Discuss about the IT Management Issues for Developing Economy.
The current business environment is that of globalization and developing economy, and thus many businesses are trying to attain the maximum market attainable in both levels of market, that is, global and local markets. Everyday business people struggle to attain their ideal objective. For this reason, businesses have been working extra hard to tout-do their competitors in several different ways one of the commonly known way is merger and acquisition (M&A). The main objective of expanding and growing a business is to gain financial stability and profit maximization for stakeholders. (Gleich, Kierans, & Hasselbach 2010).
The assumptions made include the following: Monet has already merged, it has implemented the ERP and the intelligent portal. Also the loyalty scheme is being practiced.
Mergers and acquisitions (M&A) offers firms and companies possibility of a wider and bigger share in the market and diversification. Monet (group of 5 holiday resorts) are utilizing this technique for the purpose of growing the 5 resorts. The objective of the management’s decision was expanding their market, increasing the number of clients so as to get more, achieving financial stability and become more competitive. With the current conditions of economy M&A have achieved quality across the global market. Also technological advancement, competition and globalization has facilitated growth of M&A. (Dringoli, 2016).
Merger involves mutual agreement between two or more businesses to combine and become single business. The idea of M&A has brought about increased profits and reduced operational costs through operational and structural benefits brought by merger. The benefits that come around by merging are vast and include the following: the business is able gain power, control and dominance in the market environment, efficiency value is increased like cost savings and enrichments, resource sharing bring about economies of scale offering competitive advantage due to reduced costs, the risk of utilizing innovative methods of financial risk management is greatly reduced and the best benefit is tax advantage. (Sherman, 2011).
However, success of a merger depends on the efforts and strategies of the merging businesses. If this is not done well by the Monet management, it will lead to some disadvantages including: experienced workers will be lost, small merging business workers need exhausting training, the merger may experience difficulties due to competition among the employees of the combined resorts, there is over capacity of business that may require retrenchment and duplication. (Hassan, & Ghauri, 2014).
Information technology has led to development of new communication channels thus facilitating customer connection. In this generation nearly everybody is connected via the internet and people can easily connect and chat and share experiences. This has led to expectations of customers changing like they expect quicker, better and quality services. Clients now know that they possess power to choose what they want, where and when to have or go. Therefore, Monet implementing ERP systems and intelligent electronic portal is a way to satisfy these customer demand. (Chew & Gottschalk, 2009).
An information system (IS) is integrated components for gathering, processing, displaying storing information in form of knowledge. Monet utilizes such systems to run and control their day-to-day processes and interact with customers to attain market power. Also the company can use information systems such as ERP and web 4.0 portals to monitor and control operations and extend services to customers. (Cohen, 2012).
According to Worster, Weirich & Andera (2012), ERP implementation brings several benefits to the company including:
Competition- ERP software needs a big investment. But a greater cost lies in not making the investment. Businesses cannot risk failing to implement ERP while their competitors gain the benefits of employing the system. Seeking technology solutions will ease ways of lead generation.
Efficiency- An ERP solution get rid of duplicate processes and reduces greatly the urge to manually key in information. The system will also smoothen, and simplify business processes and improve efficiency for organizations to collect information, regardless of what department they are operating in.
Forecasting- correct forecasts are created through implementation of Enterprise resource planning software because it offers users and managers the tool they require. Business are able to make estimates that are more realistic and more effective prediction
Collaboration- department collaboration is important and a necessity in a business structure. Departments are able to operate together if the data keyed into ERP systems is consistent and centralized. The software also deals with most aspect of a business, thus automatically motivating collaborative, interdepartmental energy.
Scalability- designed ERP systems permits the addition of new clients and operates to improve the solution implemented initially with time. When the business is ready to move to the next step or requires more resources, ERP software should have the ability to facilitate that growth.
Reporting- ERP software ease reporting and makes it more customizable. With enhanced capabilities of reporting, the organization can respond easily to complex information requests. Consumers can also execute their reports without depending on the assistance from IT, thus saving time of the users.
Some of the customer benefits associated with the implementation of ERP include;
service delivery is fast- when inventory information is correct and is accessible easily, orders are sold faster. An ERP system enables updates of real-time to maintain correct inventory information. In circumstances where customers are used to booking resorts, or tours at the click of a button, faster booking order fulfillment is vital. (Kimbrell, Ellis & East Carolina University, 2013).
Accurate services- correct fulfilling services needs cross-functional collaboration between reservation, billing, tour guide among others. ERP data is distributed among several departments thus bettering insights, and keeping everyone aware about service status. When services are met correctly and on time, client satisfaction is enhanced and expenses that come with errors are reduced. (Chetty, 2016).
Improved Customer Service- When client service representative have permission to access detailed customer data all in one portal, customer requirements can be met faster. An ERP system can be structured in a way that the user is able to view the most relevant data on his or her custom-built dashboards for example client related information versus daily information of the entire system. Thus simplifying the access of required information. (Information Resources Management Association, 2011)
Lower Costs- ERP software minimizes operation and administrative costs by reducing errors, repetitive duties, and excess inventory. Monitoring operations also aids in prevention of downtime and disruptions, and enhance betterment of employee management and program. Best clients are prioritized and rewarded with free tours among other offers.
When organization processes are made better, both the company and clients reap the benefits.
Creation of such a portal will enhance interaction of Monet customers with their website. When customers visit this site, s/he will be recognized if one stands in front of the recognition devices like scanners and cameras the system will identify the customer and say word like: “Welcome to Monet, services at its best. How may I help you today “Customer Name””? such a system makes a customer feel recognized and have a feeling of belonging. Many people want a system that interacts with them with less typing and this system will be unique to Monet business. (Ozkan, 2010).
However, implementing such a system to a newly merged enterprise is a big risk to a business. This technology is sophisticated and may be complex to customers when interacting with it. Clients tend to prefer easy to use portals and therefore since web 4.0 will be a new technology, it may not be well received by customers. (Murugesan, 2010).
There are a lot of opportunities that can come up with merging the 5 resorts into one. The company may decide to diversify its services not only to be the normal resort services but they can venture into opportunities like transportation-airport pick up and drop for non-clients, entertainment- rather than the television sets installed in the resort rooms, the company may decide to venture in to cinema business where clients can be going there to watch movies. Such opportunities will expand the business territory and enhanced market power. (Nelson, Joos & Wolf, 2013).
Achieving loyalty requires giving back something to your clients through rewards like free meals, airport transfers, and free tours. Hotel businesses should acknowledge that loyal clients are more profitable but can also shift to other competitive resorts. The loyal customers of an organization should sometimes be offered goods or services at a lower price. This will increase their loyalty thus increasing the profit of the business. It is essential to give reason to your clients on why they should stay and utilize your services. (Zeidler, 2009).
The easiest and most efficient way of attaining this is by creating a client loyalty program. Investing energy and time in improving client loyalty should be a part of any business’ marketing techniques. If you fail to invest in client loyalty, the likelihood of losing more client than attracting them is higher. (Bainbridge, 2017).
An effective client loyalty scheme should utilize customer information and control each client’s interactions with your business. This should include what they buy, why, and when. This knowledge permits you to provide useful and targeted rewards, like vouchers and rewards on what they buy. Offers like this are useful to the as they will make the customer come back frequently. This will lead to more sales for the business as the client redeems their rewards and use more money with your business. (Humby, Hunt & Phillips, 2008).
Targeted and tailored offers may also have a higher perceived worth than generic unique rewards. Bespoke rewards make the client feel valued and improves the relationship with you. This is an evidence to the customers that you understand their requirements, and thus helps in attaining customer. In addition, it gives the feeling that you are investing time to focus on them which helps enhance a positive emotional reaction. (Zeidler, 2009).
This positive reaction can be employed and nurtured with the use of communications carefully. Frequent communication through the email or newsletter, will assist in relationship building and make your clients feel valued, while making sure they are updated on major pertinent rewards. Frequent clients’ engagement is also a method of achieving client loyalty. (Humby, Hunt & Phillips, 2008).
Benefits of Implementing Customer Loyalty Scheme
The following are some of the advantages of having a customer loyalty scheme:
Costs is reduced – The evidence is in the numbers: generating new businesses from an existing client is five times cheaper compared to acquiring new clients. As such building customer loyalty scheme will reduce the cost of having a new customer. (Agnihotri, Rapp & Business Expert Press, 2010).
Recommendations – the most efficient brand ambassadors are your satisfied customers. They are likely to recommend fresh business, which can ease sales and provide cheaper ways of lead generation. A survey conducted on customer loyalty revealed that approximately 20 percent of new sales achieved come from the existing clients.
Repeat business – Loyal clients invest more in your business. This is because they will repeatedly buy your services or goods over a long period of time. In accordance to the sales and business cycles, one loyal customer can bring more profit annually than maybe ten first-time clients.
Bigger sales – building relationships with loyal clients, leads to easiness on sales of higher volume of goods and. Thus, achieving client loyalty should yield larger profits and more sales. Clients that trust your business also listen and heed to your recommendations. This offers a chance to sell along your product lines.
Staying ahead – loyal customers place you ahead of your competitors. Organization that have built strong brand loyalty are immune to forces of competition which is vital in markets with regular new players.
Conclusion
It is said that a single size can never match it all. Many companies believe that the quickest method to widen business territories is exercising mergers and acquisition. Mergers results in economies of scale and collaboration resulting to reduced cost and increased operations. Stakeholders will agree to the idea of merging if they believe they believe it will lead to them having competitive advantage over their rivals. Advantages goes on and include gaining competitive advantage, market dominance, reduced operational costs among others. However, such a decision to merge come up with some disadvantages including employee competition and rivalry. Implementing ERP will make management of the different departments including accounts, tour guides, bookings among others.
Monet management, therefore, should go ahead to implement the decision because with it comes along a package of several advantages mentioned. Also for Monet to maintain market power then it should be gathering information on both their loyal and new customers on their preferences every season so as not to give them an option. It is also necessary for them to always follow up on clients about the services they received and what they would like get improved.
References
Agnihotri, R. S., Rapp, A. A., & Business Expert Press. (2010). Effective sales force automation and customer relationship management: A focus on selection and implementation. New York, N.Y.] (222 East 46th Street, New York, NY 10017: Business Expert Press.
Bainbridge, S. (2017). Mergers and acquisitions: A transactional perspective. Foundation Press.
Chetty, N. G. (2016). The operational benefits of ERP adoption by third-party logistics organisations in South Africa.
Chew, E. K., & Gottschalk, P. (2009). Information technology strategy and management: Best practices. Hershey: Information Science Reference.
Cohen, E. B. (2012). Issues in informing science and information technology. Santa Rosa (California: Informing Science Press.
Dringoli, A. (2016). Merger and Acquisition Strategies.
Gleich, R., Kierans, G., & Hasselbach, T. (2010). Value in due diligence: New risks, new mitigation. Farnham: Gower.
Hassan, I., & Ghauri, P. N. (2014). Evaluating companies for mergers and acquisitions.
Humby, C., Hunt, T., & Phillips, T. (2008). Scoring Points: How Tesco Continues to Win Customer Loyalty. London: Kogan Page.
Information Resources Management Association. (2011). Enterprise information systems: Concepts, methodologies, tools and applications. Hershey: Business Science Reference.
Karenfort, S. (2011). Synergy in mergers & acquisitions: The role of business relatedness.
Kimbrell, J., Ellis, M. L., & East Carolina University. (2013). The impacts of Web 2.0, Web 3.0, and Web 4.0 technologies used in distance education. Greenville, N.C.: East Carolina University.
Murugesan, S. (2010). Handbook of research on Web 2.0, 3.0, and X.0: Technologies, business, and social applications. Hershey, PA: Information Science Reference.
Nelson, R., Joos, I. M., & Wolf, D. M. (2013). Social media for nurses: Educating practitioners and patients in a networked world.
Ozkan, C. B. (2010). Free and open source software for e-learning: Issues, successes, and challenges. Hershey PA: Information Science Reference.
Sherman, A. J. (2011). Mergers & acquisitions from A to Z. New York: American Management Association.
Worster, A. J., Weirich, T. R., & Andera, F. J. C. (2012). Maximizing Return on Investment Using ERP Applications. Somerset: Wiley.
Zeidler, C. (2009). Mobile support in customer loyalty management: An architectural framework. Wiesbaden: Gabler Edition Wissenschaft.
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