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The business environment in which companies operate today is always changing, and it is becoming more and more complex. Organizations, both private and public, feel increasing pressures that force them to react quickly to changing conditions and to be innovative in the way they operate. Managers have always directed their focus on information systems (IS) because such investments are deemed to provide real economic value to the business. The decision made by Google to enter fashion e-commerce presumes that there would be high returns in regards to gaining market share and expanding customer experience.
This article (Efrati & Morrison, 2010) elicits several IS strategy issues that are common in any business environment. With its newly implemented e-commerce site, Boutiques.com, Google seeks to widen its market base by offering customers new ways of searching and purchasing clothes and accessories. The site incorporates knowledge based systems such as machine learning to recommend products for buyers. This is an interesting IS strategy because the site helps the company to implement its business strategy of becoming an international search engine. It is also cost-effective since marketing through the Internet is cheaper as compared to traditional media such as television and newspapers.
The move to implement the website is driven by the need to compete with other companies such as Amazon.com Inc and EBay, thus gaining a competitive advantage. Although Amazon and EBay employ full e-commerce capability in their websites, Google seeks to enter the e-commerce market by first acting as an intermediary between the merchants and buyers. Google has been able to conduct research on the need to establish a fashion website. This has been the major breakthrough in embracing Internet and knowledge based technologies towards achieving its business goals (Efrati & Morrison, 2010). In addition, the organizational strategy of the company is to find new ways of serving customers. IS supports this strategy by enabling the company to direct customers to use their newly implemented website. Through the Internet, the company is able to reach its customers directly because the Internet spans the world.
According to Pearlson and Saunders (2009), a proper information system that meets the organizational requirements should be developed or acquired to support a firm’s business process. Google purchased Like.com in August 2010 for almost $100 million with an aim of improving the IT infrastructure of Boutiques.com. Google integrates managers, websites, employees, network, and data in driving its IS strategy. Managers make planning decisions; websites are the systems that link the company with its customers; employees ensure that strategies are followed; networks such as the Internet enable the company to build customer-driven websites; and data about the company and its customers enhance planning and business processes.
Information systems do not appear randomly in business, their development is time-consuming and cost-bearing experience that should only be undertaken after careful analysis and consideration of the objectives of an organization. In our article of focus, Google was able to analyze the business environment before acquiring its information system. Moreover, Efrati and Morrison (2010) assert that the system implemented by Google does not incorporate all the functionalities of an e-commerce website. It is the company’s strategy of weighing the responses of customers so as to establish sustainable requirements for developing an e-commerce model. The Internet supports strategic planning because it enables Google to understand customer needs. By creating interactive web pages, the company can be able to obtain customer feedback relevant to specific requirements.
The goals of an information system are essential in determining the scope, shape and nature of the organization. It is important for managers to embrace information systems in order to achieve the corporate goal of a business strategy. Since an information system is comprised of hardware, software, people, network, and procedures used by organizations to provide information for decision making, the information requirements of a business is based on the managerial decision that has to concur with managerial levers.
Managerial levers that ensure proper implementation of organizational strategy include organizational, control, and cultural variables. Organizational variables encompass things like business processes, informal networks, and decision rights. Control variables include data, performance measurement, and planning. And cultural variables are the values that determine the organizational culture (Pearlson and Saunders, 2009). With regards to Google, the managers are concerned with driving the business processes and making decisions about the new system. Proper planning is also relevant in ensuring that the new site does not succumb to competition from other big e-commerce sites. The company establishes a culture of involving all the interested parties in any decision concerning corporate goals. It is therefore important to note that an information system allows an organization to execute its business strategy.
In essence, companies need to have a clear understanding of their long-term and short-term information requirements through the incorporation of appropriate information systems in their business operations. Business strategies ought to determine organizational and information strategies. As seen in the Google case, the company’s business strategy of expanding its search capability determined the way in which it implemented an e-commerce website. The company has been able to focus on customers’ preferences and thus designing a site that makes customer experience fruitful.
References
Efrati, A. & Morrison, S. (2010). “Google Jumps Into Fashion E-Commerce.”The Wall Street Journal. 18 November 2010. Web.
Pearlson, K.E. & Saunders, C.S. (2009). Strategic Management of Information Systems. (4th ed). New Jersey: Wiley.
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