An Information System is the collection of components that process, store, collect, and distribute information to help in organizational decision making and control. In relation to business, this is a system of value-adding processes for disseminating information to be used by management in making decisions that promote performance and profitability.The success of a company in the current dynamic business world is dependent on how quickly they respond to environmental changes (Reichert & Weber, 2012). Business Information Systems (BIS) propagate lasting organizational competitive advantages by integrating business processes with Information Technology (IT). This report provides an analysis of key issues relevant to Axel Construction’s initiative to enhance and upgrade their IT infrastructure and BIS.
A business process may be defined as the pool of activities that collectively add value to the organization.It is simply what thebusiness undergoes on a daily basis toachieve its goals or objectives. Business processes are wide-spread and usually cover various departments in an organization, or even cross the organizational boundary to include stakeholders such as customers, suppliers, and partners. Organizations can acquire resources they need to re-energize performance, innovate and deliver the value demanded by today’s market by prioritizing business processes. Incorporation of information systems into the business processes effectively minimizes the gap between execution of decisions and management intent(Smith & Fingar, 2003, p. 1).It is therefore prudent for Axle Construction to understand and improve its business processes.
The effectiveness of a businessis analyzedon the basis of their processes. Some organizations even evaluate their processes as a competitive advantage strategy. Incorporation of information systems can improve Axle’s processes and set the construction company apart while lowering operational costs. Information systems make relevant and useful information readily available to its users. The management team of Axel construction company can obtain updated and comprehensive information necessary to make quick decisions that will help the firm respond to business challenges. A smooth and efficient system with further cut down on unnecessary expenses incurred as a result of misuse, misappropriation, and fragmentation of company information in non-integrated systems. Furthermore, information systems will improve the current processes by providing a monitoring and evaluation platform that will help the management pick out redundant or inefficient aspects.
Although information systems pose a lot of advantages and benefits to the growth of organizations, there are some crucial challenges faced by managers especially in Small to Medium Enterprises (SMEs). The first challenge a manager may encounter is to do with the designing and building of the system. With the management being faced with cost and functionality questions, they have to make carefully informed decisions. They need to determine the need and purpose of the system. Once an appropriate information system is in place, the next challenge is to ensure its integration into the business. To establish the system, both the management and employees need training on the functionality of the system. The final challenge lies in cost accountability and maintenance of the information system in a manner that continuously aligns with the organization’s objectives(Kautz, Madsen & Nørbjerg, 2007, p. 220).
Challenges that the management of SMEs facewith regard to Information Systems may alternatively be categorized into investment, strategic decisions, globalization, ethical andsecurity challenges.A basicchallenge encountered while building or operating an information system is related to value addition. Managers have to carry out cost-benefit analyses to determine whether the system is a viable investment idea. This decision should take into account both the long term and short returns on investment. In strategic decision making, the management has to determine the complementary assets required for the information system to function effectively. Likewise, the infrastructure of the information system should be able to accommodate their goals in an environment with rapid technological and market changes. Globalization challenges require the SME to understand and adjust to the world economy. In a digital world, ethics and security are always a challenge to the management of organizations. The management must, therefore, put in place safeguards to prevent loss or leakage of crucial information to competitors.
It is prudent for organizations to realize that to gain a competitive advantage, they must look into their processes and consider the possibility that their business mechanisms may be outdated and inefficient if the current market. While putting this into consideration, Axle construction should keep up with the level of competition and consider theintegration of updated and relevant information systems such as the ERP system, the CRM system and the EAI systems.
Enterprise Resource Planning (ERP) Systems standardize, integrate and automate business processes to enhance planning and control. A defining characteristic of ERP systems is the consolidated database that gathers all relevant organizational data into one complete system. An ERP system is founded on a database that caters for decision making and operational needs of the organization(Bradford, 2015, p. 2). Employees of Axle construction from different departments such as manufacturing, accounting, purchasing, and sale can access any information they need from the same data source. ERP systems, promise various benefits that may give Axle construction competitive advantages over other market players. The systems can help increase revenue by reducing operational expenses. Thisis achieved through improved customer service and marketing, lower inventory costs, and enhanced revenue generating processes. The single system integration also allows for effective monitoring and evaluating while enabling the management to make quick and informed strategic decisions that put Axle construction ahead of thecompetition.
Customer Relationship Management Systems (CRM) are information systems that coordinate business processes revolving around an organization’s interaction with customers in marketing services, sales, customer retention, and satisfaction. The system allows users to evaluate or manage customer-focused marketing campaigns through channels such as telephone, direct mail, e-mail, wireless messaging, and social media. With companies depending on technology for day to day activities, the need to unify the separate applications into an integrated set of processes has become a priority. Enterprise Application Integration (EAI)is the activity of consolidating and modernizing the various programs or systems in an organization’s information system infrastructure. Linthicum (2000) describes an EAI as an age old process of integrating applications in a firm in a manner that allows them to share processes and information freely. EAI reduces costs and time that would have been lost in disparate applications.
This is an information system through which information and other content are shared in a social network. Axel construction can use social media to form relationships with employees, customers, and partners through productive interactions. SMIS help with organizational strategy by creating a platform through which the company can inform people in the network, influence them and build a conformity to the company’s ideals. Presence in social media strengthens relationships, increases the number of target customers and even connect an organisation to partners. SMIS has allowed sales of many companies to appreciate greatly. The system supports sharing of information among the community, users, and social media providers. The first step must be doing appropriate research on the system and the market. This necessary to position Axle using its core competencies and objectives. So as to implement SMIS in Axle, it is important to establish a social relationship between the organization and the target customers. This relationship may be created throughcrowdsourcing or Social CRM. An effective marketing and user engagement policy are the use of stories and repetition. Fruitful interaction will help build a brand image and boost the company’s sales and profitability. The final step in theimplementation of a successful SMIS in Axle would be to develop a social media policy for the company. The importance of SMIS in today's digital market is demonstrated by companies such as Bruce Clay and Newpath WEB who have successfully used SMIS to boost their revenues.
In conclusion, for Axle construction to enhance its collective performance, the company should embark on effective integration of their business processes. In order to achieve this, Axle construction company can leverage some possible information systems in a bid to position itself competitively. Effective implementation of the ERP, CRM, and EAI systems may enhance the competitive advantage of the company. These information systems should be enforced only after careful investigation and consideration onto their compatibility with Axle’s business processes. In addition to the above Enterprise systems, the company should consider boosting sales through SMIS.
Bradford, M. (2015). Modern ERP. 3rd ed. Morrisville, NC: Lulu, p.1-10.
Kautz, K., Madsen, S. and Nørbjerg, J., 2007. Persistent problems and practices in information systems development. Information Systems Journal, 17(3), pp.217-239.
Linthicum, D.S., 2000. Enterprise application integration. Addison-Wesley Professional.
Reichert, M. and Weber, B., 2012. Enabling flexibility in process-aware information systems: challenges, methods, technologies. Springer Science & Business Media.
Smith, H. and Fingar, P., 2003. Business process management: the third wave (Vol. 1). Tampa: Meghan-Kiffer Press.
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