Discuss about the Business information System of Woolworth.
Woolworth is one of the Australia’s largest supermarkets. The company was established in 1931 in Cape town. It provides clothing, general merchandise and wide range of food products. The company operates 995 stores worldwide. The company relies on 115,000 team members to provide convenient and superior service to clients. The company stocks up 96% of all fresh fruit and vegetables and 100% of fresh meat from Australian farmers (Woolworths Group, 2018).
The purpose of this report is to make strategic decisions related to the replacement of organisation’s information system. Woolworth is having trouble to remain competitive in the market place. So, the company is suggested to update information system (Abramowicz, Alt & Franczyk, 2016). To follow this process identification and description of Woolworths is discussed.
Woolworth Limited includes segments like food and petrol, supermarkets, drink group and hotels. Woolworth Supermarkets is an Australian supermarket. The company is listed on the JSE Limited Securities Exchange and engaged in retail operations. It is owned by Woolworths Limited. The company sells groceries, household products, DVDS, stationery items, health and beauty products and more. The company provides superior quality merchandise at reasonable prices. Building relationship with customers is a acute factor for the success of company. It ensures that the company is meeting need of customers with increasing consistency. The company believes in delivering quality, innovation, reliability, value for money, energy, service and sustainability to win trust of customers. The company achieved margin of 7% which increased to 8.7% in 2010 (Fastmoving, 2018).
Woolworth also provides fiscal services which is a joint undertaking between Woolworths and Barclays Africa Group. It was established in 1994 to offer value added financial services such as loans, credit card, Woolworth’s store card and short term insurance.
The food industry in Australia is a complex one. The industry includes organisation and planning of production, processes, packing and marketing of food products. The country’s diversity of environment and geographical location provides many advantages to the food industry. The company offers many employment opportunities in the food industry. The food industry in Australia is a major player with 1.68 million employees in 2010-2011 (Woolworths, 2018). The food industry contributes heavily to Australia’s gross domestic product (GDP).
Woolworth is in service since 1931. Being a senior manager of Woolworth it is experienced that the company is facing problem to remain competitive in the market place. A report by KPMG also suggested that the company information system is out of date by twenty years. It needs a major update to remain competitive in today’s business environment which is information based.
Woolworth is one of the trusted brands of retailing. The company uses refined technology to oblige millions of customers. The retailing system is at the core of company’s daily processes. The source of evidence about products of company and trade partners facilitates the process of order, price and delivery of products to store (Dwivedi, et.al. 2015).
Woolworth is continuously improving the way of conducting business activities. In 2008, the company tied up with technology supplier SAP to sustain transfer of new merchandising system (Spillan & Ling, 2015). This system will moderate complication for trade partners by eliminating manual product information processes and empowering electronic data receipt using NPC (National Product Catalogue). NPC maintains standard of industry information worldwide.
Since 2011, the company have competency to obtain data from industry record NPC in Australia and New Zealand. The company aim to receive information of product and price via NPC, using GDSN (Global Data Synchronisation Network) standard. The electronically shared information enables the exclusion of product specific paper forms from business (Methner, Hamann & Nilsson, 2015). The company is not able to compete with the large retail chains on the prices of products due to differences in scale.
The analysis of internal and external factors of Woolworth can be determined by the actively response towards changes. The internal and external aspect which affect Information Systems Development approach and IT/IS Alignment approach are:
Woolworth is one of the recognised and trusted brands in retailing. The company is one of the largest corporations and involved in internal and external business environments (Prajogo, et.al. 2018).
The internal environmental factors are found within the organisation. These factors can be controlled by the company. The internal factors of Woolworth are:
Competitors:
Woolworth’s major focus is on competition.
The company dominates 39% of Australia’s super market share.
The company increases advertisement by 8% every year.
Buyers and suppliers:
The buyers come under the internal factors of company. Their actions can be controlled by the company.
The managers are hired to contact with suppliers and establish a supply relationship.
The manager count can be increased by local sourcing strategy and putting pressure on purchasing local produced products (Lewis, et. al. 2015). The producers can supply to various stores.
A buyer was dismissed in 2010 because of taking promotional fee.
The suppliers supply locally, sustainably and ethically.
Supplied locally:
The local supply includes 96% of fresh fruit and vegetables, 100% fresh meat, 96% of bakery and 62% of fresh seafood. The grower’s scheme permits consumers to meet growers with a picture and description of their products.
Supplied sustainably:
100% of company’s home brand tissues, kitchen cloths, catalogue paper and furniture are sourced by the third party approved supportable bases.
The sustainable sources source long term goal of company of having fresh sea food and fish.
Supplied ethically:
The company expects to phase out cage produced eggs. It commits to compete in 2018 when there will be no cage produced eggs will be sold in home brand products.
The chicken meal sold in Woolworths is supplied by RSPCA approved farms.
The external environment factors are the events which take place outside any organisation. These are hard to predict and control by the organisation. It includes:
Environmental
Woolworth is supposed to reduce 40% in carbon emissions on the projected growth level.
The usage of water is supposed to be reduced by 200m litres.
The environmental aspects majorly focus on the zero food wastage (Harris, Lavelle & McMahan, 2018).
25% reduction is supposed to be made in carbon emissions per cartoon delivered by the trucks of company.
The company has to advance and implement strategies for ethical sourcing, animal welfare, palm oil, fish and sea food.
Up to 30% decline in carbon emissions by company fleet
Economical
The economy of Australia plays a great role in retail sector. The fluctuating foreign exchange rate impacts on the import of foreign products.
The economic factor challenges operations in the Australian economy.
The internal and external factors of Woolworth affects selection of an Information Systems Development approach and IT/IS Alignment approach. These factors create competitive position.
The traditional development approach is a process of developing software application for a business. It includes activities from initiation of activity to post implementation activity. It is useful in operations, transitional and revision of a business. The traditional approach is also called structured system development. The system development approach is the process of describing, scheming, testing and executing a new software application. It undertakes internal development of adapted systems, formation of database systems and acquisition of third party developed software (Paré, Trudel, Jaana & Kitsiou, 2015). The management of organization should be able to define and implement standards and adapt an appropriate system development lifecycle approach. This process should govern the process of development, application and upkeep of computerised information systems and associated technology (Rajnoha, Kádárová, Sujová & Kádár, 2014). The traditional development approach includes preparation, analysis, design, application, testing and incorporation and finally maintenance.
System planning:
Planning is the most decisive step for creating a successful system. In this phase the company decides what exactly it wants to do and the problems by defining the following steps:
System Analysis
The end users obligation should be recognized and determined. The expectations of users from functioning of system should be considered. A practical study should be made for the project decisive whether it is economically, socially, organizationally and technically feasible. It has great importance to uphold strong communication with customers (Anderson, Wipfel & Westerfield, 2015). So that a clear vision of the products and functions can be made.
System Design
The system design phase derives after maintaining good understanding with requirement of clients. It describes the fundamentals, constituents, segments, safety level and different boundaries and the data that goes through the system. Initially the system design can be prepared on a paper to figure out how system is going to look like and it’s functions. Afterwards, an extended system design is formed to come across all functional requirements logically and physically (Lee, Thomas & Baskerville, 2015).
Implementation and Development:
The phase of implementation and deployment arises after a complete consideration of customer necessities. It is the build-up procedure after having all the complete requirements required for the requested system. The definite code is written in the software development. If the hardware is in the system than the application phase contain conformation for the hardware to meet requirements and functions. The structure is ready to be arranged and fixed in the customer premises for this phase (Miettinen & Paavola, 2014). The system is productive and ready to run and training may be requisite for the end users to get familiar with it. The duration of implementation phase depends on the complexity of system.
System testing and integration
Different constituents and subsystems are bring together to create the complete combined system. After this the system is presented to different efforts to obtain and evaluate the output, behaviour and functions. Testing is significant to safeguard customer satisfaction and involves no knowledge in coding or design (Ståhl & Bosch, 2014). A specialized personnel team and real users can perform testing. The training is methodical and computerized to certify that the actual outputs are compared to the forecast outcomes.
System maintenance
A periodic upkeep is carried out in this phase. The maintenance is conducted to make sure that the structure remains update and won’t become obsolete. It includes replacing old hardware and evaluation of performance on regular basis (Zhang, Shan & Liu, 2018). It includes updates for the certain constituents to meet appropriate principles and latest technologies to face threats.
IT/IS alignment approaches makes an organisation to use information technology to achieve organisational objectives.
Operational alignment:
In the past IT research expanded the scope of alignment to correspond internal domains. The operational alignment refers to the alignment between the business and process. It considers three important aspects such as, infrastructure, process and skills. It includes structure, policies, process, personnel and activities. It depends on the capability of management to integrate infrastructure and process of business (Wagner, Beimborn & Weitzel, 2014).
Intellectual alignment:
This alignment supports the business strategy as an association between organization’s strategies set to MIS’s strategy set. The strategy set includes the missions, objectives, orientation, plan and strategies. This traditional strategy emphases on bringing IT and business strategies into agreement.
Cross-domain alignment:
The intellectual and operational alignment finds out the linkage at the same level. This methodology addresses of view of alignment by taken into account the approach and infrastructure simultaneously (Wu, Straub & Liang, 2015).
Software Development Life Cycle (SDLC) is used to plan, develop and test high class soft wares. It objects to produce high quality soft wares which can meet expectation of customers and can reach completion within the time limit. SDLC is the base for all the systems development approaches. The approaches emerged after SDLC are SSADM (Structured Systems Analysis and Design Methodology), Agile and IDEF (Integrated definition) methodologies.
SSADM:
The SSADM have been established after the request of UK government and primarily practised by the government institutions. This method is more similar to the traditional waterfall model. It considers review and commitment of each phase before initiating for the next phase. After passing one phase, previous phase cannot be reviewed. This method focuses on the analysis and proposal stages of the SDLC. The main problem with this method is that it is rigid and inflexible approach (Abdelrahman, 2015). The stages of SSADM include feasible study, analysis of current environment, requirements specification, business system options, technical system options, logical design and physical design.
Agile software development:
The agile software development is also known as value driven software model. There is no proper software followed to develop software in Agile. But there are some important facts which are effective for human factor. This method focuses on quick response to the required changes and continuous development of systems (Sellers, et. al. 2017). Agile is becoming more popular due to it’s compliance and flexibility. It helps to complete projects faster and improves ability of organisation to meet customer satisfaction and improve productivity.
IDEF:
IDEF is the most common method used in software. It is a family of modelling language and covers a wide choice from functional modelling of data, recreation, object oriented design and knowledge attainment. There are various IDEF approaches such as IDEF 1to IDEF 14 used for information, data, simulation, process description, object oriented and more. IDEF was originally made for manufacturing environment. IDEF0 is a part of IDEF family. It defines the effective communication between system analyst and customers. It captures system requirement in a better way. It is built on the three things, functional modelling language, structured analysis and design technique. It created a model for the judgments, actions and activities of an organization or system.
BITAM (Business IT Alignment Method):
This method provides a set of methodology of 12 stages for supervising, identifying and modifying misalignment. It is an incorporation of business analysis and architecture analysis. This methodology invites shareholders to take part in project. The shareholders are invited to consider a range of repositioning strategies. It includes 3 layers of business system, business model, business architecture and IT architecture.
SEAM (Systematic Enterprise Architecture Methodology):
SEAM considers an organisation as a complex one which is continually in progress. This methodology is an enterprise architecture model. It can be used to signify changes of environment. It reflects four organisational levels, business, company, operation and technology. The business level represents company and it’s partners to understand value created for customers. The company level represents internal process and interactions to attain strategic goals. The operational level embodies the people and systems composing the company (Randall, 2017). The technology level denotes the technical infrastructure comprising systems.
IDEF and Agile methodologies seem the most appropriate system development approach in the competitive market. The scalability and tractability both methodologies allow meeting of system requirements in an inclusive way. The provision of systems to customers likes to lead better customer satisfaction. There is free flow of communication and anyone can present ideas within the team. The inflexibility and inelasticity of SSADM makes it inappropriate in the current competitive position of market.
Pros of Agile:
Responding to change:
Agile method brings emphasis on responding to change and focuses on working projects. This advantage provides the best solution to the customers (Chen, Kazman & Haziyev, 2016).
Accepting uncertainty:
It accepts the fact that the software is unknown to project when it is started. It discovers the information when it goes on and finds a particular technical solution.
Fewer defects in the final product:
Agile ensures that the defects are detected very early. It’s continuous process of develop, build and trust reduces the number of defects and the cycle goes on.
Faster review cycle:
To respond uncertainty and change there is need for the rapid and faster review cycles. It ensures that the current efforts are evaluated.
Cons of Agile:
No fix prices:
The price of software product is not fixed. The clients do not get to know the cost of product when the project starts. They just get the estimate.
Flexibility can lead to bad behaviour:
The lack of formal training and understanding can lead to teams engage in dysfunctional activities which results in bad behaviour.
Lack of predictability:
There is lack of flexibility in agile methodology. It focuses on the work what is necessary to move to the next phase. The uncertainty in efforts and value responds to change over a plan.
Pros of IDEF:
Accurately responds to the problem area:
IDEF defines, communicates and discusses the system elements in order to analyse effectively.
Well documented robust standard:
IDEF is a well-documented strong standard which can be used without defending any technique. There are various tools to support IDEF modelling.
Limited set of notation:
IDEF uses a partial set of notation. A person can easily understand IDEF diagrams in less than an hour. It follows a formal procedure for naming processes and diagrams (LingZhi, Leong & Gay, 2016).
Cons of IDEF:
Difficult to integrate techniques:
The methodology was established long before the evolvement of tools and is tough to integrate IDEF techniques.
No consistency:
IDEF do not have reliability between different levels of modelling. It makes difficult to uphold for software.
No support of software tools:
Many software tools do not sustenance IDEF which makes difficult to continue IDEF numbering notation.
The BITAM methodology considers two distinct analysis, business and architecture analysis. The stakeholders of Woolworth can be benefitted by IT/IS alignment approach as it considers arrange of realignment strategies. It identifies the involved domains of network. This approach is going to help company in considering the external environment.
Pros:
Communicate to create a plan: The BITAM methodology migrate the business towards their goals. The findings are shared between business managers and IT delivers to achieve business goals.
Implementation and training: In this phase, BITAM understanding of the working of tools. So, whenever the new solution is implemented, a proper training is conducted to tell the use of tool and the reason behind usage (Öri, 2017).
Cons:
More mechanistic: BITAM is more mechanistic and fails to capture the real life. The methodology is not successful if the business strategy is unknown.
Ubiquity: The methodology has matured due to ubiquity and lost strategic value. The call on management has missed focus on IT related aspects.
SSADM focuses on the analysis and design phase of the traditional waterfall model. So it considers all the advantages and disadvantages of the waterfall model. Agile and IDEF0 are other successors of waterfall model. These both models have advantages of waterfall but the disadvantages were mended. The advantages are regressive scalability and tractability. These advantages can be useful for Woolworth to standardize management and daily work by developing a lifecycle. It helps to deliver the system which is less specious, bug free compared to SSADM.
Usually the businesses require the software which can complete the process in short duration of time. SSADM takes long time for development as it is required to complete previous stage before moving to another. The methodology not only takes more time but it requires money as well. The organisations are supposed to have large resources to make use of SSADM. The methodology is not flexible and there is lack of involvement (Isaias & Issa, 2015). The methodology was prepared mainly for the government institutions. In this scene SSADM has nothing much to do for Woolworth. In order to suit the requirement of competitive environment SSADM still remains obsolete. Since the IDEF and agile makes changes according to the requirement of customers SSADM does not appear appropriate with these changes. SEAM is not beneficial for Woolworth due to it’s perception towards organisation is complex one. It represents internal process to attain strategic goals. This methodology is less concern for the external environment. It focuses more on technical infrastructure.
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