Discuss about the IS Strategy and IT Management Structure for Case Study of Wal-Mart.
Information systems are used for supporting the different types of activities associated with the business operations of an organization. In today’s world, management of the supply chain activities has become too complex. ERP software or information systems are helping the traditional business organizations to efficiently handle the supply chain activities systematically through the use of the computer software (Bendoly, Bharadwaj & Bharadwaj, 2012). The information systems are able to handle all the activities such as SCM, HRM, marketing, scheduling, accounting and other relevant business activities. The information systems are able to help the business organization to handle all these activities through a single computer system (Gallagher & Sixsmith, 2014). In this report, the use of the IS and the management of the system for handling the contemporary business activities of Wal-Mart have been discussed. In order to handle the IS properly, efficient level of management is required for the IS. The risks management strategy used by the case study organization also analyzed in this report.
Wal-Mart is one of the largest retailers in the whole world. The company is conducting the contemporary retail business over the whole U.S. The company also uses the internet platform for their business operations. Starting form a small retail store, the company is now operating a worldwide business. Currently the company has more than 11,500 individual stores in 28 different countries. The company is operating their business with a lot of different types of product lines. The product range of the company cover the general household items, grocery, food, clothes and some electronic products. In the financial year 2015-2016 the company has generated the revenue of near about $482 billion. At present, the number of total employees within the organization is almost 2.3 million. In only U.S. they have near about 1.5 million employees. Handling the huge number of employees and lots of different types of business operations is not an easy task for the company. Due to the broad range of product line, the supply chain management activities of the company is too complex. The company is using an efficient ERP software package as the IS for handling all the complex operations through a single software platform.
Wal-Mart is the biggest chain of retail stores of the world. It has its stores in every corner of the globe. To manage such a huge network of retail stores all around the world it needs to have an information management system (IS), an Enterprise Resource Planning (ERP) system to conduct its business with ease and with great efficiency (Arvidsson, Holmström & Lyytinen, 2014). As a matter of fact Wal-Mart uses high-end cutting edge technology in its operations to crush its competitors and to cope up with a huge business. To possess and ERP system and to manage it for the best results Wal-Mart optimises its information management system through certain methods such as governance structure, processes of ERP and its policies. For this, Wal-Mart extends some structure such as:
Creating an institute for IS governance and practices: The best known practice to govern and optimize the ERP system of a company is through its own members and employees. NO one knows the requirements of an organization better than the workers employed in the company. The owners of each process of Wal-Mart and people involved in the process are the best option to oversee and improvise the ERP system according to their needs (Leon, 2014). For smooth governance of the formulated structure there should be consensus of decision which is to be made among employees. There has to be suggestions and input from the employee side after observing the trends of business which improves the efficiency of Wal-Mart. There should be transparency of work in the IS module so that critical information is made visible to all. There should be an oversight of new opportunities that can be exploited with the use of information system in Wal-Mart.
Mastering data management: Governance of data is another way of presenting the rules and regulations. The establishment of policies and creation of information is a very important aspect of information system. Data governance in information system is the backbone for reliability of information. To collect the data received from different stores of Wal-Mart and to store in one place, it requires a disciplined approach without which the accuracy of data available will be compromised (Monk & Wagner, 2012). When data in the information system need to be changed the user sends a request for data modification through a form. The team of data managers are aware of the rules and policies of data alteration and abide by them. Then they make proper changes in the data fields of the respective requested data and also note the time of change. In this way, data management is done using an information system in Wal-Mart.
Utilization of processes: Definition of terms and quantities used in each business process should be present. These terms are the key performance indicators in the information system that allows its user to get an idea about the current status of business. These metrics are reported to the process owner in the information system. These processes are forwarded to the executive team and its evaluation is done from time to time. These processes reflect the goals of Wal-Mart and they should be SMART (specific, measureable, achievable, realistic and time-bound). These processes provide the base for any decision making by Wal-Mart which is derived from the information management system (Shaul & Tauber, 2013). Processes of the information system not only help the business end but also benefit the customers by analysing their requirements and demands with change of time and formulate the adequate system of discounts and packages. Reviews of the process which are being executed are also done by the information system to keep track of the business prospects. All of this can be easily done by using the information management system in Wal-Mart.
Using and implementing an information system is very important job for the success of Wal-Mart. Since it is a supply chain system which is being monitored and run by an information system, Wal-Mart needs to employ certain officers who can use and understand the information system according to the need of Wal-Mart. Therefore, company has employed certain executive officers who are in charge of the information management system. They oversee the entire framework and its execution. Information System is divided into modules and that too in different departments, which requires area of expertise. Information system in Wal-Mart is exhaustive and requires professional level skills to handle it with efficiency (Hoch & Dulebohn, 2013). The first and foremost module of information system, which needs optimisation, is the Graphical User Interface. To manage this module Wal-Mart has hired Technical Manager who is well versed in managing the interface and modifying it according to the need of the department. The executive members of Wal-Mart who are do other core management issue of information system:
Merchandise Manager: This executive member is in direct contact with the retailer department. He has to manage and maintain the records of goods received and retailed in respective stores of Wal-Mart. The track of price of products and services are kept in the information system by the manager who constantly updates the value of the market and the cost of products (Tsai et al., 2012).
Retail Planner: This member of executive panel is also involved in information system management. He plans large as well as small scale activities that needs to be executed with help of the information system. He derives the trend of sale of products according to the time of the year and season through the data reflected by the information system. Analysis of the requirement of any promotional and advertising events is done through information system ()Ram, Corkindale & Wu, 2013). It relays data of products on which much emphasis should be given depending upon the demand of the customers.
Supply chain executive: Supply chain is the core module of information system as far as Wal-Mart is concerned. Executive who oversees supply chain has to do intensive work on the information system to gather every detail of the data acquired by the IS to keep an up to date knowledge of all the stores running for Wal-Mart. The scope and duty of supply chain executive ranges from the purchase of goods to its retail (Jenatabadi et al., 2013).
Any information system is implemented to reduce the complexity and delay of time of the operations. There are certain benefits of the information system that no mechanism can provide. The automation of the entire operational processes of Wal-Mart is being done by the information system. It provides the transparency of data that is vital in decision making. The transparency is also between different departments of the company (Seo, 2013). ). The information system manages the inventory by keeping updated records of all the goods purchased and retailed in real time.It also displays the financial status of the company in real time. It includes every feature of the retail information system. Information system provides satellite communication which is in synchronization with the retail data that reflects the status of one store all across the globe which can be monitored by the chief executives to increase operational efficiency. Collaborative planning is done with the help of information system as it can be updated from any center of Wal-Mart from any country. Inputs and suggestions can be entered from different executives at a discussion forum provided by the IS which is reflected instantly in real time. Another important service provided by the information system to Wal-Mart is forecasting. The analysis of purchase and sale of goods at different places at different time of the year is done by the information system. This provides a cumulative data of resources that are available with Wal-Mart which is of statistical nature. This data is compiled for forecasting the future plan and market trends that improvises the services provides by Wal-Mart to its customers (Monk & Wagner, 2012). This method of forecasting is accurate and is used by the company to alter its operational decisions. Managing supply chain and product availability by the information system is done with precision and ease. Another very important service provided by the information system is exchange of electronic data. This feature adds to the financial security of Wal-Mart. Since there is huge amount of data that needs to be exchanged and managed which will be next to impossible to manage if it is in hard copy format (Shaul & Tauber, 2013). The electronic exchange of data is done with the use of information system through internet and satellite systems. This makes the data of one store available at another store for comparison and update process. The electronic data is not only stored and exchanged but also time stamped for future reference.
Overall implementation of information system is beneficial. But there are certain risks involved in the execution of this system. These risks can prove to be fatal for any organization such as Wal-Mart. But there are certain steps that are taken for minimizing the risk. Since the business management is merged with operations of the company, proper implementation takes time which makes the company vulnerable. The risks involved and its management are:
Inadequate Training: One of the biggest risks of information system is the lack of knowledge of the executives using this system. It needs a detailed training and high skills to implement this system. Companies hire professionals to handle the information system as it is complex and exhaustive. If the employees using the information system are not familiar with its working then they may cause wrong transactions and update process of data in the system (Jenatabadi et al., 2013). This can lead to serious consequences for the company in the long run as Wal-Mart is a supply chain driven enterprise and its main work is based on data analysis.
Stability of Software: Any information system is nothing but a software and being a software it will be prone to stability issues. There are greater chances of the software being unstable as it is designed to automate the largest retail chain of the world where it has to contain and manage enormous amount of data and that too in real time. Therefore to avoid this risk, the company should properly research the requirements of information system and should find the best information system developer to create the software for the company. After development, rigorous testing of the information system software should be done for finding discrepancies before implementing it in real time (Shaul & Tauber, 2013). It will reduce the chances of system breakdown and data loss.
Grace period: After the information system is developed and implemented it needs some time to get off. The IS has to be properly selected, tested and evaluated, implemented and then tested. Till the entire course of time the employees and users need to be patient with the working of h information system, get familiar with its working and features and learn how to use it to the full extent. If the process is not done correctly the company may suffer huge loss in the beginning as the entire operations of the company is being shifted to the information system (Arvidsson, Holmström & Lyytinen, 2014).
Selection of adequate software: Unfortunately, information systems are not generic software made once and can be used by all. It is a demand driven system that is company and service specific that requires proper contribution of the company’s executives at the time of customization. This system is built as per the need of the company which is of supply chain management in case of Wal-Mart. The compatibility of software with the operations and business of the firm is a risk that is greater than all. If there is any issue regarding the compatibility then the entire system becomes useless. To avoid this risk precautions should be taken by the company at the time of its development.
Approach: During the time of implementation of information system the approach should be time taking and not hasty. Giving less time for development and implementation increases the risk of things going wrong. As the entire system is changed to automation, alterations made in quick time exposes the chances of missing some important features of implementation. So, taking time and executing the system with patience reduces this risk (Hoch & Dulebohn, 2013).
In order to handle the system properly for getting the desired level of success in the future, the company needs to focus in the potential risks regarding the system use and should improve the management strategy of eth system. The following recommendations would help the company to use the system efficiently and get desired level of help from the system.
Conclusion:
This study mainly helps in providing benefits of ERP system or IS on an contemporary business organization. Thus, the main objectives have been tried to describe and has been concluded that it is necessary to adopt an IS first to serve as a corporate framework of information before the deployment of other corporate information systems which could help the firm gain desired effect. It is also observed that IS systems could be successful and become the backbone of the business operations of the company in new and future economy. Although in order to measure the benefits of the IS and SCM competencies more measurements for firm competencies needs to be drawn from the Information Systems. As a case study of the IS use, the example of Wal-Mart ERP system has been taken in the report. It has been found that one of the major reasons behind the great success of the company in the retail business, is the use of innovative technologies in their internal business operations. Use of the ERP software as the IS for the handling of the business operations and the HRM operations is helping the company to grow more in their business. The major limitations that could be observed is that most of the companies fail to keep records or even did not bother to trace back or evaluate firm’s performance after the project has been completed during the past.
References:
Arvidsson, V., Holmström, J., & Lyytinen, K. (2014). Information systems use as strategy practice: A multi-dimensional view of strategic information system implementation and use. The Journal of Strategic Information Systems, 23(1), 45-61.
Bendoly, E., Bharadwaj, A., & Bharadwaj, S. (2012). Complementary Drivers of New Product Development Performance: Crossâ€ÂFunctional Coordination, Information System Capability, and Intelligence Quality. Production and Operations Management, 21(4), 653-667.
Gallagher, S., & Sixsmith, A. (2014). Engaging IT undergraduates in non-IT content: Adopting an eLearning information system in the classroom.Interactive Technology and Smart Education, 11(2), 99-111.
Hoch, J. E., & Dulebohn, J. H. (2013). Shared leadership in enterprise resource planning and human resource management system implementation.Human Resource Management Review, 23(1), 114-125.
Jenatabadi, H. S., Huang, H., Ismail, N. A., & Satar, N. B. M. (2013). Impact of supply chain management on the relationship between enterprise resource planning system and organizational performance. International Journal of Business and Management, 8(19), 107.
Leon, A. (2014). Enterprise resource planning. McGraw-Hill Education.
Monk, E., & Wagner, B. (2012). Concepts in enterprise resource planning. Cengage Learning.
Our Story. (2016). Corporate.walmart.com. Retrieved 29 September 2016, from https://corporate.walmart.com/our-story
Ram, J., Corkindale, D., & Wu, M. L. (2013). Enterprise resource planning adoption: structural equation modeling analysis of antecdants. Journal of Computer Information Systems, 54(1), 53-65.
Seo, G. (2013). Challenges in implementing enterprise resource planning (ERP) system in large organizations: similarities and differences between corporate and university environment (Doctoral dissertation, Massachusetts Institute of Technology).
Shaul, L., & Tauber, D. (2013). Critical success factors in enterprise resource planning systems: Review of the last decade. ACM Computing Surveys (CSUR), 45(4), 55.
Tsai, W. H., Lee, P. L., Shen, Y. S., & Lin, H. L. (2012). A comprehensive study of the relationship between enterprise resource planning selection criteria and enterprise resource planning system success. Information & Management, 49(1), 36-46.
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