Firm and Business Process Performance †Free Samples to Students

Question: Discuss about the Firm and Business Process Performance. Answer: Introduction: In the context of IT/IS, Woolworths made a big decision in 2014 that involved a $1 billion Mercury 2 project focused on achieving advanced data analytics and merchandising systems to help the firm learn more about the clients and improve the supply chain. The project was a 50% investment in Quantium data firm and acquisition of EziBuy business to gain skills in direct selling and data analysis. Unfortunately, after a new CE was hired, he felt that the existing IT/IS strategy was not lean and needed to be replaced with company-wide solutions that improve internal processes. The firm took drastic decisions that included ditching 500 support posts and writing down millions of assets in the IT sector. Furthermore, 1000 workers will be added to the business from the group office (Coyne, 2016). Previously, Woolworths has been facing major challenges caused by lack of a clear IT/IS strategy. As a result, Grant OBrien, the former CEO, initiated a costly project that had not been assessed thoroughly to determine its value to the firm. Further, the previous management approach was not focused in stores. In other words, the firm lacked store and customer-led culture. The firm took the strategic decision after poor performance and the incoming CEO believed that a restructured operating model was mandatory to make a positive improvement. The firm needed to adopt turnaround measures to achieve more productivity and reduce unnecessary costs (Jacques, 2016). It is critical for the company to examine the impact of the external environment on its profitability and business strategies including the IT/IS one. Woolworths has a low dependency on the many suppliers that deal with the firm, therefore, reducing their supplying power. The system adopted by the firms should help manage suppliers and inventory to ensure that there is a constant supply of commodities. The company serves mostly individual customers who enjoy a strong bargaining power. As such, the firm should focus on strategies that include delivering low priced commodities. Further, the IT/IS strategy should be customer centric and focused on improving way services are offered at the store. On the other hand, the threat of new retailers is insignificant since new entrants require huge capital to set up and to supply quality products similar to the ones sold at Woolworths. The threat of substitutes is relatively high since other competitors offer similar products. According to Preez (2016), competition in the retail market is tough, and Woolworths decided to bring new leadership, cut jobs, and develop consumer-centric strategies. As such, the IT/IS strategy should also focus on this are through creating innovative and competitive approaches to attract more customers and achieve competitive advantage. Finally, the market is affected by the presence of many competitors in the area of operation. Short Term and Long Term Pros and Cons IT Strategic Decisions Investing in sophisticated systems at Woolworths has an effect on the company profits in the short term. For instance, Mercury 2 project involved a 50% investment in the initiative, which led to a decrease in company income. However, in the long term, the system will offer data and insights that Woolworths can use in effective decision making. The role of IT in Woolworths is to provide a reliable supply chain and data analytics that support the online sales channel. However, cutting down the resources committed to IT/IS strategy can lead to a weak competitive advantage in future. Data analytics and supply chain management are critical in understanding and serving the ever-changing consumer behaviors. I do not agree with the decision of Banducci to write down millions in IT IS investment. Currently, technology is a key enabler to support team members and ensure that clients receive a good shopping experience. Instead of cutting down resources, the new management should define the digital and analytics goals that should focus on bringing online offering to clients in real time. Woolworths can become a lean and competitive retailer by identifying the challenges of the previous system and solving them instead of making a complete overhaul. A good example can be borrowed from the success of Amazon online store. The firm is able to offer low priced products, more options, and convenient to clients, causing other competitors with weak IT IS strategies to close. For instance, Aeropostale and JC Penney lacked proper planning that resulted to their poor performance and employee layoffs. Action as the CIO As the CIO of Woolworths, I would create a report and do a presentation that shows the future that can be achieved with Mercury II solution. In the short term, the management might feel that the 50 per cent investment in the strategy is quite high (Coyne, 2016). However, the solution will help cut the cost of transportation of merchandise. Further, big data and supply chain will help understand the market dynamics and consumer behavior. As such, decision-making process in the future will be evidence-based according to data analyzed by the system. If the CEO rejects the idea, I would ensure that I keep track of company performance in comparison with competitors that have adopted better IT/IS strategies and compare on the two firms for future reference. Woolworths should develop an ERP solution with cloud computing capabilities. The systems should be broken into modules for implementation to avoid disruptions of main business operations. For instance, a centralized payroll system can be developed independently before linking the module to a common system after testing. Most importantly, the system should make maximum use of the big data concept. For instance, the solution should capture crucial data on supplier management, inventory control, sales reports, and store reports. The ERP should be designed in a way that is compatible with information collection methods. Wieder et al. (2006) note that extending the ERP system with other solutions for supply chain management has a positive impact on the performance of a company. Slashed down IT projects at Woolworths will affect some parts of the business. For instance, the distribution center, transport department, and inventory system will be affected in the short-term. The firm will face some challenges in maintaining a constant flow of commodities until they establish a reliable strategy for the operations. System Stakeholders and Functional Requirements Some of the stakeholders for the IT system include the customers, suppliers, employees, management, and shareholders. The new system will have various modules, such as consumer relationship management, inventory management, and reporting. The CRM should collect data, analyze it, and allow the firm to predict what and when consumers will buy. The supply chain management system should use advanced analytics and direct selling knowledge to drive the future of shopping. The supply chain module should support the increasing sale channel. The supplier management system should show information about a supplier, order details, delivery method, and stock management at the store. In other words, the system should be designed with an end to end supply management in mind. References Coyne, A. (2016). Woolworths writes down millions in IT assets. IT News. Retrieved from https://www.itnews.com.au/news/woolworths-ditches-500-support-jobs-writes-down-it-assets-431300 Jacques, O. (2016). Woolworths to sack 500 staff, close at least 17 stores. The Queensland Times. Retrieved from https://www.qt.com.au/news/woolworths-sack-hundreds-staff-close-stores/3066787/ Preez, D. (2016). Australias Woolworths stabilizes IT systems after worrisome time. Diginomica. Retrieved from https://diginomica.com/2016/08/29/australias-woolworths-stabilises-it-systems-after-worrisome-time/ Wieder, B., et al. (2006). The impact of ERP systems on firm and business process performance. Journal of Enterprise Information Management, 19(1), 13-29.