Information System Management in Organizations Assessment 1 Answer
Assessment 1: Report
MANAGING INFORMATION SYSTEM
The definition of Information System (IS) or Information Technology (IT) enabled innovation suggests that it involves IS or IT enabled improved products, services, processes and systems with the aim of improving organisational performance, creating competitive market advantage and/ or supporting the strategic goals of an organisation (Pearlson, and Saunders, 2019). Over the years of rapid technological enhancements of computational technologies advancements in IS or it has enabled innovation in companies resulting in various types of advantages. In this assignment, four organisations have been selected where the innovation has been done by considering the IS/ IT and also the discussion will be made on the basis of the success, and overall learning will also be analysed. Apart from this, the various external and internal factors that influence the IS/IT-enabled innovation will also be evaluated, and at last, some viable recommendation will be made.
4 examples of the use of IS/IT for innovation
Using IS/IT innovation on business involves many examples of successful organisational cases. Such cases discuss how IS or IT innovation resulted in improved business performance and competitive advantage for companies.
The first exemplary case to be discussed here is of Toyota’s business innovation enabled through IS and IT advancements. Over the years of its functions, Toyota has incorporated new information processing technologies in order to respond to various internal and external changing trends and demands of business, resulting in propelled growth and innovation. From 1995 to 2000 advancements in administrative systems were observed for Toyota making information systems more adaptable globally. From the early to late 2000s, Toyota's overall management structure was reformed by standardising all business application systems through standardising IT infrastructure. IT innovations in the engineering system resulted in more integrated and usable engineering data globally and improved product range resulting in competitive advantage and cost leadership (Monden, 2019). Thus, in Toyota business innovation has been a result of the integration of IT and IS in the business methodically and strategically over the years of the company’s global operations.
The second innovation case example can be discussed in relation to the use of Big Data analytics for boosting customer acquisition and retention by Coca Cola. A digitally-driven loyalty program has been introduced in the year of 2015 by the coca-cola to extend their data strategy. In this case, big data analytics was used to build the program as a result of which better customer retention at Coca-Cola was observed. In the world of digital technology, data is more valuable than others in organising product development and maintaining the marketing activities, knowing the view-points of customers is increasingly important. The IT technology of Big Data analytics when integrated into the aspects of market research, and managing customer relations, staying connected with customers and informing better product development was enabled for Coca Cola. The managers at Coca Cola detailed that, powered by the data, Coca Cola has been able to develop better content for different types of markets resulting in improved market share in the global soft drink industry (Vyas et al. 2019). Therefore, Big Data has provided better competitive advantage and customer management provisions at Coca Cola.
The renowned company Dell has strategically used Information System and technologies for as a part of their cost leadership strategy and achieved the benefit of becoming the lowest cost producer of computers. Laptops and other forms of hardware. Dell has implemented in the manufacturing and logistics divisions as a result of which they have successfully reduced the production and operational costs enabling them to pursue their cost leadership strategy. As a result of these endeavours, Dell has become one of the largest personal computer vendors in the world. For implementing IS in areas like order processing and pre-production in the logistics functions has enabled enhanced process flow, providing better business outcomes. Moreover, IS has been extensively embedded in the areas of e-commerce resulting in Dell to use online systems for selling $5 million worth of products on a day-to-day basis (KabiiMuthamia, Wanyembi, and Matoke, 2018). Using Management Information Systems, Inventory Control Systems, Enterprise Resource Planning, and various information processing tools has enabled operational efficiencies at Dell over the years. The ERP procurement application used by customers improved the ease of ordering products whereby Dell coordinates with more than 20 ERP suppliers for ensuring that all ERP data transactions are accepted by Dell. Moreover, IT has also enabled improved online customer service provision at Dell. By using IS, Dell has reduced the high costs associated with service and technical support as these provisions include too many employees and high cost for service delivery. The Virtual Integration strategy enables both customers and technicians accessing similar tools and information through personal support sites (Ragupathi et al. 2018). Therefore, IS or IT innovation at Dell is clearly visible in the cases of MIS for achieving cost leadership.
The last example of IT/IS innovation in business involves the case of Amazon. Amazon has displayed its strategic use of IT through its online circulated ordering system where the most prominent business benefit has been market leadership. Amazon’s journey began in the year 1995 when it implemented an order fulfilment system and a website system separately resulting in improved security and having a huge database running on Digital Alpha Servers. A huge investment has been made by the Amazon in the year of 2000 to develop a new system, and the amount was nearly $200 million. Amazon’s use of management information systems is not limited to using Information Systems for internet activity but also involves using the transaction processing system for business enhancement, embedding IS in supply chain management and customer relationship management. Amazon has gradually empowered the organisational activities through strategically integrating IT and IS in business provisions resulting in creating its online full-service systems. The benefits of such strategic moves include smart innovation, enhanced CRM, limitless and lean inventory, and improved customer care, the high margin in profit and lowest price enabling cost leadership, and improved marketing and promotion using internet technology. Amazon has implemented e-CRM for enabling better customer selection and acquisition using strategies like customer accounts, wish list and review systems using IS and IT innovation resulting in bringing revolution in the e-commerce business (AL IMRAN, 2014).
Success factors and/ or lessons learned
Four examples have been detailed in the last section for detailing how IS and IT innovation has been used by the prominent organisation in the age of technological and digital transformation. In this part, the success factors with respect to the examples observed in the previous section are discussed. The lessons learned section is omitted because all the examples involve successful business cases of using IS and IT innovation.
With respect to the case of Toyota using MIS and IT for business innovation, the major factor that worked best is gradually improving and integrating IS and IT in business provisions over the years of its functions. Toyota’s key to success was matching environmental trends and demands of technology by integrating the popular systems in the business provisions. By integrating IS in the administrative systems during the late 90s and early 2000s, Toyota achieves more efficiency in the business administrations. Another success factor for Toyota was achieving revolutionary and improved product range as a result of standardising IT infrastructure. IT innovationsand integrating those in the provisions of production and manufacturing (Monden, 2019). Overall these critical success factors enabled competitive advantage and cost leadership in Toyota.
The CSFs for the case of Coca Cola in using Big Data was with respect to using Big Data for customer approach. Because data plays a critical role in marketing and product development, Coca Cola by using Big Data Analytics gains a direct window to the thoughts and perspectives of the consumers. As consumers express their views using social networks, internet and emails, Big Data Analytics Coca Cola was able to observe various customer related trends and patterns. Using Big Data understanding the modern-day client, predicting their purchase intentions and behaviours has become easy for Coca Cola (KabiiMuthamia, Wanyembi, and Matoke, 2018).
The CSF for Dell was with embedding IS in the areas of e-commerce which not only helped the company to drive $5 million worth of daily sales but also increasing operational efficiencies by using Management Information Systems, Inventory Control Systems, Enterprise Resource Planning, and various information processing tools. What went good for Dell with strategic implementation of IS and IT was achieving improved online customer service provision and reduction in the high costs associated with service and technical support. At the same time, the Virtual Integration strategy has enabled access to similar tools and information through personal support sites by both customers and support technicians (Ragupathi et al. 2018).
With respect to Amazon, the CSF if integrating different types of information system provided different types of benefits. For instance, strategic integration of the IT and IS in business provisions resulted in the creation of its online full-service systems and empowered organisational activities. More specifically, smart innovation, enhanced CRM, limitless and lean inventory was all possible through implementation of transaction processing system for business enhancement, embedding IS in supply chain management implementation of electronic customer relationship management.at the same time, e-CRM has enabled better customer selection and acquisition using strategies like customer accounts, wish list and review systems (AL IMRAN, 2014).
Impacts of internal and external factors
The success or failure of IS or IT-enabled innovation is impacted by various internal and external organisational factors. The most prominent internal factors influencing IS/IT-enables innovation include human and capital resources, operational efficiency, organisational culture, firm infrastructure and ongoing innovation. At the same time, external environmental factor affecting the integration of IS or IT innovation in business include economic situation, consumer demands, technological trends, competition and changing political and legal scenarios of business.
Considering the internal factors, internal factors such as organisational culture, leadership and firm infrastructure play a crucial role in successfully embedding IS/IT-enabled innovation. The absence of properly skilled human resources or insufficient amounts of capital resources can stall the progress of IT/IS enabled innovation on the other hand adequate amount of skilled human capital and funding can ease the way of IT innovation in a firm (Augustsson et al. 2019). For instance in the case of access to $200 million helped in the implementation of new IS successfully that resulted in Amazon using management information systems in not only for internet activity but also for using transaction processing system for business enhancement, embedding IS in supply chain management and customer relationship management. At the same time, organisational culture and leadership also have a profound impact with regard to the successful implementation of IS/IT-enabled innovation. Leadership and culture are the key factors embedding innovation in the aspects of organisational strategic goals. In this regard, the example of Toyota, Apple and Google can be used. In all three companies, innovation is viewed as a culture for which strategic goals include improved business processes by utilising the new forms of Information Systems and digital technologies for processing daily business functions. At Google, the particular concept of built-in innovation time is encouraged by employers where employees can work in side projects to enable innovative processes in the business (Dolata, 2017).
With respect to external factors, government and law can enable successful IS/IT-enabled innovation through offering R&D subsidies and tax credits which essentially reduces costs associated with investments in IS/IT-enabled innovation made by the firms. On the other hand, the demand side of innovation has propelled integration of IS, or IT enables innovation in firms. High demand from the consumer’s side influences alternatives among competing paradigms. This has been the case of Toyota, where Toyota embedded IS and IT-related innovations following the demands and market technological trends observed in different decades, making sure that the technologies they use match the ongoing business trends. At the same time, high market competition forces organisations to focus on implementing IT and IS for driving innovation in the organisational processes and activities (Augustsson et al. 2019) and for instance, using Big Data analytics by Coca Cola for information gathering in order to improve customer service provisions as a response to increased market competition observed in the soft drink industry where Coca Cola was required to come up with innovating marketing and promotional techniques to remain the market leader. Same goes for Amazon whereby Amazon, in order to become the market leader pressured by increased market competition in the e-commerce business decided to use, IS and IT systems to involve innovation in the form of TPS, MIS and ERP.
With respect to the question of which class of factors (internal or external) are more important, it is appropriate to suggest that depending on the case of IT/IS innovation both internal and external factors can hold equal importance. As observed in the case of Amazon and Toyota, both internal and external factors equally contributed to driving IS or IT-enabled innovation in business. According to Williams et al. (2019) while these factors can act importance of none of the class differently can be diminished as these factors influence different areas and focus of implementation of IT or Information System provisions and equally contribute to enhanced business performance.
Recommendations and guidelines
- The initialisation of data mining and big data analysis is an important step towards innovation. Because data mining and analysis of this data through AI enables organisations to interpret and conduct an in-depth analysis of the existing data. Such interpretation enables them to identify market demands and develop products or services according to it and drive successful innovation as a result.
- Investing in cognitive computing is also recommended. Because implementing cognitive computing can impose greater transparency as well as data control. As this technology can eliminate human error and can perform the batch process of similar tasks, it can enhance an organisation's performance. Such, performance improvements are the core driver of innovation in any organisation.
- Implementation of Artificial Intelligence or AI in the organisation is also recommended. This is because AI gives IT systems autonomy, and this autonomy is productive in nature as well. As AI can automatically study a data set as well as interpret it, implementation of AI can be used by organisations to embark towards innovation.
- Furthermore, ensuring the safety of the IT/IS system is the necessity for any organisation. With the advancements of technology, cybersecurity has become a prominent focus for the IT services. Because a breach in the security system and unauthorised access of data through it can destroy both reputations as well as an organisation's data. Therefore, implementation of the firewall to secure network, VPN service to secure data packets during communication and periodical backup of data is important.
This report has focused on the exemplary case studies of Toyota, Coca Cola, Dell and Amazon with respect to the area of implementation of information technology and information system for enabling organisational innovation and enhancing overall business performance by gaining cost-leadership, competitive advantage, improved profits and enhanced business processes. In conclusion to the critical discussions, it can be said, in all cases, success has been observed with respect to IS/IT-enabled innovation. By following the recommended guidelines, organisations can positively succeed in their effort to embarking the use of IS/IT for innovation for business.