A very interesting and in-depth article about ERP and why you should consider using it. A very good read that gives a lot of good information.
ERP combines software systems from departments like finance, human resources and warehouse management. It combines it into a single, integrated software program running off a single database. This way the various departments can more easily share information and collaborate. It’s a tall order, but that integrated approach can have a tremendous payback if companies install the software correctly.
Purpose of Information Systems
Information Systems (IS) are to help you and your company to find new strategies in order to gain competitive advantage in your industry. One way to do this is through adapting IS in your business. IS helps the organization to use its data, reduce workload and assist compliance with mandatory regulations.
3 Roles for IS
Information Storage and Analysis
Companies now use more advanced databases that contain all types of data about what they do. IS can store, update and analyze the information. From all the information that the agency has, they can figure out new solutions to both current and future problems. Information can also be integrated from different sources both in and outside of your company. This allows you to keep the company up to date with both internal performances and external opportunities or threats.
Assist with Making Decisions
Information Systems are all about helping you to make strategic plans for your business. The management team uses the information gathered to create plans and decisions for longevity and making more money. You use IS to measure and test all the information gathered from all sources. The analysis and comparison of market trends helps you to decide if your strategic decisions made are both adequate and are good quality.
Assist with Business Processes
IS helps businesses to create more value based systems for your company. Information Systems are integrated anywhere to measure out where tasks will make that department run better and for less money. Or it can make sure that everyone follows whatever regulations each department needs to follow to stay in compliance with government laws. It both simplifies business processes and gets rid of unneeded activities. They also add controls to employee processes. This in turn makes sure that only the ones who need to know have access to certain tasks. IS gets rid of repetitive tasks, increases accuracy and leads to better project planning and implementation.
Implementing new systems costs a lot of money. It includes not just the installation but also employee training sessions. Some employees might even resist the changes being brought on. This in turn can hinder your operations and employee turnover could increase. Just make sure to have strong leadership in place when doing this. It will help guide employees and managers through the transition while weighing cost against benefits to see if you would really like to do this.
Smart cities are becoming more and more popular now. By 2050 they will be so popular that more people will live in them than out of them. I find them extremely interesting about how they can help society.
Think of how they help the environment, populated areas, and traffic. They will be instrumental in the future to creating new technologies for solar power, finding new water sources, and pollution control. Exciting times are coming. I can’t wait to see what it brings us.
Business Intelligence and Analytics
What is the biggest challenge today for upgrading your business? You’ll find the answer through using tools enabling business intelligence (BI) and analytics strategies. It seems that businesses are looking to adopt BI and more advanced analytics to achieve bigger gains. Upper management needs to explore more information to gather key areas that they feel need improvement.
The Biggest Challenges:
- Data Preparation – The ability to complete data management in putting together and cleaning data before compiling reports and analytics.
- Skills and Leadership – Is there a structure focused on needs of both BI and analytics along with more complex methods?
- Ease of Use – Can those who are less technically inclined be able to use the system?
The biggest gaps are in data prep. It is more difficult and more complex than it seems. The size of the company and how they are using BI and analytics doesn’t matter. They all see big gaps in how they filter, transform and prepare their data. Good data gathering and compiling is completed. It helps find both relationships and potential outcomes quickly. The information found here will help improve your company’s productivity and build competitive advantages. Consider automation and self-service also for those in the agency who are less technically inclined. Analytics are behind BI. Improvements are needed to be able to prepare, augment and explore the data gathered. This will help your agency to find root causes and trends. You can then build and update predictive models through using machine learning.
Skills and Leadership
Skills and leadership are key too. Agencies strong in these areas still say that there are many challenges in innovation, creativity, and leadership. Shown executive support enforces the need for upgrades or change just will not happen. If there’s no strong vision and support at this level, the initiatives will fail or underperform. A leader needs to make sure that they openly show the value of success from the new initiatives.
Ease of Use
Overworked data scientists or analysts already in your company because of changes being implemented need help. In this case, it’s better to create self-service and interactive tools where everyone can find them. Nontechnical users will need the guidance, and instead of overworking your data scientists and analysts, this can help. There’s software built to aid building systems that can detect relationships, correlations, segments, and outliers. It could use natural language to create queries. It could present context-based narratives of important findings. All sorts of things could be created with the new software to help the organization.
Increasing adoption of BI and Analytics
- Invest in data and data prep
- Nurture culture, skills, and leadership
- Keep self-service and Ease of Use in the Forefront
If the challenges of gathering and preparing data are not addressed, it will become more difficult to find a use for BI and analytics. If strong leadership isn’t used to make the employees excited to use the new technologies, the initiative will be a failure. And if ease of use with smart/automated capabilities isn’t used, it’ll hinder adoption of BI and more advanced analytics. Consider these things before upgrading your systems.
Strategic Information Systems
Strategic information systems (SIS) are used to support and shape business competitive advantages. SIS is defined by its way to be able to change how business is conducted. It is not classified by structure, functionality of areas, or support systems. Anything that is used to change goals or processes of companies add competitive advantage, therefore becoming strategic information systems.
The competitive strategy is how the company is going to compete in the future. What the goals will be, and new plans and/or policies needed to implement everything. The advantage is being able to measure cost, quality and speed over competition. SIS assists businesses gain the advantage through adding to strategic goals of organizations. It is also measured through the increase in performance and productivity, therefore making them more powerful than the competition.
The digital economy is affected all the time as changes in technology occur. This causes change in business models in order to keep up. The core business isn’t changed to keep up with the digital economy even though it feels like it has. For the most part, businesses use the tools offered by the Internet, but nothing else. There are two questions to ask here…
Where does my competitive advantage come from in my business and industry?
How can information technology and the Internet help?
How is SIS Looked at Now?
Most companies consider SIS more of an outwardly focused tool. It aims at increasing direct competition and is visible to all. Now it is more used internally. It focuses on employees’ productivity, smoothing business processes, and helping to make strategic decisions and isn’t visible to all.
Role of IT in Strategic Management
- Innovative Applications
- Competitive Weapons
- Changes in Processes
- Links with Business Partners
- Cost Reductions
- Relationships with Suppliers and Customers
- New Products
- Competitive Intelligence
How To Use The Internet As a Tool
The Internet is the most important tool in competitive intelligence. It is so easy to look up information on the competition. The information that is gathered then can be analyzed further by what is called intelligent agents and data mining. Both deal with software products to help them do their job. Here are some ways to do research on the competition:
- Review Competitor’s Web Sites
- Analyze Related Electronic Discussion Groups
- Examine Publicly Held Financial Documents
- Market Research on Your Own Web Site
- Use Information Delivery Services like My Yahoo
- Use Corporate Research Companies
There are numerous other ways to gain competitive advantages over your competitors. The key is to gain and maintain a sustainable strategic advantage that can be held for years to come. It is suggested that people, technology and shared risk and responsibility will help keep the advantage now. It is so difficult to otherwise as there is so much innovation occurring now.
A very exciting time in your company might be when you realize that you have to upgrade your systems to keep with the times. It can be very frustrating and can take some time too depending on what needs to be updated. There’s a lot that has to go into the thought process before starting…
- The company in question always has to have the latest and greatest, who change their systems as soon as upgrades become available.
- The company in question goes through more traditional means. Why change what they have when it’s working perfectly fine? These companies upgrade only when forced to do so.
The upgrade plan has to focus on future growth and changes forecasted by the company. The question that needs to be asked when looking ahead is, how will the changes affect upgrade needs in the future?
Five Steps to Planning Upgrades
1. Categorize and Prioritize: Categories include
i. Client Computer Systems
iii. Client Software
iv. Server hardware and software
vi. Network devices
vii. Network Infrastructure
Here items can be picked and chosen as to what the organization decides to upgrade. In this if needed subcategories can be created in order to create a more organized plan.
2. Set Priorities: Prioritize based on the costs and benefits ratio. What items need to be upgraded first? Is it an urgent need or a want? Make sure to not upgrade needlessly, make sure that it’s really needed.
3. Consider Dependencies: When the company is upgrading their systems they need to take into consideration what might be dependent on others. This might create more upgrades in order for the system to work with the new equipment. Or if applications are being upgraded, the system might need to be upgraded in order to work with them.
4. Phased Rollout: Don’t rush it. Testing and discovering of bugs need to be worked out before starting to use the new system. After the tests are completed use small groups of employees to test the upgrades in the production environment. If there’s a learning curve use the fast learners first as they can then learn the new system and assist/teach the others when it rolls out.
5. Keep it Scalable: Write out the plan. Get input from other departments and different levels to help create the plan. Plans for expansion of the company and any restructuring needs to be taken into account here too.
If the organization follows proper planning with scalability included in the process, it can create a very smooth upgrade environment for the company. It would help immensely as upgrading systems can be very costly and stressful if not done correctly. Never rush the process and take time to consider all options before jumping in.
Define Enterprise Agility
To be able to operate and be strategic, there are tons of factors to consider. Hyper-competition, higher demands from customers, advances in tech and changes in regulations have to be considered when upgrading. There’s something called enterprise agility. It’s comprised of two things. Being able to sense what is going on and respond to it. The timelier the response, the more likely the company will succeed in difficult times. Dynamic capabilities are included here. One has to consider how to build the new system that will respond to the new environment. In order to keep up with competition capabilities have to be able to adapt to new changes.
Market orientation deals with market intelligence focusing on new and current customer needs. The information gathered will be spread across all departments so there can be company-wide responsiveness to changes. Absorptive capacity deals with how well the company assimilates, transforms and uses the knowledge gathered. Strategic flexibility is how well the agency manages both economic and political risks to market threats. It also looks for future opportunities. The flexibility has to include both reactive and proactive approaches to problems. Organizations need to be watchful for and respond to competitors’ actions. They need to look at consumer preferences. There has to be a focus on economic shifts. The agency needs to look out for changes in regulations and advances in technology too.
The Role of IT
The role information technology (IT) plays in this is very important. Responses are completed through direct and indirect means of digital options. Through direct means IT can anticipate and sense changes dealing with businesses. IT systems help as sheer volume of information processed goes further than can be handled otherwise. Indirect means are more pronounced though. This is where product development, manufacturing and supply chains add to performance of the organization.
Digital options can be considered indirect too due to them being work processes and knowledge systems. Knowledge reach is the comprehension and accessibility of codified knowledge available. If the system is built correctly it can help companies to gather and use the knowledge gained. Knowledge richness is when IT gives out high-quality information in a timely manner. IT also reviews real-time pattern recognition and monitors data. It helps create strategic scenarios assisting strategic decision making. Process reach is when IT integrates customers, suppliers and partners internally. The richness of these processes are improved by quicker timeliness of delivery. They become more accurate and relevant.
Depending on how the new systems are deployed and managed, IT could hurt as well as help businesses. The older the technology being used means responses could be limited by the range available. Everything would have to be updated, not just programming. Systems might restrict the ability to retrieve and interpret data being gathered for analyzing. Or processes could be incompatible with new systems. This would mean that they would have to be upgraded. It’s up to the firm as to how well IT is going to work for them if at all. Agility is the ability to respond quickly to change that comes up. The company has to understand the updates in order to create and implement them correctly. If not, they could fall behind from their competition even more.