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Management Information Systems & Business Strategy of the Firm

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Introduction

Management Information Systems & Business Strategy of the Firm Introduction It is generally held that companies are attempting to redesign workflows and business processes in order to achieve substantial productivity breakthroughs. Formulating Enterprise Systems plans should be at the top of management's priorities (Class handout). Successful Enterprise Systems are not easy to develop and implement. They may require major changes in how business operates internally and with external stakeholders. Sustained success depends on many environmental and fundamental business factors, and especially on the actions and strategies of a company's management team. Thus, developing strategic uses of information technology is a major managerial challenge. The internet and technological advances in communication speed permit consumers and retailers to communicate with one another rapidly, at any hour, any day of the year. The growth and strengthening of the global economy has fashioned a fast paced environment where an organization must be efficient/provide value to remain competitive. Companies are devoting significant resources to producing or purchasing CRM solutions. Creating software and communication platforms has become so important firms have specialized in producing e-commerce solutions for business-business (B2B) retailers such as SAP. To succeed in the digital economy, organizations must manage the integration of business, technology, people and processes not only within the enterprise but also across its boundaries. Whereas an enterprise system focuses on internal-enterprise business processes, a supply chain management system facilitates connection to external value chains. Although these systems can bring benefits and competitive advantage to organizations, the management and implementation of these systems pose challenges to organizations. Hence, one aim is to develop an in depth understanding of these issues, and to propose and provide solutions to address these management and organizational issues. ...read more.

Middle

Despite the hype, few firms need perfect information in their customer relationships. If a customer does not value these processes, why pay for them. Real-time information should be driven by real-time opportunities. Thus, companies must distinguish between activities that demand perfect information. Managing CRM Planning - Planning Justin Carter proposes "accountability" for IT ensures planning is truly business based. Organizations achieve accountability by approaching the formulation of technology based systems as an investment decision. Focusing attention on the cost/benefit of implementing a system delegates responsibility to relevant managers. Viewing the CRM systems as an investment underscores the need to yield a positive return at an accepted level of risk. Thus, assessing the costs, risks and benefits will directly links CRM to planning. The ERP does not become part of a business strategy just a quantifiable goal. Secondly, as an investment, the CRM plan must cover all investments that will contribute returns. Lastly, delegating responsibility for planning CRM requires coordination. An ERP/ES and IS plan will facilitate coordination in an organization (Carter, 1995). Traditionally, CRM planning has focused on the development costs of software and hardware. The majority of CEO's felt their CRM platforms did not produce significant returns (Dixon, 1999). Without a framework to create and assess CRM plans, less obvious investments such as support, maintenance, and staff reactions to IT, businesses were unable to properly "invest" in CRM and "realize" large returns (Dixon, 1999 & Carter, 1995). Returns cannot arise from IT investments alone, returns arise from business (Carter, 1995). Moreover, developing a new CRM, a sociotechnical entity, is a form of organizational change affecting work processes, management and the organization. Data Mining Artificial intelligence is making a comeback to the mainstream of corporate technology. ...read more.

Conclusion

It is not that technology is changing how businesses do business; it is that information systems have changed what business seeks to sell. The measure of returns, while important, is not the way to compete. It is what you are selling. A new paradigm model for business has been created for an industrial service and knowledge based industries. It should be noted that various countries possess different industrial stages as they progress from tertiary to manufacturing to service to knowledge. In addition, these countries with various industries have integrated as technology has moved manufacturing offshore. Thus, businesses must adopt the correct business model given their industry, that is, a manufacturer must run his business differently that a knowledge firm despite that they work together to produce a specific good. An analogy would be Ford designing cars and not producing them while contracting-out all of the manufacturing of cars. Creating new information systems for an organization requires more than innovative missions, visions, and approaches. Firms, especially digital firms, require systems planning and systems analysis based on a broader view of the organization, a view that includes business strategy extended beyond accounting boundaries (Value). Firms must now coordinate their business strategies and information systems plans through electronic relationships with suppliers, distributors, and customers (Fingar, 2000). Both, Noy's and Raynor's frameworks are better viewed as a circulatory framework. This clarifies how the IS and business strategy are linked to mission, vision, and key compentencies. The circular framework purposefully enables executives to better understand that although these facets are steps in a process, it does not matter whether the chicken or the egg came first. Further, the notion of a circular framework addresses the needs for clarity at the managerial level despite the interrelatedness of values and mission concepts. Together, Noy and Raynor illustrate the how the mechanics of formulating an information system support business strategy in achieving vision and mission. ...read more.

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