Why is there an Increased Need for Information Systems?
- Competition
- Globalization
- Uncertainty in the Marketplace
- Tendency of Outsourcing
- Clout of Civil Society and Media
- Reduced Hierarchy and Improved Transparency
- Focus on Knowledge in Business
- Awareness of the Value from Managing Information
- Customer Focus
- Investment on Information Technology
Competition
- most important trend in the modern business environment is the increase in competition
- businesses have had to become more efficient and effective
- most of the measures that a business entity takes today are with a focus on competition
- increased focus on the efficient use of its resources to beat competition
Reasons for increased competition
Greater Choice – Customers today have greater choice and hence demand for better quality at a lower price, which in turn favors those companies which are efficient in their use of resources as they can deliver a better quality product at a lower price.
- The Fast Pace of Technological Change and Innovation
- increased Information Exchange – free flow of information about markets, competitors, strategies and alternatives
- WTO has reduced trade barriers
- cultural changes and social empowerment
- businesses more accountable and open
- Corporate governance initiatives and media focus
- using predictive analysis
Cause of increased competition
- necessitated new information management – challenge is to integrate and enable organizational structure, culture and form with information management, so that management decision-making is faster, accurate, timely and reliable.
- need for faster access to the right kind of information & insight, to improve the quality of management decision-making.
- companies are investing millions in IT infrastructure for better information management. Investments in
- Enterprise Resource Planning (ERP),
- Customer Relationship Management (CRM),
- Data Mining and Data Warehousing (DM and DW) systems
Globalization
the process of interaction and integration among people, companies, and governments worldwide
How many things that you own are from Thailand? e.g. phone – apps, technology, research, investments, market
- Local businesses face increasing competition from global players
- customers are more demanding
- forcing businesses to become more efficient
Globalization
- less international barriers to business
- lower costs and increased efficiency
- resources, materials, labour, production – available cheaper / specialized in other countries
- global markets, global manufacturing hubs, global logistic hubs, global labor force and global presence
- more businesses scale up to a global scale
- find lucrative markets
- global supply chain
Threats to business
- Local businesses face increasing competition from global players.
- go global or remain local ?
- forced businesses to become more efficient
- customers more demanding
- derive value in a different location e.g. cheaper labour costs
- business-friendly government policies or low cost scale manufacture/service to create value for the shareholders.
advantages
- maximize customer base
- shared facilities e.g. cloud computing
- access to technologies
disadvantages
- digital divide
- Cultural, ethnic, political challenge
Uncertainty in the Marketplace
- development is faster, so more alternatives, made in shorter time, from more competitors from different locations
- global financial market meltdowns and slowdowns create uncertainty
- greater capacity to absorb external shocks by reducing reaction time to change
- information management seen as a difference between success and failure
Tendency of Outsourcing
- Anyone located anywhere can deliver service anywhere making the service delivery independent of boundaries.
- businesses focus on their core functions and outsource other functions
- large cost savings by transferring these non-core jobs to developing countries, made possible by the great advances in ICT
- Business Process Outsourcing (BPO) firms provide relationship management, legal process management, etc., at a fraction of the cost.
outsourcing challenges – payer, ensuring:
- quality of output, timely output, zero cost escalation, zero stoppages, minimum customer complaints, and synchronized service over different time zones
outsourcing challenges – supplier
Service orientation, ensuring proper client management, ensuring zero stoppages, managing a large body of young and educated labor force, managing a large IT platform, ensuring efficiency of service level, and ensuring polite and amiable customer handling
outsourcing areas
- Direct selling by tele calling-Outbound calls, Direct selling by tele calling-Inbound calls, Customer grievance handling by receiving calls, Customer support by tele-calling
- Technical support to sales team through inbound calls, Billing support and management
- Medical transcription, Legal process outsourcing, Accounts management, Human resource management
Media and People Power
- companies are more accountable and in the public scrutiny
- with ratings on their performance
- consumers are aware of different issues creating a challenge for business,
- environmental issues, consumer protection issues, global warming, consumer protection, safety, etc.
- public awareness & active media has forced companies to increase compliance on regulatory and ethical fronts.
- cost of non-compliance is much higher now, with loss of goodwill and public image
Transparency
- organization structures are becoming flatter reducing unnecessary hierarchy
- more on work and less on focus of superiors
- The trust levels in companies have gone up with rise in transparency.
- more informal, efficiency focused and work driven culture
- free and open culture has resulted in greater efficiency and a culture of open communication and fast action and decisions based mostly on data driven reports.
Focus on Knowledge in Business
- Focus is more on using knowledge to increase output and get greater value for the resources applied.
- More companies are investing in research and development to come up with new and better products and services.
- This knowledge focus has led to the replacement of outdated products and services
Awareness of the Value from Managing Information
- companies make information their competitive advantage
- managers focus on analyzing data to derive predictive kind of information so that decisions can be based on the future
- proactive is effective and better than the reactive type of decision-making
Customer Focus
to improve market share, businesses have realized that customers today have a choice as never before
Companies need to ensure customer loyalty through good delivery and service
IT Investment
- IT is not ‘the solution’
- It is the use of IT & information by people
- that result in success
IT and customers moment of value
- IT tools help provide: the right people, the right information, at the right time, to make decisions
- success relies of information sharing and usage
Knowledge comes from having information
- Knowledge of the time
- Knowledge of the location
- Knowledge of the form
Customer ‘touch points’
- TIME – when the customer wants it
- LOCATION – where the customer wants it
- FORM – how the customer wants it
- DELIVERY – In the manner to satisfy the customer
- e.g. Ice-cream company survey customers, older customers want ‘sugar-free’, urban customers want ‘coffee flavour’
- IT components network, wireless network, hardware, software
- IT services system development, data management
- IT personnel usage, produces
- greater value in IT investments
- companies have MIS, ERP, CRM and / or KM systems
- success for companies that use the IT and their own data to find insights for decision-making.
- These companies succeed as their decisions are proactive