Discuss about the Strategic Information Systems for Environmental Relationship.
According to Remenyi, (2010), Reponen, (2013), and Sprowls, (2014) a strategic information system is any information system that can change the process, goals, product, environmental relationship, and services at level of an organization to give an organization a competitive edge over its competitors. Moreover, Peterson and Saunders outlined that any decision concerning information system strategy cannot solely depend on the information collected from professional in the field of management information system. In addition to this, Benova and Gregus, (2009) state that management of information system cannot be focused on individuals aspects such as record keeping, accounting, and reduction and control of cost. Ideally, it is a necessity for managers to have a deeper understanding of information systems strategies in order to help in integrating information systems with the business strategies of the organizations (Corbit et al., 2008). Nonetheless, understanding of information systems can help the managers compare their system with that of their competitors in order to achieve full efficiency of the systems. According to Ankit (2016), the sole purpose of information system is to maximize the effectiveness of business strategies of an organization. Ideally, information systems are effective in reducing the cost of production, increasing production effectiveness; revolutionize the face of products and services in order to enhance the competitive advantage of an organization. This report presents an analysis of strategy information systems, its basic system, and business requirements, and how Disk4U can analyze their needs, select an appropriate software to integrate with its business strategies to meets their demands, and gain a competitive advantage over its competitors.
Gartner and Porter, (2016) used the concept of value management to evaluate the kind of value each process can add to the products and services of an organization. Moreover, Hemmartfar et al., (2010) believes that product and services of an organization determine the primary objectives of an organization. In addition to this, Gartner and Porter (2016) stated that the major problem that companies face in the current business environment is to maintain their competitive advantage. Nonetheless, according to Turban et al., (2009) implementation of an information system is a complex task because the complex nature of the information systems. Moreover, the main purpose of strategic information systems is to establish a sustainable and profitable position in the market and create an opposing force to the forces that determine the competition of the market. Hemmatfar et al., (2010) asserts that information systems should allow a company enhance its competitive differentiation coupled with cost leadership that gives a company sustainable competitive advantage. Moreover, Pearlson and Saunders (2010) argue that information systems must possess the ability of a strategic weapon that can enable a company gain competitive advantage, come up with new ways of management, enhance performance and productivity, and diversify their goods and services. This implies that the use of information systems in managerial and strategic activities is of importance than use in operational contexts.
Having mention that is important to point out the effects of improper use of information systems within an organization. Moreover, it is important to understand the different aspects of the organization before adopting an information system. In this regard, the Information System Strategy Triangle (ISST) framework is essential in understanding the dynamics of information systems within an organization and how they can be aligned to concur with the objectives and practices of the organization. This is because the ISST framework outlines the relationship between the business strategies and the information system strategies within an organization. Ideally, an organization strategy and information system strategy are driven by the strategies of the business. Moreover, these strategies have a mutual relationship and they must concur in their operations for maximum sustainability. However, it is important to note that failure to understand the relationship between the three strategies can have detrimental effects on the business. This is because any change in the business strategy can have a negative effect on information system strategy. According to Hemmatfar et al., (2010) information systems play a vital role in financial and non-financial issues and in business operations aspects like decision making within an organization. Thus, the managers are required to make decisions with an integration of the information system and organizational decision by considering the capabilities of resources within an organization.
Disk4U is a company that sells CDs and Vinyl records and is based in Sydney. The company operates in four small outlets in the Sydney metropolis. Moreover, the company sells its products through via physical front shop, mail, phone orders, and a recently opened online channel. In addition to this, the company relies on manual accounting since it started. However, with the recent expansion in business activities the company must automate its accounting system for maximum efficiency. Moreover, automation can help the company achieve its full potential and increase its market share through efficient process and customer services.
Disk4U Company is a distribution company that deals with distribution of CDs and Vinyl records. Thus, the company has different stages of administration and information that is available at these stages. In the accounting section, the business has the requirements for the directors, managers, and the cashiers in contact with the clients. Moreover, an automated system will require different levels of access within the system of the company. In addition to this, there is need to reduces the number of process involved in cash handling. Having mention that is important to point out that the company has four different stores that are managed at one central place. Thus, it is important to select an accounting software that can incorporate the financial records of the four different stores to increase efficiency.
Strategic information systems offer a variety of services to business, as discussed above these services entails gaining competitive advantage, and revolutionizing the production of goods and services within an organization among other factors. However, it is important to select an information system that meets the demands of the business and can integrate easily into the business strategies. Thus, it is important for a business to assess its process and ascertain the right type of information system that can meet and revolutionize the demands of the organization. According to Worden, (2016) the selection and evaluation phase is an important process that can enable an organization to achieve long-term efficiency. Thus, the first phase of selecting an information system for Disk4U Company is assessing the business process of the company.
In this phase, the company determines which process within the company are working well and which ones are not working as per their expectations. Moreover, at this phase the company ascertain which process are working well and those that require improvements. The business process can be analysed using the following questions;
Ideally, these questions can be answered using a SWOT analysis of the company. This can help identify the weakness and strength of the company and help identify the proper information systems. Moreover, this can help an organization realize the benefits and importance of fitting an information system versus the return on investment. Nonetheless, the analysis can help an organization ascertain the benefits if improving employee efficiency versus fitting a new information system and can help the organization choose an appropriate information system.
In addition, these questions can help in creating a needs analysis from different departments of the company. The company can achieve this through assigning the managers of different departments and stores to analysis the stores and departments and outline what their departments and stores need starting from invoice preparation to operations of the inventory Laudon and laudon (2012). After analysis, the managers should classify the tasks according to importance. After separation, the managers can develop flow charts of how the process and tasks are performed, this should include decision-making protocols. Moreover, during the analysis the managers can collect samples of every report and forms generated by the current system. From these forms, process, and samples the company can be able to ascertain the business requirements from an accounting software, which can make it easy for the company to decide the software that meets their demands.
Integration of an online platform has diversified the business needs of Disk4U rendering the manual process outdated since it cannot meet the business requirements of the company. Moreover, the online platform expands the business requirements of the company such that the company needs to shift from manual process to automatic process. The business needs an integrated financial system that can integrate both the online and physical location operations. In addition to this, the company needs a system that can help it manage the four stores located in different locations within Sydney metropolitan. Nonetheless, the business needs a system that can manage its business transactions on a daily basis. The business needs a system that can revolutionize its processes and products offered to the customers to gain a competitive advantage over its competitors.
In addition, the business needs a system that can generate business reports with ease and efficiency. Moreover, the business needs a system that can reduce inventory errors and make inventory control efficient. Nonetheless, the information system should be able enhance customer service through making the goods and services from the company easily accessible. The manual system of inventory and sales control presents a lot of data entry sales that can cause the company to loss revenues through human errors. Thus, the business needs an information system that can facilitate correct information is presented to the managers in order to aid in decision making with regard to the strength of the company.
A strategic information system should be efficient, reliable, and maintainable. According to Ahmadpour et al., (2011) the main functions of a strategic information system are gathering, analysing, and maintenance of data regarding the intelligence of the competitors, internal resources of a company, customers, suppliers and other relevant organizations involved with the company. In addition to this, there are different types of systems that can company can integrate into its business strategies. These include operational level, management level systems, knowledge level systems, and strategic level systems. However, the focus of this report is on strategic level information systems. The strategic level system can help the managers to deal with strategic issues that can contribute to the success of the company. The strategic level system incorporates features like budget forecasting, personnel planning, sales trends forecasting, and operation plan.
It is evident Disk4U needs a software to make their operations and services more efficient. This can be attributed to the fact that the manual system is obsolete considering the transactions of the online platform. However, it is important to understand the needs of the company before settling for a certain software. As discussed above, Dosk4U is in need of a software that can control its accounting and financial data generated on a daily basis. Moreover, Disk4u is in need of a system that can manage its inventories in order to enhance customer experience thus, enhancing customer satisfaction that can lead to the growth of the company. However, there exist different accounting software created for different needs and thus, the company must first identify the category it falls in to select a software that can facilitate future success and efficiency. Companies fall in four broad categories according to revenue they generate. These categories include;
Moreover, Randolph, (2013) further states that is a company operates a complex business it can choose a software that is that is one-step ahead, in that, a company in the SMB stage can opt to use a software designed for SMEs. Similarly, Randolph further states that if a company operates a simple business, it can opt for a lower category product. A lower category software has fewer features, which can save money for the company. However, it is important to note that a lower category software has fewer features that can force the company to employ other applications such as Access and Excel to perform some accounting tasks. These fill-in resources can be expensive in the long hence causing the company to spend more making it expensive in the end. Having mention that is important to point out that Disk4U falls in the first category since it has only four stores and its employees are roughly less than 20. Thus, the company should go for a software in the entry level. Software for the entry level include Sage 300c and 50c, Microsoft Dynamics , Intacct, NetSuite to mention just a few (Softwareadvice.com, 2016).
Sage 300c has the ability to manage business whether in one location or indifferent countries. Moreover, sage 300c has the ability to manage operations, finances, and inventories in multiple currencies and languages. Sage 300c provides real time updates, mobile access, and visibility in the entire company (Sage.com, 2016). In addition to this, sage 300 has the ability down the operations of the company according to departments, which improve collaboration and increase transparency. Moreover, sage 300c provide real time updates of the operations and finances of the company, reduce redundancies and inefficiencies that optimize the productivity and performance of the company, give access to manager anytime and anywhere, and can integrate the process of front-to-back offices like marketing, customer services, and sales which increase efficiency and increase productivity in the company (Sage.com, 2016). On the other hand, sage 50c simplify complex accounting process. This include saving time by automating manual process thus, enabling the managers and accountants to do a lot of work in less time. In addition to this, sage 50c increases the accuracy of information since it reduces chance of error. Moreover, sage 50c offers instant analysis and reporting, which simplifies decision-making process. Sage 50c offers instant saving, retrieving, and organizing of financial data.
There are many software vendors in the business world, as mentioned above; they include sage, Microsoft dynamics, Intacct, among others. Among these software sage provides the best services ad dynamics to many environments. According to Comparebusinessproducts.com, (2016) sage offers the best business software with diverse accounting abilities and applications. In addition to this, sage is one the software vendors with pride of providing solutions that address specific industries and companies. However, it is important to note that its extensive products are somewhat confusing and intimidating (Comparebusinessproducts.com, 2016). Nonetheless, sage applications are designed for small and medium sized enterprises and their prices range from $2000 to $100,000. Furthermore, sage software is designed to accommodate any business in any location couple with its friendly prices, which makes it the preferred software for Disk4U Company.
According to Newell and Marabelli, (2015) implementing strategic information systems can be a complex task due to the complex nature of information systems. In addition to this, many other studies concur with the sentiments of Newell and Marabelli and point out that despite several positive result of information systems studies have failed to identify the difficulties during implementation of complex information systems. Moreover, studies by Sosa and Kemerer (2011) and Sosa (2009) show that upgrading and maintaining installed information systems is costly. Ideally, companies are forced to upgrade their systems when their competitors upgrade their systems or buy new ones. In this regard, companies are forced to carry out regular updates to meet the growing demand of the business environment.
Conclusion
From the above discussion is evident that strategic information systems are an important aspect of any business in the current business environment. In addition to this, information systems are the driving force of change and revolution in businesses. This is because information systems enable competitiveness in the modern business world. Moreover, the concept of information systems is crucial since it can be used for differentiation, cost leadership, reduce cost, and acquire competitive intelligence. Thus, it is important for Disk4U Company to adopt a strategic information system in order to revolutionize its operations and services. In addition to this, information systems can enable a company achieve competitive advantage over its competitors. Ideally, it is important for managers to have a deeper understanding of information systems in order to facilitate smooth integration of strategic information systems to business strategies. In addition, information systems should not focused on individual aspects of business management but on the general aspect of business management. Moreover, from the discussed literature it is evident Disk4U can use information systems to revolutionize its operation and make their process efficient in order to increase productivity.
References
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