through the navigation system in the vehicle to ask for clearer navigation instructions or other services such as remote unlocking of the vehicle in the event that the owner has locked the keys in the car.
This would give the business a competitive advantage as they have created a service that adds value to an existing one but is unique to them alone. In the same example if the navigation system or tracking system could inform the customer that it requires an update and when the customer makes a payment the system updates using hotshot access. The convenience f this ensures that the customer is locked-in, and will not look elsewhere for the same services.
Strategic flexibility, which is capabilities used to respond to various demands and opportunities existing in a dynamic and uncertain competitive environment (Belabored et alarm 2011), improves e-business agility, which is its ability to post above average returns in an ever changing dynamic environment, due to quick responses to changes in the environment (O’Brien, 2003), as shown by an e-business that ensures that continued research, learning and training improves its service offering such as hospital in India hat specializes in the performance Of hip and knee replacements and diagnoses and recruits their patients online through a series of consultations, which are free, resulted in their opening up their client base to include people from all over the world.
They have a support system that follows up on patient care which assists in referrals, as patients share their experiences with others with similar ailments. The hospital no longer waits to patients to come to India, it has brought Indian state of the art healthcare to the global market online. Omen Inc. As illustrated by Cyprian (2003) adopted the growth strategy wrought the introduction of an online design room, which both designers and customers use to design, order and purchase customized faucets. The information system integrated the CRM and the SCM systems to produce a new product offering. They not only expanded their customer and supplier base they expanded their product lines.
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