Managing Information System For Globalization

Examples of the use of IS/IT for Gaining Competitive Advantage in Business

Discuss about the Managing Information System for Globalization.

Emergence of globalization has lead to the use of information technology in the business. There is a need to use new technologies in the business as it has a direct impact on the productivity of the business. It facilitates in improving the communication process in the organization. Changes in the business environment force companies to interact with customers and clients on a regular basis for the purpose of acquiring information related to changes taking place in their tastes and preferences. Use of proper technology helps businesses to save time, cost and resources and results in improving the operational efficiency of the business. Along with this, nowadays, businesses undergo different security threats (Davies 2013,p.378).

Businesses use new technology for the purpose of protection of financial and confidential information which in turn facilitates in gaining competitive advantage over their rivals. This is possible as the businesses use technology to find new opportunities and grab new market that results in increasing its profitability. Along with this, information technology also gives rise to innovation in the business. It leads to improvement in the data storage, wide distribution of information and improving the quality of the products and services (Wang & Wang 2012, p.39).

There is a successful implementation of IS technology in the operations of different businesses. The example of unsuccessful implementation of IS is as follows:

Hilton hotels have implemented an information system that facilitates customers to book and reserve rooms in a hotel and order rental car through an online mode in order to make the process of booking and car rentals easier for the company as well as customers. The company has implemented transaction processing system (TPS) which facilitates in collection of the operational information of the activities carried out in the hotel. Hilton hotel does not have large amount of operations to be handled by the system due to which it became difficult and complicated for the business. Besides this, due to use of combination of hardware and software for the purpose of handling immense quantity of business and consumer data there is an occurrence of security breaches. This is because many private information of consumers are stored and malfunctioning of the hardware such as electrical outage that can result in damage of the integrated system. Along with this, there is also a need of technical people for the purpose of maintenance of the system 24 hours a day in order to integrate other departments with the system such as accounting, inventory, shipping and payroll ((Avison & Torkzadeh 2009, p.118).

The example of successful implementation of IS as follows:

Maidenform is a women underwear manufacturer that has implemented business intelligence system for the purpose of providing right information at right place. The implementation of the system has helped businesses to provide relevant and important information at all levels of the organization in order to make appropriate decisions at a given time. This has helped to attain a competitive edge over its rivals. This business intelligence system has helped in keeping a track of the changes taking place in the weather and preferences of the customers which in turn results in providing those products that helps in fulfilling the needs of customers ((Rainer & Cegielski 2010, p.289).

Success Factors for Successful Example

This has helped in improving the operational efficiency and productivity of the business. This has helped increasing the number of customers and value of the shareholders as the business is able to deliver right information to its stakeholders that are actionable. Information regarding weather changes helped in launching clothes which provide comfort to customers which in turn results in high profits. This system also helps in gaining information regarding the changes taking place in the fashion industry and provides clothes as per the fashion to its customers at reasonable price. This has helped in gaining a competitive advantage over other players in the market (Hall 2008).

Implementation of business intelligence system in Maidenform has resulted in saving time and cost of the operations carried out in the business. The main success factor is that managers gain information regarding the tastes and preferences of the customers and changes in the weather condition which in turn results making quick decisions regarding the products and services provided to customers in order to cope up with the competition. Managers can keep a track on changes taking place in the fashion trends which help the company to take an advantage over its rivals. There is also an occurrence of minimal human errors as the information is recorded in a digital form regarding payroll, shipping and inventory (Rainer & Cegielski 2010).

Business intelligence system has helped in integrating all the functions in order to improve its efficiency and efficacy. This system also helps in predicting weather conditions which help in deciding the material of cloth to be used to make the product as per weather conditions.  This system facilitates in gaining real time information regarding consumer behavior and develop strategies to fulfill their demands which results in increasing sales and profits and thereby customer loyalty. Business intelligence helps in improving communication at all levels of the business organization that results in increased productivity and efficiency (Mungree, Rudra and Morien 2013).

While implementing a transaction processing system in an organization, there is a need to allow customers to take active participation in designing of the system which in turn results in making user friendly system. In case of Hilton Hotels, the information system is not user friendly due to which customers find difficulty in providing their information related to their preferences and tastes. They find difficulty in making advance booking of hotel rooms and book a car on rent. In addition to this, the implemented information system is not secured as it breaches security during provision of private information by the customers. It is requisite for the information managers to make secured system which helps in handling the operational data provided by the users in an effective manner. There is a need of implementing TPS in such a manner that it produces reports and documents in a timely manner so that managers can take right decisions at right time. In this manner, the company can gain competitive edge over its rivals (Avison & Torkzadeh 2009).

Political Factors: there is a requirement of political stability in a country for the success of the hotel industry as there are several political factors that influence the number of visitors in a hotel such as number of tourists, and business travelers. There might be a possibility that number of tourists might decline in the country due to safety concerns. This results in decline in the sales of the business. The Hilton hotels are engaged in lobbying in order to influence political factors which results in providing competitive advantage over its rivals (Shelly & Rosenblatt 2009).

Lessons Learnt from Unsuccessful Example

Economic Factors: In the year 2012 during Olympic games, the Hilton hotels are fully booked and occupied but during financial crisis the sales and profits of the hotel are declined by 20% and 40% respectively. Besides this, inflation rate and GBP exchange rate has also a significant impact on the operational performance of the company (Cooke 2012).

Technology: Rapid changes in the technology forces companies to adopt new technology for the purpose of improving the operational efficiency of the business. In context to Hilton hotels, transaction processing system is implemented in order to handle day to day operations in an effective manner but due to some security threats it turned out to be a failure. In addition to this, implementation of new technology in the hotel helped customers to make hotel bookings and car rentals through an online mode which has resulted in an increase in the profits of the company (Perry 2009).

Social factors: The use of effective technology helps in tracking changes taking place in customer preferences and weather conditions which in turn results in providing products demanded by the customers and helps in improving the productivity of the company. In order to gain competitive edge over the rivals, it is necessary to keep a track of changes taking place in customer preferences. It has a major impact on the sustainability of the business (Groucutt 2008, p.53).

Human resources: organization pay attention on the recruitment and selection of employees as it facilitates in building capability, knowledge and experience of the organization capability. Providing training to employees helps in enhancing their productivity so that they can handle the objections of their customers in an effective manner in order to fulfill their demands effectively. This also helps businesses to gain competitive advantage (Elearn 2009, p.108). In case of Maidenform, the implementation of business intelligence helps in gathering information regarding customer preferences and predicting weather conditions in order to fulfill the demands of customers and get an advantage of bringing clothes as per the fashion over its rivals (Cadle, Paul & Turner 2010).

Management: The capability of management team and implementation of appropriate leadership style have a major impact on employees morale which has a significant impact on their performance and productivity and influence the overall capability of the organization. Nowadays, it is essential for the managers to involve stakeholders in the decision making process as it facilitates in achieving sustainable development of the company (Ryan 2009, p.26).

Companies do not have a power or ability to control external factors due to which it influence the success of the organization to gain competitive advantage in a significant manner. Besides this, internal factor can easily be controlled by the organization due to which it helps companies to attain an edge over its competitors. Therefore both internal as well as external factors are important to gain competitive advantage in the industry (Elearn 2008, p.98).   

Nowadays, rapid changes have been taking place in the technology and occurrence of globalization forces companies to adopt new information systems or information technology for the purpose of fulfilling the day to day operations of the business. Implementation of IS/IT systems helps in reducing the time and cost spent on executing the operations in the business (Bill 2009). It helps in improving the communication with the customers, employees and other stakeholders in order to fulfill their demands in an effective manner. Implementation of information systems helps in integrating different processes as it results in taking quick decisions (Davies 2013, p.376).

Impact of Internal and External Factors on Implementation of IS/IT in the Organization

The purpose of information system is to provide right information to right people at right time which help managers to take quick and effective decisions which in turn results in increased productivity. This facilitates in increasing the sales and profits of the company. In addition to this, use of information system also helps in spreading information about new products and services to customers that in turn persuade potential customers to buy products. This helps in increasing the market share of the company. Information systems helps in manipulating, tracking and storing information gathered from different sources in order to provide to appropriate people so as to make right decisions (Oz 2008, p.14).

The use of technology such as instant messaging, emails, video calls helps in sharing of the information across boundaries by the help of information system which helps in establishing harmonious relationships with the customers and other stakeholders. Along with this, it also helps in eliminating different barriers such as geographical, cultural and linguistic barriers and facilitates in sharing of the information in an effective manner. Use of advanced technology also helps in improving supply of information to decision makers and easy occurrence of the operations of the business which facilitates in improving the productivity and performance of the business and gain a competitive advantage over other players in the market (Wang & Wang 2012, p.42).

Along with this, implementation of information system also helps in providing 24×7 services to its customers in a smooth manner. This helps in increasing the customer base of the company as products are available to customers at their door steps. Along with this, there is also a reduction in the errors made by human beings as the information is recorded and stored in a digital form. Employees have easy accessibility of the information required by them as the whole information is stored in one information system which has helped in increasing the productivity of employees and thereby increase the sales of the company (Knapp & Zupancic 2007).

In addition to this, the use of information system provides custom information to employees which they want to make appropriate decisions. It also helps employees to increase their productivity and overall performance of the organization. Stakeholders get real time information related to changes in the business environment in order to formulate and implement appropriate strategy in the organization. Besides this, appropriate changes can be made in the information system in order to adapt to the changes taking place in the environment (Grant, Hackney & Edgar 2010, p.300).

Conclusion

It can be concluded that it is essential for the companies to adopt new technologies present in the market in order to gain sustainable competitive advantage as there is a presence of huge competition due to presence of large number of similar firms. Hiliton Hotel has implemented transaction processing system which turned out to be failure due to occurrence of huge capital and non use till its full potential. The example of successful implementation of information system is the execution of business intelligence in Maidenform where employees can access real time information regarding the changes taking place in the customer preferences and take quick decisions regarding the products that fulfill the changed demands of customers in order to improve its overall productivity. Implementation of information system helps in gaining sustainable competitive advantage as it helps in eliminating extra cost and time to perform the business operations.

References

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Bill, K, 2009, Sport Management, Learning Matters.

Cadle, J, Paul, D, & Turner, P, 2010, Business Analysis Techniques: 72 Essential Tools for Success, BCS.

Cooke, J, 2012, Operations Management: The Art & Science of Making Things Happen : what the Business Schools Don’t Teach You to Survive and Flourish, Ecademy Press.

Davies, PB, 2013, Business Information Systems, Palgrave Macmillan.

Elearn, 2008, Business Environment, Routledge.

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Knapp, G, & Zupancic, J, 2007, Advances in Information Systems Development: New Methods and Practice for the Networked Society, Volume 1, Springer Science & Business Media.

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