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LONDON SCHOOL OF COMMERCE

Identifying and enhancing competitive strategies through information systems

2014

MD SABUZ MIAH

Table of Contents
Abstract Introduction Roles of Information System Key Issues for IS implementation Information System at Heinz Conclusion References 2 2 5 8 21 22 22

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Abstract In this paper author approaches a new fundamental building blocks of information system implementation for HEINZ .Researcher tries to dig out organisational contexts of HEINZ and relates this to information system research on implementation. This method of implementation is a little bit organisational rather than technical. Researcher argues that the existing approach is useful and relevant but it needs a few modifications which will tackle parts of the problem. Professor Peter Checkland and Sue Holwell (1988) argue that Information System literature is a bit of confusion with many contradictory positions and approaches adopted. They also added that there is negligence about the approach of IS based on views of concept of organisation. Researcher tried to pave the way to make a relation with the IS with organisational harmony.

Introduction There is considerable pressure on most organisations to make their operational, tactical and strategic process more efficient and effective due to the growth of global competitive environment. To gain better information for decision making organisation has chosen a group of components which can increase competiveness known as Information System (IS) (Spalding, 1998). IS are playing a vital role to collaborate e business, e commerce, management and operation for the strategic success of the business (Hevner et al., 2004)

Ein-Dor and Segev (1978) states that Information System is applied to improve management by directors of organisation, it is known as management information systems (MIS). MIS is a collection of manpowers, tools, procedures and software to perform various business tasks at various levels in the organisation (Tripathi, 2011). Information System is important to assure the profitability of the organisation by gaining competitive advantage (Beaumaster, 199)

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About Heinz Heinz ketchup is the worlds favourite. The ketchup is the only thing Heinz does uncommonly well because no other company on earth with a reputation of quality, great taste and nutrition. Heinz is providing superior nutritious food among the people of the world. Heinz provides quality food for families of 200 countries around the world of which 50 countries they are number one or two in market position. Heinz is sailing more than 65o million bottles of ketchup every year. For millions of families if it isnt Heinz, it is not ketchup. Change is inherent in todays rapidly developing business culture, change occurs continuously either random or planned(Regan & OConnor,2002).Introducin g an information system change is just as much about helping to adapt the end users behaviour as it is the improving the information processing system itself. Information system is the system to communicate with people (Kroenke, 2007; Davies, 2009). On top of that Gurbaxani and Whang (1991) states that the role of information system in an organisation is to increase efficiency of operation, to provide decision support, to process business and transaction, to to maintain employee

documentation

and

communication

channel

evaluate

performance.The main five components of Information System is hardware, software, people, procedures and data.

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Fig: Components of IS

Davies (2009) defines key stages of information system implementation process which is similar with OBrien (2004) who described information system s development cycles as a five step process which are1. Investigation 2. Analysis 3. Design 4. Implementation
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5. maintenance

Fig: IS implementation process

Roles of Information System

Cost Leadership : Information system is used to save the cost of doing business or to reduce the cost of business processes or to lower the cost of customer and supplier.(Booth, Robert and Sikes 2011)
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Differentiation: To develop differentiate features or to reduce the differentiate advantages of competitor Information System is used. By adding online live chatting services or social networking sites or free chat services can give an extra advantage or differentiate the service of an organisation. Innovation: Information system is used to identify and create new product and services as well as to develop new or niche markets and can radically change business process by automation (Chui and Flemming, 2011). With the help of internet and communication better innovation can be achieved. Those parts uses to develop network are very expensive and can be used as a single compartment to get benefit for organisation, supplier and customer. By the help of IS it is very easy to create new customers, external partners and internal people. Growth: Information system can be used to extend business globally because it eases the controlling power over business by sitting in one place. Alliance: Strategic alliance can be created end enhance relationship with the help of IS.

Heinz is operating in a very competitive food industry and competing with other companies who can change the market share. Any relationship change with consumer or change in price of the product, or sales volume may have an impact on financial output. It might happen because of the ability of competitors resources to change the competitive environment. Retailers do have their own cheap brand which is also a source of competition for certain product lines. These types of competition may cause to reduce the price of the product or can increase capital, marketing and other expenditures which in terms might result in the loss of category share. Such types of change have got an impact on organisations net income. If this consolidation continues the large r retailer may ask the product at a cheaper price with promotional offers all the year round. If the company is unable to use its expertise on marketing, product innovation, leadership positioning to respond to those changes or unable to increase its price profitability and volume of growth can be impacted largely in the adverse way.Business success depends on the financial strength of supplier and customers. Their financial condition can be affected by conditions and events which is beyond control.
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The economic and political condition of USA with other countries has an impact on companys performance. Changes in law and regulation, employee legislation, food and drug laws, accounting standards, taxation requirement and environment law can hamper the performance also. Other countries where Heinz do business may have export import restriction, currency devaluation, recession, [political unrest, terrorist activities can impact on business. Heinz is highly dependable on raw material like tomatoes, cucumber, other fruits and vegetables, other materials as input and water. The availability of these products may fluctuate widely for natural disaster, pest infestation, and increased demand for biofuel or unseen circumstances. Damage or disruption to manufacturing or distribution capabilities due to weather, terrorism, pandemic could impair to sell the product. Success of the company could be impacted by the inability to introduce new product with innovation, implementing cost cutting measures, supply chain efficiency, information technology and system on a global basis and growing market share and volume. Failure to implement plans within allocated time and cost could materially adversely affect the companys ability to increase net income. Heinz is progressively reliant on information systems to accomplish and maintenance a variety of business processes and activities and any substantial breakdown, invasion, destruction or disruption of these systems could adversely influence operations. In addition there is a risk of professional interruption and reputational damage from leakage of confidential information. The incongruous use of certain media vehicles could cause brand damage or information leakage. Negative posts or comments about the organisation on any social networking websites could seriously damage its reputation. On top of that the disclosure of nonpublic company sensitive information through external media channel could lead to information loss. Any business interruption or damage to the organisations reputation could negatively impact the organisations financial condition, results of operation and the stock market price.

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Fig: A simplified version of IS implementation

Key Issues for IS implementation

Category Project Definition/Mission

Key Factors

Sources Pinto (1998);

-Information system helps Somers & Nelson (2001); to direct and clarify the Milis & Mercken (2002); goals of the subject. Nah et al. (2001);

- Definition of the project Motwani et al. (2005) entity is discussed How this project is

related with the business

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is clearly spread among the employees. - What are the aims of this project and what benefits could be gained through this is properly identified and traceable.

Project Schedule/Plan

-Detail each

specification and

of Pinto (1998);

every Milis & Mercken (2002

employees action plan is distributed so that

everyone can be aware about their dos and donts.

Project Team

- The project should be Milis & Mercken (2002); run by a very experienced Somers & Nelson (2001); and competent manager. Nah et al. (2001);

-Team members of the Motwani et al. (2005); project should be chosen Gargeya & Brady (2005) with complementary skills and the very of refined the

employee organisation. Every

project

member

should be accomplish with their responsibility,

authority and reward after completion of the project.

- There should be a blend of consultant and internal employee for the project.

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- Project team should have proper knowledge about the business functions. - project team should be re-located in such a place from every where one each can and work

together with harmony to help and support each other to gain a common goal.

Management Involvement & Support

Support

from

top Tan (1996); Pinto (1998);

management.

- there should be an Somers & Nelson (2001); alignment with strategic Nah et al. (2001); Motwani et al. (2005); should be Gargeya & Brady (2005)

business goals - the project

identified with top priority -employees should be

communicate about role vision, advance implementation project Should documented be well and Successful of the of new system, in

importance

advertised so that next time it can be followed as

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a model.

Project management

-To

drive

in

project Nah et al. (2001);

management responsibility Motwani et al. (2005) should be distributed

among project members. -Department resource involved coordination disciplinary actions. Project management for should for human be

training and

should be in excellence of its level.

Client consultation

-To

implement

and Pinto (1998);

facilitate

Information Somers & Nelson (2001);

system consultant should Gargeya & Brady (2005) be recruited.

Technical tasks

At the beginning of the Tan (1996); project testing of and Pinto (1998); the Nah et al. (2001)

troubleshooting

developed software should be done. - To troubleshoot errors is very critical and the mid of project, so to resolve any issues (which might rise) should vendors. work well with

Monitoring and feedback

-At each stage in the Pinto (1998);

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process of implementation Nah et al. (2001); information controlled comprehensively. -project target and should be Motwani et al. (2005); Gargeya & Brady (2005)

milestone should be set up early and the progress should be monitored

accordingly to that.

- Sufficient testing and benchmarking should be done as well.

Vendor/Customer partnerships

Relationship parties

with

third Somers & Nelson, (2001); be Milis & Mercken (2002)

should

improved and managed efficiently.

Change Management

Organisation culture plays Nah et al. (2001); a vital role during Somers & Nelson (2001); system Milis & Mercken (2002); so any Motwani et al. (2005); or Gargeya & Brady (2005); be

information implementation change structure managed -During of

culture should

designing

and

implementing the IS end users should be involved. training for the user

should be highlighted -project worker should get commitment from the top

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management - Any types of change regarding should be communicated - The system should be competent and apprehend by managers and the project

employees

Table: Summary of Key Issues for Implementation Success (source: constructed by the author, 2014)

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Figure: It illustrates the interrelationships in a customer-focused business. Intranets, extranets, e-commerce Web sites, and Web-enabled internal business processes form the invisible IS platform
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Figure: The value chain of Heinz, an example of the variety of strategic information systems that can be applied to Heinzs basic business processes for competitive advantage.

The above figure provides illustrations of how and where details technological innovation can be applied to basic company procedures using the value sequence structure. For example, the figure demonstrates that combined workflow intranets can increase the communications and cooperation required to enhance management harmonisation and support services considerably. An intranet for member of staff can help the human resources management to work with them easily, self-service access to their benefits information. Extranets allow a company and its international associates to use the Web to design products and procedures together. Lastly, ecommerce Web sites can dramatically enhance purchasing of sources by offering on the internet market segments for a company's supplier. The value sequence design in Determine 2.8 also recognizes illustrations of ideal applications of computer products to primary company procedures. These include automated just-in-time warehousing techniques to back up incoming logistic processes that include stock
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storage space, computer-aided versatile production techniques, as well as on the internet point-of-sale and order handling techniques to enhance the outgoing logistics processes that manage client purchases. Information system can also assist marketing and sales procedures by creating an engaging focused promotion capability on the Internet and the Web. Lastly, a synchronized and incorporated client relationship management system can considerably enhance client assistance .Thus, the value sequence idea can help to recognize where and how to apply the strategic abilities of information system innovation. It reveals how various types of information system might be used to help Heinz to gain competitive benefits in the marketplace. The examples of information technologies have support reengineering the order management processes at Heinz.

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Information System can help Heinz to be an agile competitor with the help of customers and business partners

Type of Agility Customers

Description

Role of IS system for

Ability to co-opt customers Information in the exploitation of innovation opportunities building and enhancing customer

virtual

As sources of innovation communities for product ideas As co-creators design, of testing feedback, and

innovation As users in testing ideas or helping other users learn about the idea Partnering Ability to leverage assets, Information knowledge, and competencies facilitating of Inter-firm such contract as collaborative platforms and portals, supply chain collaboration, System

suppliers, distributors, manufacturers,

and logistics providers in systems the exploration exploitation of innovation opportunities Operational Ability to accomplish Information System for and

speed, accuracy,

modularization

and cost economy in the and integration of exploitation of innovation opportunities business processes

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SOURCE: Adapted from V. Sambamurthy, Anandhi Bhaharadwaj, and Varun Grover, Shaping Agility through Digital Options: Reconceptualizing the Role of Information Technology in Contemporary Firms, MIS Quarterly, June 2003, p. 246

Innovation at HEINZ Heinz is always coming up with new innovative products. Heinz is using Information system for product innovation. Heinz is always blending old fashioned product excellence with unparalleled modern day innovation. Heinz has set up global quality and innovation centre where they do research for new varieties of the brand. There is a feedback centre inside that where they connect with consumers in person and get consumers valuable suggestions. The simulated retail environment helps them to enhance their prowess and observe consumer behaviour. Search and development team around the globe are famous for product and packaging innovation. Heinz is listening to consumers and responding with fresh new ideas to deliver. They have partnered with coca cola to get the PET bottle for their ketchup. They have invented new Heinz Dip and Squeeze product which allows customer more ketchup where it wanted and when it wanted with less mess.

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A summary of how information technology can be used to implement five basic competitive strategies is given below.

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Challenges for Information System

Order processing Order rerouting Based on availability and capacity rerouting orders to other location Order Tracking If each and every order taken by different channels is not visible impact companys ability to service their customers. Order Status To meet and manage customers expectations effectively appropriate type and frequency of status update is important. Stock To minimize and manage stock out and rapidly respond when the happen. Order Shipment To accommodate a customer who wants their order to be shipped in different location is very difficult if the system does not allow. Order Picking Inventory Tracking To assume exact inventory is difficult if product is stocked in different locations. System should automatically locate stocks in different places and show them together with their location. Handheld device Handheld device should work in disconnected mode as well. Pick modification Delivery Labour management Warehouse employee, managers and drivers should be capable of managing schedule on the basis of demand. User Interface A common user Interface should be used for management ,suppliers and customers Labelling Labelling of address and packaging should be masked in such a way that it will appear like they came from retailer. Integrated solution Bundled transport management solution should available Modification should be allowed during picking an order.

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which include software and hardware. Returns Location returns Capabilities to process returns on customers place is needed when returns can be made by delivery drivers due to damage, missing or customer rejection. Infrastructure Hierarchy Hierarchy should be positioned according to the need or nature of business and situation. Accountability should be focused for decision taken. Bandwidth The speed of internet (bandwidth) should be very high so that during peak time the system will not slow down its process.

Information System at Heinz

Company websites Operations

Company websites can be browsed from any platform i,e windows or mac or any laptop, mobile, tablet and handheld devices. Enables to order online, talk with customer service department if any problem arises, cross channel returns and coordination with supplier, buyer and investor

Order management

Regardless of channel orders can be visible with their delivery process and improvement globally.

Synchronisation of Enables management to view and manage inventory in different inventory location, production unit, warehouse and just in time.

Visibility of supply Internal and external supply chain is monitored and triggers any chain Product innovation exception recovery measures when needed New product innovation is helped to compete with competitor and to get competitive advantage. Management Hierarchy suggestion always inspired employees and for any innovative culture

regarding

product

organisational

improvisation.
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Integration

B2B, B2C and enterprise application integration to process critical business information.

Conclusion In this assignment the significant element of information systems, recognising competitive advantages and augmenting competitive strategies through information systems was discussed. Organisations can relate tools such as Porters five forces and value chain to evaluate their competitive position, inspect their competitive advantages, and recognise appropriate competitive strategies. Information systems can play a very important role in the success of organisations competitive strategies. However competitive strategies alone cannot create magic. In order to meet the ISs unmet potential, both IS and non-IS executive need to work hard to have better understanding each others areas (Roberts & Sikes 2008). The transparency in the planning and execution of information systems projects should be visible to business leaders. Accountability of information systems projects should be applied to both information systems and business parts in the organisation.

References

Books Laudon, K.C. & Laudon, J.P. 2012, Management information systems: Managing the digital firm, 12 th edition, Prentice Hall. OBrien, J. A. & Marakas, G. M.2011, Management Information Systems, 10th Edition, McGraw-Hill, New York, USA. Pearlson, K. E. & Saunders, C. S. 2010, Managing and Using Information Systems: A Strategic Approach, Fourth Edition, John Wiley & Sons, USA

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Baltzan, p. & Phillips, A. 2010, Business Driven Technology, 4th edn, McGraw-Hill Irwin, Boston,USA.

Journals

Alexy, O. & Reitzig, M. 2012, Managing the business risks of open innovation, McKinsey Quarterly,January 2012, pp. 15. Booth, A., Roberts, R. & Sikes, J. 2011, How strong is your IT strategy?, McKinsey on Business Technology, Number 23, Summer 2011, pp. 27. Bughin, J., Chui, M. & Johnson, B. 2012, The next step in open innovation, McKinsey Quarterly,June 2008, pp. 18. V. Sambamurthy, Anandhi Bhaharadwaj, and Varun Grover, Shaping Agility through Digital Options: Reconceptualizing the Role of Information Technology in Contemporary Firms, MIS Quarterly, June 2003, p. 246 Websites www.heinz.com

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