Introduction
According to experts, specialists and computer company sales force, we are in the middle of a new “Information Age”, one that will transform and transfigure how workers work, how companies vie, perhaps even how thinkers think. Few managers will admit to technophobia; with all the money spent on new equipment, no one wants to be insulated and being lagged behind. Our fascination with technology has made us forget the main purpose of information, which is to inform people. All the computers in the world won’t help if users aren’t interested in the information generated. All the telecommunications bandwidth won’t add a dime of value if employees don’t share the information they have with others. Expert systems won’t provide useful knowledge if the knowledge changes too fast to maintain or if system designers can’t even find experts willing to surrender what they know. Information and knowledge are typically human creations, and we will never be good at managing them unless we give people a primary role. The status quo approach to information management is to invest in new technologies. Instead managers need a holistic perspective, one that can weather sudden business shifts and adapt to ever-changeable social realities.
Information system is a business application of the computer. It is made up of the database, application programs, manual and machine procedures and includes the computer systems whose job is to do the processing. First, the database amasses the subjects of the business, which is the master files and its activities which is the transaction files. The application program then supplies the data entry, updating query and report processing. The manual procedures take record on how data is acquired for input and how the system’s output is dispersed. Machine procedures then instruct the computer how to perform the batch processing activities, in which the output of one program is automatically fed into another program. The daily processing is the interactive, real-time processing of the transactions. At the end of the day or other period, the batch processing programs update the master files that have not been updated since the last cycle. Reports are printed for the cycle’s activities. The period processing of an information system is the updating of the master files, which adds, deletes and changes the information about customers, employees, vendors and products.
Modes of Enquiry
Inductive-Consensual
Inductive-Consensual mode of enquiry is an approach that enables us to have an outcome based on a limited set of observations. With these formulated observations, only one conclusion must be considered. In this method, there are three kinds of analysis that may be used: analogous, historical or multiple independently sourced. Herein, the decision maker must first formulate a problem, after which, a set of observations or plausible solutions can be provided.
In decision making process inductive-consensual may be useful in many ways. One of the optimistic attributes of this mode of enquiry is it enables the decision maker to determine a concise observations relevant to the given situation or problems. With these observations, the management or the decision maker may be able to concentrate on the formulated observations. In addition, by merely evaluating each observation, the decision-maker can easily identify which observation will definitely topped the other. Furthermore, inductive-consensual is also a tool which can easily be used because of its simple approach for decision-making process. With this, the most effective solution or observation can easily be noticed and the management can decide easily.
Although, inductive-consensual has many advantages, there are also some characteristics of this mode of enquiry which can consider as its weakness. Since, the observations are limited only to the decision-maker perceptions; other factors might not be included to be assessed or evaluated. Hence, this can be seen as one of the failure of inductive-consensual approach. In addition, another disadvantage of using this mode of enquiry is that, the decision-maker may have a tendency to choose a certain observation without any justifications. In this manner, this may result to create bigger and complicated problems. This only implies, that the use of inductive-consensual will not be successful if the decision-maker will not be able to gather as much evidences needed to justify each observations.
Analytic-Deductive
Analytic-Deductive is one a mode of enquiry which views the world as formula. This enquiry often highlights logical consistency. This method believed that everything leads only to one answer, i.e. the truth. The main attribute of this method is its ability to break down the issues into different part through reductionism, which is helpful in identifying a plausible solution. This enquiry attempts to analyze the issue base on the categories part, to be able to get some insightful details and solution parts by parts.
The use of numerical computations or mathematical formula for the analytic-deductive mode of enquiry makes this method an organized and standardized one. Compared to the inductive-consensual method, this is less subjective as figures or values are used to analyze the problem, making the derivation of the conclusion easier as well as more objective. Inaccuracy due to errors is also less to occur as the results are basically dependent on the formula used. An analysis supported by figures is easier as well as more credible. Through the use of a mathematical formula, the decision-maker or the problem solver could presume the preciseness and correctness of the answer or conclusion.
Mathematical formulas are not as flexible when applied to different issues or problems in various fields, such as within the business sector. It is difficult to find the right formula for specific issues; thus, the analytical-deductive method may not be used as effectively in other cases. Moreover, the accuracy and correctness of the conclusion derived from the computation is dependent of the efficiency of the person who solved it. While subjectivity can be reduced by using this method, human error committed during the computation is still likely to take place. Aside from errors in computation, error in mathematical formula selection can also happen. These possibilities can greatly affect the outcome of the analysis as these errors will render the conclusion incorrect or inaccurate.
Multiple Realities
Multiple Realities is another mode of enquiry used in decision-making process. This mode of enquiry is somewhat similar to inductive consensual and analytic-deductive inquiry system. However, in this mode of enquiry, the information or data used are more complex and needs more strategic ways to arrived at a certain solution. In addition, the multiple realties approach does not only adhere to the determination of a specific solution or outcome. This is because, multiple realities, focuses on representing problems in a broader and wider perspectives. In this manner, the management or the decision maker, will become more involved to the decision-making process and may have more factors to choose from.
Compared to other methods of enquiry, multiple realities involve fewer limitations. For instance, the factors for assessment using multiple realities are not limited to a certain number. Thus, all facets, issues and solutions related to the model or problem can be included in the analysis. Through this, the development of the analogy is more accurate in the sense that all factors are considered. The decision-maker could also easily create a holistic view of the problem. Bias is also less likely to occur. As there are no mathematical formulas or computations involved, the decision-maker could easily start on analyzing the issue or model. The multiple realities allow the decision-maker to predict possible problems or solutions related to the model or issue; hence, this mode of enquiry prepares the business for the future.
One of the guarantors of the multiple reality mode of enquiry is hope. This means that the outcome of the analysis is largely dependent on the perspective, abilities and interpretations of the decision-maker. In a way, the instinct of the decision-maker is the major outcome dictator of this method. The problem on subjectivity and bias become major drawbacks of multiple realities. The responsibility and strain of the analysis is place mainly on the hands of decision-maker, making the development of a conclusion more difficult and tedious.
Dialectic
As mentioned above, another mode of enquiry used in decision-making process is the dialectic approach. This enquiry system is used not for setting data, observations or issues but is used to give emphasis on the differences traditional and typical assumptions. In addition, this system may also provide different perspective for a common data which can be useful for having a smooth and progressive decision making process. For example, in terms of using the internet in banking industries, with the use of dialectic approach, the decision-maker may use some conflict factors in order to have a new truth for the issue. By determining two contradicting, polarized standpoints and about internet banking (2002) the management can efficiently select the best options. In addition, this can help the management to anticipate plausible outcome or impact caused by the application of this information technology (internet) to business. The following table shows the analysis o fusing internet in banking industry through the dialectic inquiry system.
It can be said that one of the advantages if using dialectic approach in decision making process is in line with the conflict issues provided in the enquiry. With this approach, the management or the decision-maker may be able to see two opposing standpoints for a certain issue. With the use of contradicting views, the one who will make the decision may critically analyze if the integration of information technology with a business strategy can be helpful or not to boost the performance of the business. Through the conflict guarantor included in this enquiry, the decision-maker can easily evaluate certain factors and even anticipate other plausible results that internet may provide. In addition, new ideas may be derived from these conflicting or contradicting factors. Hence, the dialectic enquiry system is beneficial, since it enables the decision-maker to become open-minded and decide critically on certain options. In terms of the internet, the objective, benefits and other issues are given emphasis in the dialectic approach. Dialectic approach is useful, specifically in trying to determine the possibility and effect of applying internet to banking industry.
One of the consequences of using dialectic approach is in line with the challenges that the opposing views may bring. In the business sector, most of the management perceive that they must stick to the traditional issues concerning changes in strategies. Hence, the decision maker should see to it that he or she has supporting evidences to efficiently show the management of the organization, other possible outcomes or views. In addition, decision-maker might also faced problems in terms of justifying his or her conception, thus making the result of the dialectic approach unreliable.
Unbounded Systems Thinking
The Unbounded Systems Thinking enables the decision-maker to be involved in all disciplines and context to come up with the most appropriate actions, solutions or conclusions. In addition, this mode of enquiry enables the management of the decision-maker to choose what he or she thinks would be the most effective and appropriate enquiry system to utilize for a certain issue. In addition, the decision-maker is not restricted to constraints to a certain idea; rather, he or she can provide infinite factors and issues about the given data. In line with the use of internet, the unbounded system thinking is useful since the internet itself offers different challenges and conception which must be given enough consideration to have a successful outcome.
One of the consequences of using this approach is that the decision-maker may use factors which may be irrelevant to the issue given. In this manner, problems in having more conflicting issues may provide difficulties for the decision maker to efficiently decide on the problem or issues. In addition, with too many options developed with this system, the decision-maker will not be able to critically analyze each which may affect the decision to be made.
Company Profile
Hewlett-Packard is currently a successful company operating within the computer and printer industry. In addition to its huge market coverage, HP has also been earning billions of dollars through quality products and ingenious development of new technologies. Despite this success, the increasing competition in the industry encourages the company to apply new marketing strategies that will position its products better in the market. One of the possible solutions for this goal is to enter into internet retailing. This paper will then analyze the resources of the company in supporting this strategy; the weaknesses of HP will also be identified in this analysis using various business analytical tools.
Internal Environment Analysis
The internal environment of the company clearly showed the major source of HP’s problem, which is intense competition. In addition to the number of competitors, HP’s rivals are mostly major companies who are able to implement similar marketing strategies. The similarity of the companies’ target markets further worsens the competition and substitute level. This problem will make it difficult for HP to stand out to the market and even if it does, the positive impact may not be as great. On the other hand, the level of competition for HP can allow the company to develop unique and better strategies that will greatly improve its marketing status. Nonetheless, the operation of an IT company requires essential resources (e.g. capital, time, loyalty, brand preference) that cannot be achieved easily by future new rivals. This is an important factor for HP as it will definitely help in controlling the rivalry factor. Controlling the rivalry factor will help HP in focusing its strategies that will overcome major competitors. The micro environment of HP also suggests that the company’s success should be supported mainly by good relations with its stakeholders. In its choice of marketing strategy for example, HP should focus on plans that will promote ease among consumers; its message should speak more about its products’ use and benefits. Good working relations with the suppliers should also be maintained so as to ensure quality production. Through this, HP will be able to produce a quality product and promote it effectively to interested consumers.
HP’s IS Strategy
Information System strategy can potentially encompass all aspects of an information ecology. Any good strategy promotes communication, debate, and consensus; more than anything, it gets managers to talk to each other. Strategy is about choices and emphasis on which types of business to pursue, products to create, markets to address. The Information system strategy of HP makes choices, not carving out a master plan in stone. Ecologically HP’s minded managers strategize about which information to focus on, what information activities to emphasize and how information will help their organization meet its objectives. Particularly for HP, in most cases, they do have the skill to achieve an impact of information for their business need. On the other hand, the company brings new options to the way they interact, the way HP structured and their workplaces are designed. HP employs the network-based information systems can significantly lower the costs of communication among workers and enhance coordination on collaborative projects. It’s true that many organizations don’t have information strategies (1997). HP good reasons to think strategically about information: first, information environments in most firms are a disaster. HP’s information resources are always better allocated. And lastly, their information strategies make information more meaningful. In the past, the company count on people in a variety of jobs to make the information environment better. But many of the positions that used to involve information management – planners, executive assistants, researchers, and middle managers in general – are now gone in many firms. Contemporary computers and communications networks provide greater information access. Insufficient resources exist to understand, interpret and add value to information. Most important, when the organizational and external business environment change a company’s information environment usually needs to change well. The company has eliminated management layers, creating cross-functional teams instead. These changes can be beneficial in themselves; but at this firm they’ve had unintended consequences. For one thing, the manager is expected not only to respond to communications from his or her own business function, but also to coordinate actions across cross-functional processes. In addition, these processes are being coordinated worldwide, which means managers must exchange information with peers all over the globe. Most information-processing activities in organizations have targeted automating tasks; and increasingly computers are being used to augment human capabilities by informative tasks. The wave of the future may lie in restructuring tasks so that they are transformed. Increasingly, seeking and interpretation will be delegated to intelligent software. These software systems will not, however, be able to make policy and ethical decisions related to issues facing societies and the role of human beings within them. It has become a truism that computer-based information and decision systems excel at programmed tasks. They do not perform well, and may even be dangerous. So, the relentless drive for efficiency, in part brought on by global economic trends, may directly confront human needs for more participation and democratization that opens access to information encourages.
Impact of External Environment
Political
Private ownership is the dominant market system in the United States. Moreover, both home and private businesses are granted the authority for decentralized decision-making. The free system in the American business sector is made evident by the amount of the production and output of private businesses. Statistics showed that about two-thirds of the overall American economic outputs are for the individuals and their private businesses. A third of these output are the only part that goes to the government ( 2006). This statistical division indicates that the private businesses and the consumers have a more essential role in the business sector as compared to the political level. Still, the government plays a significant role to the country’s economy including the business sector. One of the important roles of the government in business is the development and enforcement of various business-related laws. These laws include business and property right protection as well as the prohibition of business practices that are perceived as unjust. Product safety is also part of these legislations ( 2005).
Economical
The United States economy is considered one of the largest in the world. The businesses in the country are mainly market-oriented where most decisions and activities are developed by the people (2005). This has been made evident by the annual purchases of the American consumers, which on the average, totaled to more than 5 trillion dollars every year. This suggests that about 80% of the total goods and services produced by US businesses are purchased and supported by the local consumers. In 1999, a total of $2.9 trillion was the US’s gross domestic product ( 2005). Based on a more recent statistical estimation, the US GDP per capita is at $41, 800 and has a real growth of 3.5%. The GDP purchasing parity on the other hand is at $12.37 trillion based on the 2005 estimation (2006). The activeness of the US economy is mainly attributed to its rich and diverse business sectors. One of the most important sectors in the country is the manufacturing industry. HP is actually under the industrial machinery sector where computer as well as engines and other equipment are produced. This manufacturing sector actually accounts for 10.7% of the annual value from manufacturers (2005). This suggests the ability of the American to live a fairly good standard of living. There are some economic problems however in the US which could affect the growth and strategic plans of the economy. One of these problems is the significant level of unemployment rate in the country; in addition, report also indicated that a considerable percentage of young Americans fail to graduate (2005).
Socio-cultural
The population of the country is considered as the third most populated country in the world, which is estimated to be around 296 million (2005). In addition to size, the United States is said to be a pluralistic society. This indicates that the country’s inhabitants are highly diverse in terms of religions, races and nationalities. In addition to the presence of minority groups, the diversity in the country is also attributable to open trade and influx of immigrant workers. The rise of immigrant workers suggests the growing working sector of the country, which increases the need for computers and technology. In the employment factor, certain problems are evident. For example, in terms of the wages given to the people, sixteen states in the country provide a wage higher than the minimum, which is at $5.15 for every hour. There are 26 states that provide minimum wages based on the national level. Ohio and Kansas on the other hand offer wages below the minimum, while six other states do not apply any state laws (2006). The problem on discrimination is also an occurrence as female workers typically earns less than 10 percent than their male counterparts performing similar responsibilities and with same level of training and education. The 1996 statistical findings also showed that male college graduates typically earn $63, 127 every year whereas female college graduates earn an average of $41, 339. Unemployment rates are significantly related to the people’s education level as the unemployment rate of 7.1% in 1998 was observed among individuals who were not able to finish their high school education. On the other hand, the same statistics revealed that only 1.8% of the college graduates were unemployed ( 2005).
Technological
Being one of the countries who were able to use the computer and the internet for the first time, the American society is very mush adapted to technology. In fact, statistics suggested that the employment sector is continuously using computers and related gadgets in their work activities; this greatly contributed to the growth of the computer industry. In addition, job openings for computer professionals are also said to double from 1996 until 2006. People had also grown accustomed to using the internet for work, paying bills, reserving airline tickets as well as shopping. Statistics showed that in 1999, a total of 84 million American have Internet access either at home or at work (2005).
From the details of the company’s macro environment, several strengths can be identified. One of which is the relative stability of the United States in both political and economic terms. With a good political setting, HP as well as other related companies’ strategies will be controlled and supported by well-established business legislations; this in turn will promote fair competition within the industry. Moreover, as the country employs a decentralized decision-making process among businesses, HP has the liberty to design strategies that suits its needs and available resources. Aside from these, the outcome of the production and strategies of HP will be concentrated on the company considering that only a small part of the economic outcome goes to the government. This will help HP in achieving fast returns of investment as well as sufficient funds to develop other strategies. (Opportunities) The data from the company’s macro environment also indicate that future growth and success are very likely. One indication is the presence of a large target market for HP, considering US’s high population count. In addition, the technological background of the country implies the continuously growing awareness of the consumers to computer technology and information systems. If the company will choose to use Internet technology to improve its marketing strategy, the high accessibility of this technology to the people as well as the significant number of people that has online access will result to successful marketing. (Opportunities) Nonetheless, the macro environment information suggests the company’s need to familiarize itself with business laws applied in the country, particularly in product safety, consumer protection and internet security. Furthermore, although the US economy is stable enough, the unemployment and undergraduate rates in the country hint possible economic downturns. With a significant number of undergraduates, pools for competent employees for HP can be reduced. Production and development of strategies can also be affected due to limited workforce. In order to avoid major company losses due to labor problems, HP should choose strategies that are cost effective. This will help it buffer the effects of future economic crisis.
Consequence Analysis
In analyzing the consequence of the IS strategies of HP, Confidentiality, Integrity, Availability or CIA will be used. CIA is commonly used for evaluation of information system (IS). Focusing on the three major goals of confidentiality exists when only the authorized people are allowed to access electronic data while integrity refers to data that are not tampered with since its creation and the data did originate from the original creator of such data are available to the authorized users whenever and wherever they need to access them.
Using CIA to the analysis of IS strategies of HP, it is noticeable that HP may not succeed all the requirements of CIA. Analyzing HP, data from C3P are and should be accessible to the designers, engineers and some workers involved in the manufacturing as well as to the suppliers to ensure integration of the three areas. Once specific data cannot be accessed in the PIM database, both the production operation and design will be affected and may be delayed. It is also required that data from PIM database will only be accessible to the designers, engineers and production managers because designs of computers units as well production process are critical and important assets of HP. Accessibility to the PIM database also affects the integrity of the design. That is, unauthorized access to the designs may result to alteration or copying of designs which is intended to be exclusive for the ford motor. Furthermore, data presented on its website should be protected against hackers and viruses to ensure that they only present reliable data to customers. Also customers’ data such as email address, telephone numbers, address and others especially credit card number and account number acquired via online transactions are required to be protected to ensure that customers’ data remain confidential. Hackers may also deface the website and may corrupt data.
It is also noticeable that with the IS strategies of HP, they use intranet inside the company to be able to share information like customer demands and problems that should be address in the design and production, thus some employees are authorized to access information, add, update or change the data as the need arise.
Therefore, security, ethical and legal issues should be address and integrated in the IS planning and decision making. The more complex the information system of a company, the more the problems associated with it and the more it should be protected. Furthermore, HP’s IS should have back-up system especially the PIM database used in the C3P system. Back up system will ensure that production will not be interrupted in case the IS system was corrupted.
Another consequence of the strategies of HP is its being prone to intruders, unauthorized access, viruses, and Spyware. Thus HP’s IS needed protection such as Firewall software, access control system, anti virus software, encryption system, and anti-spyware.
Based from the tools used for analysis, certain issues and problems of HP have been stressed. One of the major problems of the company is the presence of several competitors within the industry. Though the company has access to a myriad of marketing strategies, companies applying similar strategies can limit their positive effects. The company should then apply a marketing strategy that will give the best results. In order to overcome these problems, HP then plans to distribute its products online (2004). While at resent, the company is already connected to major online retailers, there is also the opportunity to create a company direct online service. The company is then caught between whether this alternative is worth the risk or should it just optimize its current strategy. In this aspect, the main issue is whether the change of strategy is a cost-effective move for HP. Despite the fact that HP has the resources to support this strategy, it is essential that the company will gain the expected results from this investment. It is important that the ability of the strategy to overcome HP’s business concerns is considered. Will the strategy help HP distribute its products effectively to the market? Will this overcome competitors? Will it result to fast return of investment?
The potential negative impact of the consequences of HP’s IS strategy can be classified into two: technical and non technical. Technical impact concerns on the hardware and software assets of HP while non-technical impact concerns on business process or human issues.
Technical Negative Impact
As mentioned above, the technical negative impact may include modified data resulting to unreliability and non-integrity of data as well as inaccessibility to other important data in the database. The availability of the hard disk and the computer system itself may also result from virus attacks. Viruses may also erase important software containing important data. Serious virus attacks may infect all the computer system connected in the intranet causing system failure within the entire company. When unreliable data were transfer from the database to the C3P system, the products that can be manufactured especially when the data were altered may have defects. All these impact the company’s financial and physical resources.
Non-Technical Negative Impact
Most human issues involved in the negative consequences may not be the result but the cause of such negative impact. Modified data and unauthorized access may be caused by unsatisfied employee or misinformed ones.
On the other hand, the most negative impact of the consequences will be distrust of the customers to the company due to the distorted company’s credibility, impacting the company’s profitability.
Therefore, company’s IS strategies should be aligned with the company’s mission and objectives as well as with its organization. So far, HP has not yet encountered such negative impacts but the company did experience, over the past years, too much spending on IT and IS instead of making good automobiles in an attempt to provide the customers excellent services via online websites (2004) but Ford bounced back when it changed its CIO. This means that in IS strategy planning and decision making, a company should have the resources needed not only financial as well as the resources provided by humans such as leadership.
The Next Five Years
In the next five years the basic aim of HP’s current strategy is to improve its means of distributing its products and services. This strategy will help overcome competition as well as increase profit margins. The company will push through with its plan to retail its products by internet means or the company could just enhance its current distribution channels. In the first alternative, HP will develop its own website where product designs or models as well as the services it offers will be retailed. In this company site, customers can view the features of the products as well as the prices. Special offers like discounts or product packages may also be displayed in the website. Inquiries through electronic mail can also be an added feature to the designed website.
Aside from major direct retailers of the company, HP also has contact with mass merchants like Wal-Mart and Sears. Both of these retailers have a company website where products are displayed for consumers who preferred to shop online. In this case, rather than creating an entirely new company site, HP will contract either distribution channel to display its products on their sites.
Internet retailing through a customized website is beneficial for HP as people all over the world can easily access online shops and websites anywhere at any time. Since its products are produced under a well-known brand, product promotion through online means may not be as difficult. In general, businesses with more established and popular brand names have more chances of acquiring the advantages of marketing through the internet. Aside from widened market access, the internet enables merchants to attain direct access to their consumers. This will help retailers avoid undergoing several intermediaries before reaching the consumers; hence, business deals are made faster. Furthermore, this method helps avoid particular intermediary costs like distribution inventories as well as the maintenance of costly retail shops. On the other hand, creating a new website for the company may be disadvantageous as well. This is due to the cost needed to support its development and maintenance. Moreover, issues like internet security and consumer protection may affect the success of this strategy.
Conducting internet retailing through mass retailers is advantageous since fewer resources from the company will be allocated. The company in five years need not allot time, workforce and energy for developing as well as maintaining the site. The downside of this alternative however, is that it limits the company’s direct access to the consumers. Product purchase is not done directly between the company and the buyers.
0 comments:
Post a Comment