INFORMATION TECHNOLOGY MANAGEMENT: DELL.COM
IntroductionThe meaning and application of computer in the business undergone different development and changes, in the beginning, computer is used for computing, as of now, computer is being used in different aspects and units of the company, from the company’s connection and relationship with the customers up to the different processes and flow of information and data in the company. As a result, currently, application of IT is considered as one of the most important strategy applied by different organizations. This enables companies to have competitive advantage, which enables them to have error-free and efficient system which enables to improve its productivity. Currently, one of the most important developments in implication of IT in business world is the Internet. This enables companies in different companies operating in B2C, B2B, C2C and C2B manners enables to focus on the different opportunities including the unlimited number of possible market, together with the different strategies and programs to be implemented that are related with marketing and human resource marketing by applying the Internet supported by different online and offline systems.
This paper will focus on analyzing the applications and roles of Information Systems in Dell.com. It will focus on the different models and processes inside the company, at the same time, focuses on the different ethical and security issues in application of the Internet in the company. The main reason why Dell.com was chosen as the case to be assessed and evaluated is because Dell.com had been able to establish its name and image in the entire online market, which enables the company as one of the most respected online and traditional business. Aside from that, the author also believes that there are adequate information and data that will can be gathered and used from reliable textbooks, online articles and journals. Therefore, it can also help the authors to finish the paper on time and correctly.
Role of Information Systems in the Way the Organization Runs its BusinessThere are 3 main types of interactions of business models which include business-to-consumer (B2C), business-to-business (B2B) and business-to-consumer (C2C) All of these are using different information systems in order to runs the business processes and flow of information and data. B2C pertains on the process of selling products directly to the customers. IS enables the company to focus on improving the different primary transactions which include the receipts and invoices to be offered by the company. The same features can also be used in the B2B model, or the relationship between two or more businesses, however, this is more important, because IS enables the company to maintain its connection with the largest customers. IS enables C2Cs to maintain and store data that are connected with the members of the given business, which enables to ensure safety of the members. This is important because it can affect the image of the company that are offering this kind of service.
Internet Business Model in Dell.ComA business model is commonly defined as architecture for the product, service and information flows, which include business actors, potential benefits as well as sources of revenues or as a method for managing resources to offer better customer values and make money (Bauknecht & Pröll 2005). One of the most important aspects of the company is its business model or known as the direct relationship and communication with the customers. This business model enables the company to have competitive advantage compare with the indirect sales model. Conventionally, computer manufacturers trade their products by retailers. The company created a cost-efficient way of selling its computers by cutting out the middle man and selling their computers directly to the customers which enables the company to save 3% to 5% in inventory. Aside from that, Dell only produce computer when the customer requests and pays for the specific item. The company is operating using the business model types: B2C and B2B. B2C pertains on the company transacting with the customers, Dell is offering products and services to individual customers, particularly those that are interested in availing computers for their personal and family use. On the other hand, B2B refers to one company transacting (buying and selling goods and services) with another company (Laube & Zammuto 2003).
The business model of the company was improved by the Internet which enables to make it easier for the customers to connect to the company in direct manner. As a result, many of Dell’s competitors such as Gateway and Compaq copied the business model of the company. Other companies are also experimenting business models that is similar and adapted from Dell’s, including Rod and Toyota in order to know more about the customer specifications and McDonalds in order to produce more food and services that are connected with the orders of the customers. Thus, the company is focusing on the connection of the social rights and the computer which include right to privacy, accuracy and property.
On the other hand, even though the company is offering products and services through the Internet, Dell also focuses on maintaining its connection with its offline group of customers. This is important because although the company already established its name and brand in e-business, it is important to consider the fact that there are some customers that are not that familiar and comfortable in online buying and purchase. As a result, Dell maintains its connection with the offline community by partnership with Wal-Mart. In 2007, Dell move out into retail by partnering with Wal-Mart to sell a couple of the company’s desktop computers in all of 3,500 Wal-Mart as well as Sam’s Club locations in the entire U.S., Canada and Puerto Rico (Melanson 2007).
Information Systems Used in Dell.Com and the Roles of Enhancing Decision MakingThe largest growth in most of the economies is from the information industries. The success of those industries is because of the support of the information systems. In addition, because of the threats and opportunities being offered by the technological change and globalization, most of companies are focusing on information systems (International Graduate n.d.). Information systems are the software and hardware systems that are supporting data-intensive applications (Shasha & Vossen 2009). Thus, information systems are more than just computer programs, it pertains on the wider systems of people, data and activities, together with the computer-based and manual that helps to gather, process, store and distribute information about the organization in effective manner (International Graduate n.d.).
In order to maintain its performance and efficiency, Dell is implementing and maintaining different information systems. This enables the company to focus on the different processes of the company, together with the different data and information that are needed in the process of decision-making. The following are the information systems implemented by Dell:
- Executive Support System. Executive Support System (ESS) is being used in Dell. It is designed in order to help the senior management to make strategic decisions by gathering, analyzing and summarizing the key internal as well as external information that are used by the company (Tutor2u n.d.). It focuses on data mining, the Internet, blogs, podcast, executive dashboards and other technological innovations that are related with the overall profitability and direction of the company. Thus, this system enables to focus on the overall vision of the company, support strategic planning, strategic organizing and staffing, strategic control and crisis management. Therefore, it supports both the B2C and B2B connection of the company by improving the overall performance of the company, particularly regarding focusing on the customers’ current needs and demands.
- Management Information System. Management Information System (MIS) is a system that offers the managers and employees with the information that they need in order to do their job in effective manner (Pride & Hughes 2009). Thus, it helps in the routine process of decision making (Riley n.d.). In the company, MIS is built around a computerized system which focus on record-keeping and communication software. MIS is used by managers based on their information needs that are listed below:
Manager
Information Needs
Financial managers
Internal: debts, receivables and accounting information
External: economic situation, interest rates, future business conditions
Operations managers
Internal: present and future levels of sales, inventory levels, finished good, availability and cost of resources
External: innovation and technology
Marketing managers
Internal: pricing strategies, new promotional campaigns, test marketing, customers, market share, innovation.
External: social changes, legislation
Human resource managers
Internal: wage levels, benefit packages
External: current legislation
Administrative managers
Internal: coordination of resources and financial aspect
External: security
- Transaction Processing System. Transaction Processing System (TPS) is designed in order to process different repetitive transactions in efficient and accurate manner (Tutor2u n.d.). The following are the TPS that are used in the company:
- Billing system for invoices and receipts;
- Payroll system for salary of employees;
- Production and purchasing system for requirements of computer parts; and
- Ordering system for accepting and monitoring orders from the customers;
In connection with this, the database used in the system was Oracle, SQL, Sybase as well as DB2. This enables the company to focus on the different advantages and limitations of the different databases to be used.
Integration of Online and Offline CommunicationsDell is considered as one of the companies in the world that have been able to implement both the offline and online business models. As a result, the company has been able to gain competitive advantage because it enables to target both the online and offline customers. The online and offline communities are totally integrated, because of the different systems and software that are being applied and used in the company. Particularly, the company’s integrated website enables to target the customers, at the same time, the partnership of Dell with Wal-Mart, which is considered as the largest retailer in the US, enables the company to be connected in both society.
Internet Business Model Applied in Dell.ComDell.Com is a B2C and B2B e-commerce, where in it focuses on offering their products and services towards individuals and groups of people for their personal and business reasons. The company is considered as a storefront, where in it sells physical products directly to the customers or businesses.
Benefits of Internet that are Different from Traditional MethodsThere are different benefits and advantages that are being offered by the Internet that cannot be obtained or gained by using the traditional methods. In terms of ethical and privacy, the Internet, enables the company to focus on maintaining the privacy of its customers, by applying different types of software and applications which will help in order to ensure that the information of the customers will remain confidential. This is important because even though there are different risks in the Internet, because large online companies want to maintain their good brand image, they tend to focus on improving the said aspect. In addition, in terms of security, it is much easier to maintain the security of data that are stored in a database, with a strong security support by programs and applications, than to secure data and information located in the filing cabinet. Therefore, with the use of the Internet, the customers will be able to track and monitor the progress of their orders, which is not that possible with the traditional method.
Management Challenges in Dell.ComBecause Dell is operating in different business model, particularly the use of e-business, there are different challenges that can be encountered by the company. It is important to consider that most of retailers hold back their best-selling waves because of their fear of cannibalizing offline sales and cutting price margins. As a result, failure to clarify ownership as well as strategy issues between the IT as well as the marketing departments is considered as one of the major reasons for this problem. It is also important factor to consider that, implementing an e-business needs great connection with the different stakeholders, at the same time on the different units and departments of the company. Lack of communication and management collaboration between the website and the employees in the store as well as the separate channels in order to fulfill orders and focusing on the customer and process problems can cause failure. Based on this, it is important for Dell to focus on the needs of their customers, at the same time maintaining the good flow of other parts of supply chain (Kalakota & Robinson 2001). Based on this, the primary management challenge to be faced by Dell is to focus on the connection and integration of the different processes and aspects in the company, which include their connection with the customers, at the same time, maintaining good relationship with the suppliers, together with the good communication with the employees, which are the most important resources of the company.
Knowledge ManagementKnowledge management is considered is considered as one of the most important strategies to be implemented in order to influence the intellectual capital in the entire organization (Frappaolo 2006). Knowledge management is considered as the structure where in the organization perceives all of its important procedures that are connected with the business process. This is important because of the fact that the industry and the market where in Dell is operating is being affected by different internal and external factors, which can be considered as threats and opportunities that can cause advantages and disadvantages for the company. Dell focuses on knowledge management, like other practitioners, the company assume that knowledge is considered as the most vital resource to the organization because it is not replicated by rivals, which make it the key source to the uniqueness or competitive advantage (Davenport & Prusak 1998).
As part of this, Dell focuses on the human process which pertains on the intellectual assets of the employees. This includes leadership, organization, technology and learning. By 1995, training had been a vital part of the company’s strategy. A centralized corporate team was formed in order to establish processes for training development and administration. The training organization operates as a federation which includes three parts: Corporate Training, Regional (HR) Training and Regional (non-HR) training that are held together by the senior management team and different councils of Dell Learning (Cone 2000). Thus, the knowledge is being managed intensively and in centralized manner, in order to ensure that all of the information will be given to the employees who need it.
e-CRM Implemention
On the other hand, Dell is known for its intensive relationship with the customers. Customer Relationship Management (CRM) is considered as a comprehensive business and marketing strategy that integrates technology, process and other business activities around the customer. The rapid growth of the Internet creates a new concept: e-CRM which mainly relies on the Internet or web-based interaction of companies with their customers (Yang & Webb 2006). The website of Dell is interactive, meaning customers can connect to the company by just simple logging in with their customer account, and they can ask for help and inquiries which will enable them to be informed about their questions. Dell offers different e-CRM solutions which give the customers different ways to contact service representative including e-mail and Voice over IP (VOIP) calls, which help to reduce the load on service personnel by helping customers to help themselves and automating customer support procedures (InfoWorld 2000).
This system is being maintained, by ensuring that all of the information in the database are all updated. Thus, an employee is positioned in order to come up with the different changes in the environment, particularly regarding the changes in the performance and offerings of the company.
Summary and RecommendationDell is considered as one of the most successful companies in the IT industry. The company have been able to offer products and services through their customers, whether individual or corporation. This success is because of the different technologies, management practices and strategies that the company has applied for its entire operation. First is its implementation of a new type of business model, which enables the company to save money and effort by removing the third party. As a result, the company has become successful in their connection with the customers, and currently, many competitors and other companies in other industries are implementing strategies and business models that were patterned in this business model.
Aside from this, Dell is also innovative, focusing on the different benefits of applying different technologies, including the application of different ISs, including MIS, ESS and TPS, which enables the company to focus on the different data and information that can help them in the decision making process, which include the future sales of the company. On the other hand, the company also took advantage of the growing popularity of the Internet by using it as its primary platform for its marketing effort. By doing this, the company have been able to create or establish its business in the online community, which is very important because of the current changes in the preferences of the customers, particularly in America and other European countries. However, like any other companies, Dell is also facing different problems, which mainly focus on centralizing its marketing and management efforts, particularly because the company is operating both online and offline manners. Based on this, it is important to focus on maintaining the good flow of supply chain in both marketing process. It is vital to focus on maintaining centralized communications between the different departments and units of the business, at the same time, focusing on the changes in the internal and external environment, which will focus on the changing demands and preferences of the customers as well as the suppliers.
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Appendices Appendix A: Business Model of Dell
Credit:ivythesis.typepad.com
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