Category: Management Information Systems

ABC Products and services definition

ABC, Inc. is a worldwide wholesale establishment, which deals in numerous chains of large discount departmental stores along with depository stores. Specifically, the corporation specialises in apparel, footwear specialty, cash and carry, warehouse clubs as well as discount stores and hypermarkets.

Besides, the establishment has expanded its product range including all manner of fashionable products, accessories, garments, ornaments and bouquet. Further, the firm has not only expanded in terms of product range but also in geographical coverage. Currently, the firm boasts of over 300 stores worldwide.

The business focus according to porter’s generic strategies

In order to participate successfully and gain competitive edge as well as outperform rivals in the market, ABC follows a number of tactics aimed at developing expertise, knowledge in addition to capabilities. Specifically, the corporation utilises cost-leadership, differentiation as well as focus cost-leadership strategies.

Cost-leadership

ABC utilises low-cost strategy to increase its client base. Actually, through the cost-leadership strategy, the firm is capable of serving as well as meeting the needs of clients residing in rural neighborhoods. In principle, other retailers often focus on urban clients ignoring the rural clientele. As such, ABC Inc. has developed low-cost management technology that is of great significance in its operations.

In this regard, the advancement of low-cost materials management is invaluable in enabling the establishment to procure, allocate and trade merchandise at lower prices compared to its rivals (Gamble and Strickland 57). In reality, the low-cost competence of ABC enables the wholesale store to attract customers from other competing firms thereby increasing proceeds.

Differentiation strategy

Actually, a number of retail stores majorly focus on wealthy clients who consider quality as core to their purchasing decisions. Conversely, ABC pursues a differentiation strategy that entails designing and offering products that meet the specifications of different consumers.

Based on the strategy, the firm provides designer clothes that are expensive, distinctive appliances as well as highly personalised services for the wealthy clients (Miller 38). On the other hand, ABC pursues the differentiation tactic to meet the requirements of clients through offering low-cost products.

Focus cost-leadership

The focus cost-leadership strategy is applied by ABC Company to increase its presence and compete effectively in the mass market. The major aim of the strategy is to increase the firm’s online stores as well as physical stores.

Increasing the presence of the firm’s products to specific segments of clients provides the customers with seamless shopping experience in the business’s physical and online stores (Porter 36). The online stores are designed to be accessed by the customers through mobile devices.

In essence, the business stores are capable of selling products locally to the esteemed customers. The strategy has increased the firm’s market share through increased customer base. In addition, the strategy has increased the business’s performance particularly in terms of increased sales.

Divisions in ABC Company

The main divisions in ABC Company include marketing, store operations and human relations along with information management systems. To begin with, the store operations division is responsible for sales, management, teller operations along with receiving and prevention of losses. Second, the marketing department ensures public relations, visual displays and promotion of the firm’s products.

Third, the merchandising division is responsible for planning, buying and controlling the organisation’s stock. Forth, the selection, recruitment, training and development of personnel are the obligations of human relations department.

Lastly, the firm’s information management systems department is responsible for redesigning the firm’s structure in order to support decision-making, alliance and leadership abilities of the organisation when the store experiences growth prospects.

The extent to which Management Information Systems (MIS) division generates business intelligence and achieves competitive advantage

The designs and machineries that transmute raw data within organisations into expedient gen are significant for business operations. In this regard, management information systems division enables firms to handle voluminous data that are capable of ascertaining, developing and generating prospects for businesses.

Actually, management information system is significant in augmenting as well as refining the firm’s response towards the competitors’ actions. In other words, MIS provides apposite and quick reactions to competition through the analysis and collation of relevant information significant to the operations of firms.

Besides, through the MIS segment, the firm is capable of improving its operational efficiency and flexibility by trimming down bureaucracy within the establishment thereby incurring reduced costs in operations. Moreover, MIS augments the levels of planning that leads to increased efficiency (Porter 58).

Porter’s value chain analysis and porter’s five forces

Value chain analysis

ABC’s inbound and outbound logistic management, which are the firm’s primary activities entail fast and receptive delivery structure. The firm has a well-developed distribution channels that makes the transportation of the products to delivery centers be within the shortest time.

Besides, the firm’s private operations handbook is significant in ensuring that the organisation’s personnel adhere to codes of conduct. Based on the firm’s operations, the stores as well as the warehouse membership clubs augment the corporation’s proceeds (Wright 96).

Besides, ABC’s low-cost strategy forms the core of sales and marketing approaches. Regarding support activities, ABC’s procurement is anchored on the reduction of purchase costs to provide clients with low-priced goods.

Moreover, the corporation utilises numerous refined expertise including bar code, computer systems and RFID technologies that aid in securing an unswerving stream of ABC’s merchandise. ABC utilises superior Information Communication Technology (ICT) systems including massive parallel processors that track the movement of the firm’s products in the delivery warehouses.

Porter’s five forces

Threat of new entry

Due to the exceptional trademark, delivery systems and locations as well as robust financial capital, ABC has the capability of discouraging rivals with intentions of entering the industry. Additionally, the outlays involved in erecting wholesale business such as ABC makes entry in the industry uninviting (Irwin 178).

Threat of substitutes

ABC offers convenience as well as low prices to its customers. In this regard, the industry in which ABC operates has higher threat of substitutes because other retail stores offer low prices on products.

Bargaining power of buyers

In the retail industry, buyers greatly determine the type of products and services to be offered. As such, buyers have greater degree of control in the industry. Besides, ABC has to provide quality products that meet the consumers’ requirements.

Bargaining power of suppliers

Companies within the retail chain trade control higher proportion of the market. As a result, ABC engages large number of suppliers. The control of larger segments of the market gives power to the firm since ABC can create scarce strategies to the suppliers by switching to other potential manufactures and wholesalers effortlessly and cheaply (Wernerfelt 175). In principle, the suppliers in the retail industry enjoy low bargaining power.

Competitive rivalry in the industry

Companies operating in retail industry are very aggressive. However, due to the market leadership capabilities of ABC, the establishment of its operations is uncomplicated. In other words, the firm utilises its technological advancements as well as financial strengths that offer increased competitive edge over rival firms. As such, the industry experiences high competition.

XYZ products definition and the business focus in terms porters three generic strategies

XYZ is one of the national Islamic banks in UAE and is fully owned by the government. XYZ offers various products to over 1.5 million esteemed clients across UAE. The bank’s main services include Islamic personal loans, corporate loans and investment advisory ventures.

In addition, the bank offers treasury and wholesale banking products. In fact, retail and wholesale services account for over ninety-seven percent while corporate services and products contribute over three percent. The bank is also one of the managing trustees of Equity Fund, which is the largest in UAE.

Close association with Shariah principle characterises Islamic banking operations. In other words, financial products and services provided by the Islamic banks are based on Shariah principles. The financial pillars include the asset backing principle, the loss and profit sharing principle, ban on certain financing economic sectors, ban on speculation, uncertainty and interest.

The associations of the firm’s products with the Islamic principles allow the firm to offer products at low prices compared with commercial banks. In fact, the cost-leadership strategy is achieved through evasion of any form of interest owing to the fact that interest is a prohibition in Islam.

In fact, XYZ reduces its costs through discount of overheads related to interest via creating profit and loss allotment banking system (Chan and Wong 570). Such a system is expected to allow XYZ share any accruing risks with the esteemed customers.

The low-cost strategies differentiate XYZ products particularly from the competing Islamic banks within the market. Besides, the differentiation and low-cost strategies have enabled the firm to operate favourably within the market segment. In other words, the firm has maintained its services delivery within the target market.

The firm’s main division

XYZ is divided in various departments that are coordinated through well-developed systems. However, the main divisions of the bank include promotion and development, management information systems, policy, Shariah and market analysis as well as research and development.

Business support unit utilises the management information system division to coordinate all the departments. Essentially, the management information system is critical in the information processing used to coordinate all the departments.

The management information system consists of processes that determine the nature of the bank’s capabilities towards service delivery to its customers. The most important function of the information system is the linkage the firm creates with the customers.

In fact, the processes are usually a combination of software that provides all customer interactions over the internet, linking people and providing exceptional handling of the situations that create customer relationship with the bank (Chan and Wong 577).

Value chain analysis of XYZ

The operations of XYZ are anchored on the provision of quality banking services to clients using sophisticated expertise. Specifically, the firm utilises modern expertise to save on outlays involved in logistics and inventory management.

Besides, the organisation also applies wire devices that are capable of loading large amounts of significant data. Moreover, XYZ has undertaken advancement of its e-business organisation. For instance, the firm has embarked on utilising eServer and z900 mainframes as well as Enterprise Storage Servers (ESS) that have been invaluable in data handling, resolution along with debit and credit communications.

Porter’s five forces analysis of the firm

Competitive rivalry

Like most firms in the industry, XYZ is influenced by the power of suppliers, threat of new entrants, and threat of substitutes, buyer’s power and the competitive rivalry. Competitive rivalry within the industry is very high and is determined by such factors including exit barriers, product differentiation, cost advantages and the brand identity.

Considering the exit barriers, the firm is well placed since various exit options are available. Besides, the firm has increased cost advantages given its decreased prices and reduced cost strategy. Moreover, the products and services of the firm are highly differentiated in order to increase the competitive advantage.

Given that most firms are offering the same prices, the rivalry within the industry is intense to the industry in which ABC operates (Murray 392). As such, firms have to differentiate their products and services and offer low prices in order to remain competitive.

Threat of substitutes

The changes made in the rival services and products can easily affect the low-cost strategy of the firm. In fact, the ability of XYZ to deal with cost constraints has increased its competitive advantage.

The threat of substitute products in the industry comes about due to possibility of price reduction strategies by the rival firms (Murray 394). Like the wholesale industry in which ABC is operating, the industry in which the XYZ is operating has increased threat of substitutes.

The bargaining power of buyers

The buyers’ bargaining power results from the capability of the buying process of the customers. Similar to retail industry, in the banking industry, buyers greatly determine the type of products and services to be offered. As such, buyers have greater degree of control in the industry.

Even though the firm targets specific clientele, the rival firms within the industry enable customers to have a greater say in terms of prices of products.

Bargaining power of suppliers

Even though the industry relies on suppliers for various materials critical in the operations, the suppliers have little influence on the determination of prices. The bargaining power of suppliers is low compared with other industries such as retail.

Threat of new entrants

Entering into the industry is difficult given the complexities in the operations of the firm and the specificities required in Islamic banking. Unlike conventional banks that few barriers to entry, Islamic banking have tight controls and religious regulatory framework that create increased barriers to entry (Murray 399). Just like retail stores such as ABC, XYZ have few competitors.

Recommendations

For ABC, the firm should continue to utilise product differentiation to remain competitive in the industry. In addition, the firm should apply technological prowess and its distribution network to increase its capabilities critical in augmenting competitive advantage.

On the other hand, XYZ should emphasise on the importance of technology in service delivery. Further, the firm should focus on cost reduction strategies, which form the core of its competitive edge in the industry. Generally, firms should focus on the capabilities and competencies that contribute to increased competitive advantage.

Works Cited

Chan, Rickey Yee-kyong and Yee H. Wong. “Bank Generic Strategies: Does Porter’s Theory Apply in an International Banking Center.” International Business Review, 8.5 (2009): 561–590. Print.

Gamble, Arthur and John Strickland. Crafting and Executing Strategy: The Quest for Competitive Advantage: Concepts and Cases. Boston: McGraw-Hill/Irwin, 2010. Print.

Irwin, Richard. “Strategic cost management: The value chain perspective.” Journal of Management Accounting Research, 37.16 (2003): 179-197. Print.

Miller, Danny. “The generic strategy trap.” Journal of Business Strategy 13.1 (2002):37-41. Print.

Murray, Alan. “A Contingency View of Porter’s “Generic Strategies.” Academy of Management Review, 13.4 (2008): 390-400. Print.

Porter, Michael E. Competitive Strategy: Techniques for Analyzing Industries and Competitors. New York: The Free Press, 2000. Print.

Wernerfelt, Birger. “A resource-based view of the firm.” Strategic Management Journal, 5.2 (2004): 171–180. Print.

Wright, Peter. “A refinement of Porter’s strategies.” Strategic Management Journal, 8.3 (2007): 93-101. Print.

Introduction

Management Information Systems (MIS)s refer to a combination of all the computer structures in an organization that facilitate business operations, strategic decisions and tactical approaches. These may include people who coordinate the systems, decision-making processes involved, technology used, and lastly the information encapsulated in the organization.

MISs usually start by external and internal data collection. The system then processes the information and places it in an information warehouse or a database. The organization then integrates this data into its system. It must continually update and work on the data. Thereafter, the company allows authorized members to access the information and then use it for the right purpose.

In order to fully comprehend MISs, it is necessary to first define information systems. A system is a collection of elements that focus on meeting a certain purpose. Systems may have intangibles and tangible items that work together to achieve a particular aim. In the IT context, information systems consist of the data collection process, insertions, storage, processing, distribution and use of information.

All the people and technology involved in performing these functions are converted. Therefore, when one introduces the term ‘management’ before Information Systems, then one must incorporate managerial functions. These are information systems that are designed to cover management roles.

They may include decision making processes, facilitation of interpersonal interactions and communication purposes. Some of the examples of MIS include supply chain management, project management, resource management applications, and decisions support systems.

How companies use Management Information Systems

The first and most vital way in which one can use MISs in one’s organization is to make strategic decisions. MISs can support strategic planning by providing all the relevant information and knowledge that is likely to affect a company in the future. MISs allows companies to forecast business trends or employ metrics in order to guide their decisions about the future. Executive Information Systems exist for this very purpose.

They are designed to summarize reports from various departments in the company and thus assist executes in making strategic decisions. A senior executive would easily identify the strengths and weaknesses in his organization and thus work towards improving it. Alternatively, the same organization may use the information in order to assess buying trends. This will facilitate the prediction of sales revenues in each market segment.

As such, the company can positively influence its returns by taking advantage of this invaluable knowledge. Companies can also discard those operations that do not contribute directly to their organizational goals, which would ensure that they remain target oriented.

MISs can be used to smoothen operations in a company by providing all the information needed to carry out routine operations at a central location. Not only is it easy to access information easily, but members of the organization need not waste time in creating separate databases for use in their daily operations. This also eases communication processes because all members of an organization have a central reference point.

MISs have the ability to eliminate bottlenecks in work processes. An example of an application that facilitates such a function is enterprise resource planning (ERP). ERP systems bring together all the vital business processes in one database. This means that a company can perform efficient management and control of its processes. Some of these may relate to distribution, human resources, or accounting.

Organizations can also use management information systems in order to create financial statements, accounting records or other types of documents in the company. Traditional methods of financial reporting were often inaccurate and lacked transparency. By using Management Information Systems to perform this function, then companies can ensure that their accounting records are in order.

An example of an MIS that facilitates this function is a Knowledge Management System. Here, a firm usually collects, organizes and disseminates information through this application. As such skills, documents and records can be easily handled.

Some businesses rely upon management information systems in order to understand their markets. Since the marketing segment is directly responsible for revenue streams, then this can be a vital part of the revenue collection process. It can also contribute to better financial performance.

Companies often do this through various strategies such as customer relationship management. In this function, a company manages its relationship with existing and potential clients before, during and after a sale.

Some organizations can use the information in their MISs in order to align the business practices with consumer feedbacks. Alternatively, they may apply that knowledge when targeting certain marketing activities. For instance, they would know which clients would respond well to their direct marketing efforts.

Lastly, some organizations use their MISs to manage people. A number of human resource applications exist for this purpose. So many of them relate to performance parameters displayed by staff workers or may deal with other aspects of human resource management such as training, promotions and salary management.

When information is properly organized, companies can easily and transparently handle human resource issues. This leads to greater employee loyalty and satisfaction among the employees.

An example of a company that uses MIS and how it uses it

The company chosen for analysis is Angkor Mikroheranhvatho Kampuchea (AMK). This is a microfinance institution based in Cambodia. Its mission is to assist poor members of society to access microfinance services in order to improve their livelihoods (AMK 3). AMK is headquartered in Phnom Penh, Cambodia and has about 250, 000 active borrowers.

The organization mostly focuses on the rural communities in its undertakings. Some of the services that clients can receive from the organization include loans, fund transfers, savings and investment services. In the latter segment, the company can offer equity and guarantees for those interested in making investments with the organization.

A microfinance institution was chosen for this analysis because the industry has received renewed attention in the information systems sector. Stakeholders in the microfinance industry have realized that the significance of managing their information effectively.

These institutions have very large amounts of data and they need to process them in order to utilize them in various ways; as such, the company must have an effective way of managing this information using various ways.

AMK places information at the centre of its business processes. Some if it may be raw data such as client information, i.e. their names, occupation, ID number and basic accounting information. On the other hand, the company also requires information about a certain portfolio that they have.

This may involve detailed statistical or analytical work. The company focuses on making all information relevant and easily useable to its members (Microfinance Information Exchange 12).

Prior to the adoption of management information systems, AMK needed to have an MIS department that would facilitate the success of such a venture. When formulating this department, the organization first considered the level of technological expertise that members of that group possessed.

Individuals in this department needed to have knowledge about software development as well as computer systems so as to lead the rest of the organization in adoption of the same. Additionally, the organization ensured that some members of the team had prior experience with MIS in other microfinance institutions.

It was not enough to be an expert in information systems; one needed to have a strong background in other fields of finance such as accounting. On top of the above requirements, the MIS department needed to have an expert n the organization itself. Therefore, someone from another area of the company was represented in the department.

The existence of an MIS department is not the only recipe for success in this company. The organization often makes sure that it reviews any new system packages that the MIS team recommends.

Usually, before a package is introduced, the technical staff members need to discuss with their bosses how the new package will help the company, in vast details. Loan officers and tellers must also give their input concerning the new MIS package before it can be adopted (Pant & Hsu 99).

In operationalizing its MIS, the company first starts with the documentation process. At this point, it will take up all the reports, handbooks operations schedules and computer screens that are relevant to AMK’s goals. Thereafter, the firm then looks at the database information that exists. Here, it will evaluate the structure of the database as seen through its rows, columns and other graphical representations.

The company will create a model of the relationship between all the pieces of information in the group. If a new piece of MIS software is to be used, then the initiators will show top management how the software will work in the company. The software will be tested by performing calculations on the systems. Real data is entered and calculations are done in order to see whether the MIS software will yield appropriate data.

Why AMK requires MISs

AMK has utilized MISs for various purposes. One major aim for using this system is to facilitate functionality. In this regard, the organization employs MISs in order to complete and integrate a series of elements in its systems. One such function is its accounting package.

The company employs MISs to streamline the accounting packages. Additionally the firm needs to tracks its portfolios; this will ensure that every respective change is done in order to achieve that function. AMK needs to monitor its deposits; sometimes these may emanate from individual savings, loan repayments as well as personal investment.

The organization must differentiate between these transactions and capture them in real time. As such, a good MIS does come in handy. The firm also uses MISs in order to handle its customers.

Because of this, it possesses a customer information system in which it builds profiles as well as carries out the actual process of dealing with the consumers. This means that few employees have to rely on their own inconsistent judgment for such decisions.

The second application of the company’s MIS is in expanding the organization. This institution would be extinct if did not grow; therefore, it requires an organized system that would facilitate a methodical institutional growth process. The company achieves this by using its MIS in order to direct new development strategies or growth prospects.

Additionally, AMK requires MISs to guide operational decisions. In its transactions, the company must make decisions concerning a number of issues. For instance, its loan officers must decide between lending methodologies as well as the appropriate interest types for a client.

They must also choose the payment frequencies for those clients. MIS paves the way in adding flexibility to the manner in which business is conducted in this organization through loans. Alternatively, some clients may wish to change their savings accounts to a different type. Others may wish to relocate to another branch or region while others may want to increase their frequency of interest payments.

All these decisions can be difficult to make without the right information guidelines, hence explaining what management information systems do in this company.

The company uses MISs in order to deal with reporting and usability issues. It does this through report generation as well as management of reports.

Besides that, the company ensures that accounting standards and government supervisions are followed by looking into the degree of reporting in its practices. Besides this, the systems also look into the dates and numbers in all transactions so as to ensure that they are recorded correctly (O’Brien 51).

MISs also offer AMK support by backing up crucial data and facilitating the recovery process of the data that has been lost. It also supports the maintenance and support of infrastructure within the institution. During the end of a financially period, MISs will assist in processing all the information needed to carry out the work.

Lastly, MISs in this company is also applied in administrative decisions such as cost containment or performance management. The company needs to remain profitable, and the only way it can achieve this is through a sound policy process.

How MIS achieves these functions

As stated earlier, two of the reasons why the organization uses MISs are to ensure achievement of functionality as well as to create room for development. The system is able to do this by integrating the various components of the system in a manner that allows data sharing. It also eliminates multiple entries of data in different cases.

For instance, the company does not need to put in the same kind of information into its database for client detail tracking as well as deposit tracking. Once the employees enter the relevant information, then MISs can carry out tracking activities without requesting for the data again. In terms of functionality, MIS software always carries out accounting information within the organization flawlessly.

For instance, they will implement periodic updates of data, tracking systems as well as perform general ledgers and trial balances. In addition, MISs will do profit analysis and thus provide information about possible revenue declines. Besides the above, the system also assists in functionality by managing loan portfolios. It looks at historical data on services or products then integrates this with new accounting information.

It cross references groups, corrects portfolios and even informs the organization about any potential challenges such as the development of delinquency. The systems also carry out calculations on the credit scores, and thus alert the organization about some that are worth noting.

As stated earlier, MISs helps the company to engage in developmental activities. In this regard, it facilitates scalability of the computer systems within the company whenever it needs to expand. For example, MISs in the company often have models that can support the introduction of new products such as lines of credit.

Alternatively if the company wishes to start a new branch, it can depend on MISs to assist it in facilitating the move. Therefore, as the institution keeps growing, MISs continue to make the firm stronger through their capabilities.

Reporting issues in the company are done through a myriad of ways. First, the employees in the company can make their own reports within the system without soliciting for assistance from an MIS expert. These may be batch reports, use-defined or canned. The relative independence of the staff members is what explains why MISs are indispensable in the company. These systems are also intelligent enough to consider the user.

For instance, managers will get a different report from the operators. Management reports will often encompass summaries of loan officers and branch officers. On the other hand, operational reports will focus on delinquent reports or the quality of portfolios.

The MIS system also supports the organization in daily operations. Sometimes computer crashes and power outages may occur. MISs allow the organization to bounce back into action without having to worry about the loss of vital information.

Additionally, it ensures the safety of information by providing a mainframe in which the company can place this information. In situations where installation, user queries and software improvements have to occur, the company can always count on its management information systems to cover it.

Benefits of MIS to AMK

MISs have penetrated into all aspects of this microfinance institutions’ processes. Since the organization is a profit-making enterprise, it greatly appreciates cost savings that come from the systems. Employees do not have to waste time in replicating efforts or understanding newly introduced information.

These systems are also relevant to the gains in productivity because potential flaws in the company are easily detected and any opportunities for corrections are easily identified (Laudon & Laudon 15).

Perhaps the greatest benefit that AMK derives from MISs is the speed of decision making processes. Employees do not have to agonize over whether the information they are about to use is relevant or not.

They can be rest assured that it always is. For instance, if a customer needed to select an interest rate that is appropriate to his or her repayment levels, then all the loan officer has to do is refer to the system and it will determine the most suitable one. This eliminates flawed assumptions, inconsistencies and biases.

All the integrated information in the system is placed in categories that are relevant to profitability in the company. One can access information about a different part of the organization from another location. This implies that only minimal effort has to be applied to carry out daily activities in the company. AMK is now more effective and efficient in carrying out its functions.

Conclusion

MIS facilitates strategic, tactical and business decisions within organizations. The company chosen for analysis exemplifies this as seen through its application of MISs. AMK has benefited from better growth opportunities as well as greater decision making. It spends less time in performing manual functions and thus gets value for its efforts.

Works Cited

AMK. AMK: Finance at your doorstep. 2012. Web. Retrieved from www.amkcambodia.com

Laudon, Kenneth & J. Laudon. Management Information systems managing the digital firm. NJ: Prentice Hall, 2009. Print.

Microfinance Information Exchange. AMK: MFIs in Cambodia. 2012. Web. Retrieved from www.mixmarket.org/mfi/amk

O’Brien , James. Management Information Systems-managing information technology in the internetworked enterprise. Boston: McGrawhill, 1999. Print.

Pant, Simon & C. Hsu. Strategic Information systems planning. Atlanta: Information resources management association international conference 1995, Print.

Problems

Macro

From a macro perspective, the current problem with the implementation of the new management information system is its adoption by the various managers of the bank. It is the assumption of this study that the source of this problem is connected to employee resistance to change.

This comes in the form of some managers at the bank being so set in their ways that they would prefer an old inefficient system that they are used to as compared to a new and more efficient one, albeit a system that needs a considerable degree of time and effort to gain familiarity (Li et al., 2012).

Humans are creatures of habit in that they enjoy daily routines and standards of procedure that do not constantly change on a daily basis, it is only in instances that change is introduced that it is met with significant resistance due to the inherent desire to keep things as they were. Such a case is often seen in various corporations wherein changes implemented by the company is often met with significant resistance due to the desire of employees to retain the operational procedures that they have grown accustomed to (Tiwana, 2010).

What you have to understand is that when employees are exposed to a particular procedural element for daily operations over an extended period of time they develop a certain sense of complacency in that they tend to prefer the current way of doing business. Employees in certain companies tended to oppose certain degrees of automation involving internal operational processes due to the perception that such changes would eliminate the need for their job.

Even if such changes would make their jobs easier changes within the company still continued to be met with significant degrees of scepticism and fear. It should also be noted that psychological resistance to change occurs not only in employees but in managers as well (Tiwana, 2012). It is often the case that managers fear change due to the fact that they fear losing power over their employees.

Managers perceive change as a negatively impacting their autonomy over their work place environments and the various factors that they have control over. In fact, it is at times perceived as a direct attack on the managers themselves despite the fact that nothing could be farther from the truth. It should also be noted that managers resist such changes due to their perception that they may lose their jobs as a direct result.

What must be understood is that change often comes with the implementation of new practices that managers may or may not be able to sufficiently cope up with. As such, those who are under the belief that they would be unable to adapt to the new changes are the most resistant to them being implemented since it would be likely that they would be replaced by another person that has the necessary capacity to implement the changes as need be.

It should also be noted that managers often suffer from the same perception regarding complacency and, as a result, are often sceptical when changes are implemented within the company.

They often view such changes as completely unnecessary with the potential to negatively impact the status quo within the office. Evidence behind these assertions can be seen in the survey results which show that 87 percent of the managers simply did not trust the MIS. Furthermore it was indicated in the case study that Mr. Swain, the president of the bank, actually liked the system.

This means that despite the various problems that it may have, the system does work to a level that is satisfactory enough that the president of the bank would approve of its use in making management decisions. What this is indicative of is that aside from issues related to the user interface, depiction of information and slight errors in information presentation, the system works and that people are simply reluctant to use it.

Micro

Based on the case data presented, the micro problems that have been identified entail issues with the user interface, depiction of information and slight errors in information presentation. This creates an unwieldy instrument to utilize or base decisions on resulting in low levels of user adoption.

In other studies that have examined similar cases, some common complaints that would normally impact the operation of a management information system range from the layout of the data fields, the interpretation of the data records, as well as the numerous categories, drop down menus and checklists that have to be selected which cause a considerable degree of confusion for the staff of a company.

Through further analysis of the case data, the issue behind the development of the management information system that the bank is utilizing is that it was created with insufficient input from the very users who are to operate the program on a daily basis. As a result, there is a significant level of disparity between the theoretical application of the management system in increasing work efficiency as compared to its actual performance in the field.

The view of Ms. Wyatt alone seems to show that the sheer amount of information that the average user is deluged with when using the system actually prevents normal staff and managers from utilizing it correctly resulting in fewer instances of actual use. Data needs to be interpreted properly, presented correctly, showcased understandably and be error free.

Such an unwieldy system that has multiple problems with the user interface and data presentation would cause managers and workers alike to operate slower and would increase the amount of time they spend merely inputting information on the fields and wading through the sea of data instead of actually addressing client concerns. This is a major problem since the management information system is meant to increase operational efficiency and not decrease it.

Causes

From a micro perspective, the cause behind the micro problems is due to the fact that the developers who created the management information system in the first place do not think in the same manner as bank managers or bank employees and, as such, this creates problems in the way in which information is presented and shared between financial institutions and bank facilities.

Through the work of Deng & Chi which investigated the use of management information systems in various banks in the U.S., it was seen that one of the primary complaints involving the use of management information systems was from a user operation standpoint (Deng & Chi, 2012).

Deng & Chi explained that despite the numerous certifications attached to a variety of developers of the programs that indicate that they can develop the needed systems efficiently and affordably, the fact remains that bank staff (even with training) continue to find aspects of the software to be unwieldy and results in operational inefficiency rather than operational efficiency.

The main issue originates from the manner in which program developers simply do not think in the same way as actual management practitioners. This is reflected in the sheer amount of fields and categories that program developers believed would help when it came to normal operations but in the end actually resulted in an increased workload for bank staff due to the sheer amount of data that they have to go through that was presented by the system.

Systems Affected

The primary system that has been affected is the management information system developed for the bank.

Alternatives

There are two possible alternative scenarios that can be pursued in this particular case. The first scenario involves going back to the old paper and filing system that the bank utilized prior to the establishment of the management information system.

Such a move would help to resolve issues related to employee resistance to change as well as would remove problems when it comes to the accuracy of the data presented. However, going down this route would entail having to utilize an outdated system that would result in other banks developing a better competitive advantage through the use of more efficient information management systems.

The second possible solution would be to merely keep on using the system that was created. This proposed solution would result in considerable employee resistance and could become the cause of several errors in management decision making due to problems with the interface.

Recommendations

Addressing the Issue of Employee Resistance to Change

The following are the recommendations developed by this paper to address the issue of employee resistance to change. It is anticipated that through the use of such strategies a greater degree of system adoption will come about.

Changing Staff Mindsets

One of the first techniques necessary in managing change is to change the way in which employees think about the way in which they work. It is often the case that employees develop a certain mindset regarding work which makes them far less apt to change when the need arises. In the case of bank staff this comes in the form of utilizing the management information system instead of the hardcopy paper records that they utilized before.

The problem though with this method is there would of course be a considerable level of initial resistance to change since the staff have already gotten used to and prefer the old system. It is based on this that what is needed is to slowly change internal bank policies and workplace culture so as to make it more amenable to the desired change rather than implement it all at once. This conforms to the first principle of change in which a person is adjusted via a change in the system that they work in.

Implementing a workplace culture of open communication

Earlier it was stated that people tend to resist change, while this is true the fact remains that there are actually method of mitigating this. One of them is implementing a workplace culture of open communication, by doing so not only can employee fears be addressed and taken into account when implementing change within the organization but it can be used as way in which to dampen the unforeseen and adverse effects the might happen should change be implemented.

Establish Goals/Purpose driven work

In their study examining record performance, it was discovered by Weiyin et al. that it is often the case that employees work better and adapt to change faster if there is a given goal or rather their work is driven by a specific purpose.

Taking the third principle of change into consideration, it can be assumed that by creating a defined vision by which employees can work towards not only would this result in a smooth transition during change within the organization but can actually result in improved employee performance as well (Weiyin et al., 2011).

Addressing the Issue of the Micro Issues

Another recommendation that this study proposes is that the development (i.e. revising of the current system) should be either supervised or assessed by a group of personnel that have a vested interest in the system and its use (i.e. bank employees and managers).

Based on the information that has been provided within the case, one of the problems with the present day management information system is that it is based on what the programmer thinks would be the most effective means of data presentation instead of what is considered standard practices in the bank. This results in financial practitioners who have been trained to transcribe or examine information in a particular fashion to have to get used to an entirely new method of data input which has the possibility of creating mistakes.

The researcher recommends that program developers focus less on creating a systematic method of information presentation. Instead, they should focus on creating one that is more in line with what managers want, namely a method of reviewing and inputting client information that is not “fussy”, can easily be used, and does not have the same level of restrictions and clutter seen in the present day system.

Reference List

Deng, X., & Chi, L. (2012). Understanding Post-adoptive Behaviours in Information Systems Use: A Longitudinal Analysis of System Use Problems in the Business Intelligence Context. Journal Of Management Information Systems, 29(3), 291-326.

Li, C., Peters, G. F., Richardson, V. J., & Weidenmier Watson, M. (2012). The consequences of information technology control weaknesses on management information systems: the case of sarbanes-oxley internal control reports. MIS Quarterly, 36(1), 179-204.

Tiwana, A. (2010). Systems Development Ambidexterity: Explaining the Complementary and Substitutive Roles of Formal and Informal Controls. Journal Of Management Information Systems, 27(2), 87-126.

Tiwana, A. (2012). Novelty-Knowledge Alignment: A Theory of Design Convergence in Systems Development. Journal Of Management Information Systems, 29(1), 15-52.

Weiyin, H., Thong, J. L., Chasalow, L. C., & Dhillon, G. (2011). User Acceptance of Agile Information Systems: A Model and Empirical Test. Journal Of Management Information Systems, 28(1), 235-272.

Abstract

Information technology has leveraged firms in their core primary and secondary activities in the information value chain and business processes. Manual systems have been shown to have a retrospective effect on the performance of companies, which underpins the need for organisations to shift to the use of the intranets and extranets.

The trend towards adopting information systems to run the core managerial activities for different departments underpins the need for the Nike footwear company to integrate different information systems including decision support system, enterprise resource planning application among other applications to make strategy decisions at different levels of management.

When combined, the applications create a knowledge management system, which provides the senior managers of the company the ability to make various managerial decisions effectively and efficiently.

It has been shown that when the right information is available, it enables the senior managers to make the right decisions, which positively impact on the performance of the lower departments, which include the financial, sales and marketing, production and manufacturing, and the human resource departments.

Information Value Chain and Business Processes

This study focuses on the information value chain between different departments of Nike’s Company, which deals in the production and distribution of footwear in the clothing industry (Arnott & Pervan, 2008).

The concept in question deals with value addition for each of the processes and steps in each of the four departments (human resource, finance, sales and marketing, manufacturing and production) to ensure that the information value chain and business processes are appropriately applied for the competitive advantage of the firm in the market.

Information value chain is important because the activities, which are executed at any department, affect the activities and performance and outcomes in other departments.

The diagram below shows the relationship between the departments and underpins how the manual system which is used to conduct the primary and secondary activities within the departments is related to the performance of each department and the overall business chain performance of the company (Barua, Konana, Whinston & Yin, 2004).

There is a direct relationship between primary and secondary value chain activities and the outcomes from each department. In each department, the primary activities are closely interlinked and any impact caused in one department affects the activities in the other department.

To achieve competitive advantage because of value chain activities, this study will focus on the four major departments and try to analyse the traditional and modern approaches of applying the concept in the four departments, and the influence the primary activities, which include research and development and product design (which belong to the manufacturing and production department), the sales and marketing departments, the human resource department, and the finance department (Lewis, Templeton & Byrd, 2005).

The information value chain and business concept, when implemented within the different departments of the company will provide the company with the strategic advantage over rival firms in the market, in the context of the supplier value chain, firm value chain, distribution value chain, buyer, and disposal value chain activities in the business cycle as shown in the diagram below.

Figure 1

The departments and the relationship between the departments, in terms of the information value chain and business processes are illustrated in figure 2 below.

Figure 2

The diagram shows how the performance of each department depends on the primary and secondary value chain activities, and how they affect the output and performance of each of the departments (Evans & Berman, 2001).

It is important to note that the firm has several departments, which play significant roles in the research and development, design, production, and marketing of the final product, by providing the required support activities for the firm in the firms’ operational activities.

Typically, it is possible to see that the activities are divided into primary and secondary or support activities. By focusing on the four departments, it is important to discuss the processes from the traditional point of view, and identify the strategic processes and value addition in the supply chain of footwear in the USA.

10-step Traditional or Manual

The key elements in the ten stage manual system of executing the primary activities include manufacturing and production, accounting activities, which are under the finance department, sales activities in the sales and marketing department, order generation activities, and credit validation and verification.

Once the credit status is accepted, the manual system is required to generate an invoice, and the product is assembled and shipped to the consumer (Evans & Berman, 2001).

Before the company integrated its current information value chain and business into its business functions, it relied on the ten step traditional supply chain system to conduct its business transactions and other processes, which included the primary activities and secondary activities in each of the departments and used the manual system to coordinate the departments.

The primary activities of specialised focus include the research and development, the design, production, the sales and marketing activities. The transactions in four departments had to be conducted manually (March & Hevner, 2007).

In the second step, then Nike Company separated the primary activities as shown in figure one into the above mentioned activities, which belong to the sales and marketing department, the human resource department, the finance department, and the manufacturing and production departments, which can be mapped into Nike’s structure.

Figure 3

The processes, which map the departmental functions of the Nile Company and the activities at each point of the process, are shown in figure 2 above.

The third step in the manual chain was to establish the products which were required in the market base on the research and development activities (sales and marketing department). Within the research and development primary activities, information was generated by researchers who conducted research by going to the market and collecting data using the manual pen and book system.

In the fourth step, the strategy involved spending a lot of time and resources to capture data from customers in terms of the time to reach the large number of customers and other stakeholders to get to understand what their real needs and expectations were.

In addition to that, the old technologies which used the postal services were also put into use to gather the required data to support the research and development team to achieve their goal.

Based on the information value chain and business activities, it is evident from the above processes how the primary activities of collecting data from the customers by the sales and marketing team (who comprise the research ad development team from Nike company) influence the long term operations of the human resource department, the sales and marketing department, the manufacturing and production department, and the financial department.

The area of specialised focus was the manufacturing and production department and the sales and marketing department.

In the fifth step, the strategy could limit the company from enjoying certain benefits, which include low cost advantage because information was not made available in real time to be acted upon, and when made available, a lot of time was required to anayse the information manually to ensure that the correct information was made available to provide the right and reliable solutions for the accounting activity, which was done manually.

In addition to that, the procedure of collecting, documenting, analyzing information was prone to a lot of errors and sometimes loss of crucial information was experienced.

In the sixth stage, it was expensive and difficult to generate the right invoice data, which was collected an acted upon based on the traditional data gathering and processing approach showed a lot of inconsistencies with the data which was collected for use to make some of the most important decisions which could affect the operational efficiency of a firm.

The seventh stage showed how the preceding activities affected other activities in the business value chain. It was critical as the eight stage for the company to develop a strategy to employ a large number of staff to work in the finance department (sales and marketing), which made the company to pay large sums of money in terms of salaries to the staff invoice generation purposes.

The results were a loss of cost advantages in the market, because, the cost of one activity could be translated to the cost of subsequent activities, which could be evident in the cost and shipment of the final product, at the ninth and tenth steps. It is important to note that the system relied on the characteristic behavior of the users of the system because they could introduce their own errors, which were intentional or unintentional.

As opposed to the current system, the manual system was discovered to be time consuming and the cost advantage associated with real time communication and provision of services were not gained by the firm.

Duplication of data entry and lack of accountability and security to ensure that the data was preserved to meet the integrity, availability, and confidentiality of data could not be achieved based on the use of the manual system in the business chain.

Typically, producing the right data and information to use to make the right decisions on the type of products to produce and offer to the customers was a difficult situation for the management of the firm at all levels of management.

Typically, what happened in the manual processes for the company is illustrated in the diagram below.

Figure 4

When it came to the production, marketing and distribution departments, the need to achieve real time information dissemination encountered the same problems associated with the research and development department of the footwear company. However, the challenges in each department were unique to the uniqueness of the departmental functions of the company.

The manufacturing and production department received information and data from the research and development department, which was acted on in the production of the footwear.

However, the time lag and lack of real time information from the market could contribute to the production of products, which made late entry into the market, making the products lack the competitive advantage associated with the earlier entry into the market.

The accounting department, which is the next in the business chain, could not provide real time information in the revenue collected to enable the appropriate departments to forecast and determine the trend of the financial performance of the company besides the usual problems of making errors in balancing the book of accounts.

Such problems were critical because a lot of time was spent in analyzing financial data, which was critical in enabling the firm to determine the right strategies and areas of operation to concentrate in (Jasperson, Carter & Zmud, 2005).

The sales element of the manual system presented a number of problems and challenges associated with the dissemination of the right information about the products to the market in the business chain.

It is of much importance for the business chain to provide the required information about the market in terms of demographic trends, the consumer characteristics, buying behavior, income levels, and market trends to help the marketing department to make the marketing department to create the right marketing strategies for their products (Jasperson, Carter & Zmud, 2005).

A critical analysis of the manual system shows that the firm was at a loss in getting the right information at the right time and in most cases because the right information was not made available at the right time, the customer could miss out on the products they had placed an order for or they arrived late, when they were not required.

In addition to that, it is critically clear that the marketing department performs a number of functions which have to be fulfilled to make position the footwear in the market. Typically, the marketing functions become effective when there is real time communication of information about the market needs and trend in real time.

The manual systems could not enable the marketing department, as one of the elements in the business chain to disseminate information into the market in real time (Goldschmidt, 2005).

The next element in the business chain is to generate the order given by the customer. It is critical to note that once the order has been generated, the manual system does not add the required value in terms of enhancing the rate at which the order is generated. It is possible to make mistakes at each level of department.

The research and development department might not have the requisite specification on new changes on the order, and the production department might not be able to link in real time with other departments on new changes to product specifications, leading to a waste of resources in terms of money and products.

Other processes involved in the business chain, which occurs between the departments include submitting the order, check credit, approve credit, generate invoice, assemble, and ship the product.

Improving the Business chain

The two areas of interest of the manual system, which can be acted on include the sales and marketing and the manufacturing and production departments.

The underlying reasons are that the manual system suffers a significant number of setbacks when integrated and used within the research and development, production, design, and marketing departments of the Nike footwear company to execute the core functions in the business chain (Goldschmidt, 2005).

The problems and challenges associated with the use of the manual system underpin the need for company to integrate the Information value chain” and “business processes into the core business processes of the two departmental areas already identified in the study.

Here, a number of solutions come in handy to provide the company with the competitive advantage required for the operations and the solutions to be integrated into the functional departments of the company (Goldschmidt, 2005).

Steps to modernise the manual system

The first step to take to modernise the operations of the two areas of the sales and marketing operations and the manufacturing, which is also revered to as the production area is to assess the type of transactions taking place within the departments to, which could provide appropriate information on best strategy and applications to use to address the needs of the departments (Goldschmidt, 2005).

The first department to consider is the sales and marketing department.

The department core functions include gathering statistical data on the behavior of the market, current market trends, income demographics, real time access to the market, market segmentation, product segmentation, market intelligence reports, competitors, new threats, existing threats, market penetration strategies, and other elements (Luftman, Kempaiah & Nash, 2006).

The manual information processing system falls short of providing real time information to the sales and marketing department in real time to perform the core functions in time.

The solution for the scenario is to use a web-base management information system, which is then integrated into the management information system of the company to leverage the performance of core services at all level of the sales and marketing strategy (Luftman, Kempaiah & Nash, 2006).

The management information system integrated with the web based information systems module could provide the sales and marketing department a competitive advantage over the manual system because it brings services closer to the people by using the internet as a platform to communicate.

The following diagram provides an overview of how the internet is a tool that has contributes to the operational efficiency of the departments of the company in supporting and offering a real time platform to execute the primary activities and other support or secondary activities.

Figure 5

It is critical to note that at the center of the diagram, we have an intranet, and other sections or components connected to the intranet.

Observations show that the value chain activities of the business can have an overall impact on the market, including the retailing activities, inventory management, product distribution , production, shipping, order processing, suppliers, procurement, and the planning and scheduling functions (Marakas, 2003).

Each activity in each department depends on the flexibility and use of the intranet, which is a network that is used within the organisation, making the intranet a web based application by integrating its functions with the internet could provide a competitive advantage to the business organisation.

The system could provide the organisation with leverage over its primary and secondary activities by enabling the sales and marketing department to perform the activities of gathering and creating data besides information generation and application, and the use of the information to generate the required knowledge to perform the cores sales and marketing activities with efficiency and effectiveness (Dennis, Wixom & Tegarden, 2005).

The hardware requirements vary from one platform to the other, especially when different users access the site through the internet. It is therefore possible for the web based application to run on different devices including mobile phones, lap tops, and desk top computers and electronic devices, which have a processor and access point to the internet.

Another area of concern is the hardware requirements to host the management information system which has a web based module integrated to the information system (Dennis, Wixom & Tegarden, 2005). The hardware requirements include high processing powers, which are based on MPC8548E, MPC8547E specifications for high speed processing of data and which provide high speed interconnectivity for networking.

The MPC8548E, MPC8547E processors have a dual speed of 4.0 GHz and a RAM of 5 GB. The processors fall into the family of the most modern QorIQ communications processors, which are used for network communication services.

In addition to that, the hardware supports both the 64 bit and the 32 bit operating systems and is compatible with different operating systems, which include Microsoft windows based operating systems, and the Linux based operating systems.

The software requirements include a 64 bit or a 32 bit network operating system, a web module, which can be made available through open source acquisition process. The recommended management information system which can be easily integrated with the web based applications is CRM from Microsoft.

The critical advantages with the software are that it can be used to generate business reports, which are suitable for different levels of management of the company (March & Hevner, 2007). The software can be used to generate data, and can perform the forecasting function of trade sales and marketing data and information, which is critical for decision making.

Other functions, which can be performed in the system, include real time access and gathering of data and information from the customers, which leads to an increase in sales, increase in the size or quantity of product orders, higher accuracy in forecasting, and increase in sales and marketing productivity. The software provides real tie services for small, medium, and large sized companies (March & Hevner, 2007).

Another area of sepcialised focus for the application of the information value chain and business processes concept is the research, design, and product manufacturing department.

The need to integrate the web based information system is to allow the marketing department, which when working in tandem with the sales and marketing department, will enable real time sharing of information on the dynamic needs of the customers in the market, the type of products on demand, and other innovations, which can be made on existing products, to meet the ever changing market needs.

It provides real time information in the areas where value will be added in the product manufacturing process to ensure they are compatible with the needs of the need of the customer, the products are processed faster and efficiently, and the cost of production is low.

How Professional MIS helps Traditional or Manual makes Business processes faster

The management information system (MIS) to carry out the day to day business transactions and generate reports, which are crucial for the successful, execution of the core business operations in the Nike’s business operations (March & Hevner, 2007).

A number of applications can be used to provide the business value required for successful implementation and execution of the business transactions and include the enterprise resource planning (ERP) management information system.

The RRP is a suite of applications or modules which provide different services and a common repository of information known as the database (Shim, Warkentin, Courtney, Power, Sharda & Carlsson, 2002).

Typically, the ERP provides the flexibility of collecting information, which can be accessed by other modules once the information has been entered into the system and stored in the database. The enterprise software is defined by different modules, which include the human resource, the manufacturing and production, and the sales and marketing department.

The next application of worth to be integrated into the management information system is the transaction processing information system. An analytical examination of the system shows that it provides the necessary facility to conduct the day to day transactions necessary to conduct business between the customer and the company.

The transaction processing system provides the capability for the sales and marketing department to effectively conduct the primary activities of capturing data and information. The TPS allows the sales and marketing department to capture and analyse large amounts of data, which is accepted into the system as input data.

The TPs is able to process, store, organise, and share the processed data for business decision making. The system is able to generate reports on the processed data an present the information in a manner that enables the operational level management to make strategic decisions for the operational efficiency of the departments.

Another management information system that could be of critical value is the decisions support system (DSS). The DSS provides managers with the required information to make non-routine decisions. The information system relies on the use of different mathematical models to provide management solutions (Shim, Warkentin, Courtney, Power, Sharda & Carlsson, 2002).

On the other hand, since the management information system was integrated into the core operations of the company, by removing the manual operations in the company, which made the company to realize a number of core advantages, which include an increase in the core business values based on an increase in the operational efficiency of all the departments of the company (Luftman, Kempaiah & Nash, 2006).

The manual system reduced the operational efficiency of the firm because it incurred a number of weaknesses, which include data loss, inaccuracies, unreliability, and it is prone to accidental modifications. However, with the use of the MIS, it is now possible for the sales and marketing department to collect market data, which can be made available for other departments to use.

Such data can be used to support organisation wide decision making. Nike is a company, which majorly focuses on footwear and the information available from the sales and marketing department can be used to make the right decision on research and development and the type of footwear to produce, based on the current market tastes (Luftman, Kempaiah & Nash, 2006).

Typically, real time information provides the management, and particularly the sales and marketing debarment to collect an anayse data in real time to provide rapid response to the customers and their requests for certain products and services in real time.

The system consists of modules which have analytical tools for processing and analyzing data and information, which has been posted or collected from the people to make real time decisions (Marakas, 2003).

How Professional MIS makes senior management in decision making

It has been shown that management information system which integrates different the core modules of the transaction processing system, the decision support system, the management information system, executive support system, and the enterprise resource planning, when integrated into a single application referred to as the management information system can provide strategic advantages in decision making, by enabling the senior managers to make short and long term strategic decision by re aligning them to the vision and mission statements of the organisation (Shim, Warkentin, Courtney, Power, Sharda & Carlsson, 2002).

Typically, the application can be integrated into as single application known as the Knowledge Management Systems (KMS) helps management to make strategic decisions, at the human resource level and the operational level of the human resource department, by enabling the department to access appropriate information about current employees with expertise in certain areas, and who have the potential to make significant contributions to the performance of the organisation.

The company is able to identify the weaknesses and strengths of the personnel and to determine the quality and quantity of work and employee contributions to the performance of the company (Tallon, Kraemer & Gurbaxani, 2001).

Another area is the sales and marketing department. It has been established that the application helps senior managers to plan for effective resource allocation for the sales and marketing activities.

The success of planning properly depends on already processed customer data, which is accessed, stored, processed, and generated in real time to ensure that effective decision making. It is important to note that the decisions made by senior management affect the operations of lower level managers, who include the tactical and operational level managers.

Senior managers are able to make decisions which affect the reputation of the firm. In the business value which have short and long term implication on the performance of the company (Turban, Aronson & Liang, 2005).

Figure 6

According to Luftman, Kempaiah and Nash (2006) and Lee and Yang (2000), the KMS provides supports the processes to acquire, store, process, and apply available knowledge to organise information in an appropriate forms for effective decision making.

KMS is a professional application which allows other applications to collect both internal and external information and interlinks both sources of information to make strategic decisions (Melville, 2010). Typically, the applications consist of a repository of information about expertise employees who have specialised skills to benefit the organisation in decision making.

References

Arnott, D., & Pervan, G. (2008). Eight key issues for the decision support systems discipline. Decision Support Systems, 44(3), 657-672.

Barua, A., Konana, P., Whinston, A. B., & Yin, F. (2004). An empirical investigation of net-enabled business value. Mis Quarterly, 28(4), 585-620.

Dennis, A., Wixom, B. H., & Tegarden, D. (2005). Systems analysis and design with UML version 2.0. Wiley.

Evans, J. R., & Berman, B. (2001). Conceptualizing and operationalizing the business- to-business value chain. Industrial Marketing Management, 30(2), 135-148.

Goldschmidt, P. G. (2005). HIT and MIS: implications of health information technology and medical information systems. Communications of the ACM, 48(10), 68-74.

Jasperson, J. S., Carter, P. E., & Zmud, R. W. (2005). A comprehensive conceptualization of post-adoptive behaviors associated with information technology enabled work systems. Mis Quarterly, 29(3), 525-557.

Lee, C. C., & Yang, J. (2000). Knowledge value chain. Journal of management development, 19(9), 783-794.

Lewis, B. R., Templeton, G. F., & Byrd, T. A. (2005). A methodology for construct development in MIS research. European Journal of Information Systems, 14(4), 388-400.

Luftman, J., Kempaiah, R., & Nash, E. (2006). Key issues for IT executives 2005. MIS Quarterly Executive, 5(2).

Marakas, G. M. (2003). Decision support systems in the 21st century (Vol. 134). ^ eNew Jersey New Jersey: Prentice Hall.

March, S. T., & Hevner, A. R. (2007). Integrated decision support systems: A data warehousing perspective. Decision Support Systems, 43(3), 1031-1043.

Melville, N. P. (2010). Information systems innovation for environmental sustainability. MIS Quarterly, 34(1), 1-21.

Shim, J. P., Warkentin, M., Courtney, J. F., Power, D. J., Sharda, R., & Carlsson, C. (2002). Past, present, and future of decision support technology. Decision support systems, 33(2), 111-126.

Tallon, P., Kraemer, K. L., & Gurbaxani, V. (2001). Executives’ perceptions of the business value of information technology: a process-oriented approach.

Turban, E., Aronson, J., & Liang, T. P. (2005). Decision Support Systems and Intelligent Systems 7”‘Edition. Pearson Prentice Hall.

ABC Products and services definition

ABC, Inc. is a worldwide wholesale establishment, which deals in numerous chains of large discount departmental stores along with depository stores. Specifically, the corporation specialises in apparel, footwear specialty, cash and carry, warehouse clubs as well as discount stores and hypermarkets.

Besides, the establishment has expanded its product range including all manner of fashionable products, accessories, garments, ornaments and bouquet. Further, the firm has not only expanded in terms of product range but also in geographical coverage. Currently, the firm boasts of over 300 stores worldwide.

The business focus according to porter’s generic strategies

In order to participate successfully and gain competitive edge as well as outperform rivals in the market, ABC follows a number of tactics aimed at developing expertise, knowledge in addition to capabilities. Specifically, the corporation utilises cost-leadership, differentiation as well as focus cost-leadership strategies.

Cost-leadership

ABC utilises low-cost strategy to increase its client base. Actually, through the cost-leadership strategy, the firm is capable of serving as well as meeting the needs of clients residing in rural neighborhoods. In principle, other retailers often focus on urban clients ignoring the rural clientele. As such, ABC Inc. has developed low-cost management technology that is of great significance in its operations.

In this regard, the advancement of low-cost materials management is invaluable in enabling the establishment to procure, allocate and trade merchandise at lower prices compared to its rivals (Gamble and Strickland 57). In reality, the low-cost competence of ABC enables the wholesale store to attract customers from other competing firms thereby increasing proceeds.

Differentiation strategy

Actually, a number of retail stores majorly focus on wealthy clients who consider quality as core to their purchasing decisions. Conversely, ABC pursues a differentiation strategy that entails designing and offering products that meet the specifications of different consumers.

Based on the strategy, the firm provides designer clothes that are expensive, distinctive appliances as well as highly personalised services for the wealthy clients (Miller 38). On the other hand, ABC pursues the differentiation tactic to meet the requirements of clients through offering low-cost products.

Focus cost-leadership

The focus cost-leadership strategy is applied by ABC Company to increase its presence and compete effectively in the mass market. The major aim of the strategy is to increase the firm’s online stores as well as physical stores.

Increasing the presence of the firm’s products to specific segments of clients provides the customers with seamless shopping experience in the business’s physical and online stores (Porter 36). The online stores are designed to be accessed by the customers through mobile devices.

In essence, the business stores are capable of selling products locally to the esteemed customers. The strategy has increased the firm’s market share through increased customer base. In addition, the strategy has increased the business’s performance particularly in terms of increased sales.

Divisions in ABC Company

The main divisions in ABC Company include marketing, store operations and human relations along with information management systems. To begin with, the store operations division is responsible for sales, management, teller operations along with receiving and prevention of losses. Second, the marketing department ensures public relations, visual displays and promotion of the firm’s products.

Third, the merchandising division is responsible for planning, buying and controlling the organisation’s stock. Forth, the selection, recruitment, training and development of personnel are the obligations of human relations department.

Lastly, the firm’s information management systems department is responsible for redesigning the firm’s structure in order to support decision-making, alliance and leadership abilities of the organisation when the store experiences growth prospects.

The extent to which Management Information Systems (MIS) division generates business intelligence and achieves competitive advantage

The designs and machineries that transmute raw data within organisations into expedient gen are significant for business operations. In this regard, management information systems division enables firms to handle voluminous data that are capable of ascertaining, developing and generating prospects for businesses.

Actually, management information system is significant in augmenting as well as refining the firm’s response towards the competitors’ actions. In other words, MIS provides apposite and quick reactions to competition through the analysis and collation of relevant information significant to the operations of firms.

Besides, through the MIS segment, the firm is capable of improving its operational efficiency and flexibility by trimming down bureaucracy within the establishment thereby incurring reduced costs in operations. Moreover, MIS augments the levels of planning that leads to increased efficiency (Porter 58).

Porter’s value chain analysis and porter’s five forces

Value chain analysis

ABC’s inbound and outbound logistic management, which are the firm’s primary activities entail fast and receptive delivery structure. The firm has a well-developed distribution channels that makes the transportation of the products to delivery centers be within the shortest time.

Besides, the firm’s private operations handbook is significant in ensuring that the organisation’s personnel adhere to codes of conduct. Based on the firm’s operations, the stores as well as the warehouse membership clubs augment the corporation’s proceeds (Wright 96).

Besides, ABC’s low-cost strategy forms the core of sales and marketing approaches. Regarding support activities, ABC’s procurement is anchored on the reduction of purchase costs to provide clients with low-priced goods.

Moreover, the corporation utilises numerous refined expertise including bar code, computer systems and RFID technologies that aid in securing an unswerving stream of ABC’s merchandise. ABC utilises superior Information Communication Technology (ICT) systems including massive parallel processors that track the movement of the firm’s products in the delivery warehouses.

Porter’s five forces

Threat of new entry

Due to the exceptional trademark, delivery systems and locations as well as robust financial capital, ABC has the capability of discouraging rivals with intentions of entering the industry. Additionally, the outlays involved in erecting wholesale business such as ABC makes entry in the industry uninviting (Irwin 178).

Threat of substitutes

ABC offers convenience as well as low prices to its customers. In this regard, the industry in which ABC operates has higher threat of substitutes because other retail stores offer low prices on products.

Bargaining power of buyers

In the retail industry, buyers greatly determine the type of products and services to be offered. As such, buyers have greater degree of control in the industry. Besides, ABC has to provide quality products that meet the consumers’ requirements.

Bargaining power of suppliers

Companies within the retail chain trade control higher proportion of the market. As a result, ABC engages large number of suppliers. The control of larger segments of the market gives power to the firm since ABC can create scarce strategies to the suppliers by switching to other potential manufactures and wholesalers effortlessly and cheaply (Wernerfelt 175). In principle, the suppliers in the retail industry enjoy low bargaining power.

Competitive rivalry in the industry

Companies operating in retail industry are very aggressive. However, due to the market leadership capabilities of ABC, the establishment of its operations is uncomplicated. In other words, the firm utilises its technological advancements as well as financial strengths that offer increased competitive edge over rival firms. As such, the industry experiences high competition.

XYZ products definition and the business focus in terms porters three generic strategies

XYZ is one of the national Islamic banks in UAE and is fully owned by the government. XYZ offers various products to over 1.5 million esteemed clients across UAE. The bank’s main services include Islamic personal loans, corporate loans and investment advisory ventures.

In addition, the bank offers treasury and wholesale banking products. In fact, retail and wholesale services account for over ninety-seven percent while corporate services and products contribute over three percent. The bank is also one of the managing trustees of Equity Fund, which is the largest in UAE.

Close association with Shariah principle characterises Islamic banking operations. In other words, financial products and services provided by the Islamic banks are based on Shariah principles. The financial pillars include the asset backing principle, the loss and profit sharing principle, ban on certain financing economic sectors, ban on speculation, uncertainty and interest.

The associations of the firm’s products with the Islamic principles allow the firm to offer products at low prices compared with commercial banks. In fact, the cost-leadership strategy is achieved through evasion of any form of interest owing to the fact that interest is a prohibition in Islam.

In fact, XYZ reduces its costs through discount of overheads related to interest via creating profit and loss allotment banking system (Chan and Wong 570). Such a system is expected to allow XYZ share any accruing risks with the esteemed customers.

The low-cost strategies differentiate XYZ products particularly from the competing Islamic banks within the market. Besides, the differentiation and low-cost strategies have enabled the firm to operate favourably within the market segment. In other words, the firm has maintained its services delivery within the target market.

The firm’s main division

XYZ is divided in various departments that are coordinated through well-developed systems. However, the main divisions of the bank include promotion and development, management information systems, policy, Shariah and market analysis as well as research and development.

Business support unit utilises the management information system division to coordinate all the departments. Essentially, the management information system is critical in the information processing used to coordinate all the departments.

The management information system consists of processes that determine the nature of the bank’s capabilities towards service delivery to its customers. The most important function of the information system is the linkage the firm creates with the customers.

In fact, the processes are usually a combination of software that provides all customer interactions over the internet, linking people and providing exceptional handling of the situations that create customer relationship with the bank (Chan and Wong 577).

Value chain analysis of XYZ

The operations of XYZ are anchored on the provision of quality banking services to clients using sophisticated expertise. Specifically, the firm utilises modern expertise to save on outlays involved in logistics and inventory management.

Besides, the organisation also applies wire devices that are capable of loading large amounts of significant data. Moreover, XYZ has undertaken advancement of its e-business organisation. For instance, the firm has embarked on utilising eServer and z900 mainframes as well as Enterprise Storage Servers (ESS) that have been invaluable in data handling, resolution along with debit and credit communications.

Porter’s five forces analysis of the firm

Competitive rivalry

Like most firms in the industry, XYZ is influenced by the power of suppliers, threat of new entrants, and threat of substitutes, buyer’s power and the competitive rivalry. Competitive rivalry within the industry is very high and is determined by such factors including exit barriers, product differentiation, cost advantages and the brand identity.

Considering the exit barriers, the firm is well placed since various exit options are available. Besides, the firm has increased cost advantages given its decreased prices and reduced cost strategy. Moreover, the products and services of the firm are highly differentiated in order to increase the competitive advantage.

Given that most firms are offering the same prices, the rivalry within the industry is intense to the industry in which ABC operates (Murray 392). As such, firms have to differentiate their products and services and offer low prices in order to remain competitive.

Threat of substitutes

The changes made in the rival services and products can easily affect the low-cost strategy of the firm. In fact, the ability of XYZ to deal with cost constraints has increased its competitive advantage.

The threat of substitute products in the industry comes about due to possibility of price reduction strategies by the rival firms (Murray 394). Like the wholesale industry in which ABC is operating, the industry in which the XYZ is operating has increased threat of substitutes.

The bargaining power of buyers

The buyers’ bargaining power results from the capability of the buying process of the customers. Similar to retail industry, in the banking industry, buyers greatly determine the type of products and services to be offered. As such, buyers have greater degree of control in the industry.

Even though the firm targets specific clientele, the rival firms within the industry enable customers to have a greater say in terms of prices of products.

Bargaining power of suppliers

Even though the industry relies on suppliers for various materials critical in the operations, the suppliers have little influence on the determination of prices. The bargaining power of suppliers is low compared with other industries such as retail.

Threat of new entrants

Entering into the industry is difficult given the complexities in the operations of the firm and the specificities required in Islamic banking. Unlike conventional banks that few barriers to entry, Islamic banking have tight controls and religious regulatory framework that create increased barriers to entry (Murray 399). Just like retail stores such as ABC, XYZ have few competitors.

Recommendations

For ABC, the firm should continue to utilise product differentiation to remain competitive in the industry. In addition, the firm should apply technological prowess and its distribution network to increase its capabilities critical in augmenting competitive advantage.

On the other hand, XYZ should emphasise on the importance of technology in service delivery. Further, the firm should focus on cost reduction strategies, which form the core of its competitive edge in the industry. Generally, firms should focus on the capabilities and competencies that contribute to increased competitive advantage.

Works Cited

Chan, Rickey Yee-kyong and Yee H. Wong. “Bank Generic Strategies: Does Porter’s Theory Apply in an International Banking Center.” International Business Review, 8.5 (2009): 561–590. Print.

Gamble, Arthur and John Strickland. Crafting and Executing Strategy: The Quest for Competitive Advantage: Concepts and Cases. Boston: McGraw-Hill/Irwin, 2010. Print.

Irwin, Richard. “Strategic cost management: The value chain perspective.” Journal of Management Accounting Research, 37.16 (2003): 179-197. Print.

Miller, Danny. “The generic strategy trap.” Journal of Business Strategy 13.1 (2002):37-41. Print.

Murray, Alan. “A Contingency View of Porter’s “Generic Strategies.” Academy of Management Review, 13.4 (2008): 390-400. Print.

Porter, Michael E. Competitive Strategy: Techniques for Analyzing Industries and Competitors. New York: The Free Press, 2000. Print.

Wernerfelt, Birger. “A resource-based view of the firm.” Strategic Management Journal, 5.2 (2004): 171–180. Print.

Wright, Peter. “A refinement of Porter’s strategies.” Strategic Management Journal, 8.3 (2007): 93-101. Print.