Strategic Management of Information Systems

Question: Discuss about the Strategic Management of Information Systems. Answer: Decisions taken by Woolworths in the context of the IT/IS strategy In the context of the IT/ IS strategy, the organization had taken the decision that it will let 500 workers to go across its supply chain and support office network. It is because the new chief executive Brad Banduci has taken the decision of restructuring the operating model (iTnews 2016). The chief executives have also taken decision of bringing 1000 workers from the group office for splitting the online EziBuy business. Major challenges faced by Woolworths recently Woolworths is struggling with its relationship with the customers of the company. This is due to the issues of inventory system and replenishment. The company is also bearing the cost of $80 million that is related with the impairment of unspecified IT related assets (iTnews 2016). The relationship of the organization with the customers strained and as a result, it was troubled with $20 million rollout of Sap for commodity systems. Factors that led Woolworth to take decisions The factors that led to performance issue were revealed by the chief executive of Woolworths (Slack 2015). He revealed the the issues are mainly arising due to the recent emergency drill which has been conducted in the month of May at Eastern Creek data which shut down the facility. Due to these many ramifications arises both in the systems of data collection and replenishment. Porters five forces Model Activities Impact Threats of new entrants MEDIUM Threats from the Substitute Products HIGH Threats from Competitive rivalry LOW Bargaining Power of the Customers HIGH Bargaining power of the Suppliers LOW Balance of power The bargaining power of the suppliers is low. On the other hand, the bargaining power of the customers is high. The power can be balanced if a strategy is implemented such that the bargaining power of suppliers or customers does not get affected if one of the factors increases or decreases. Impact on IT/IS strategy The introduction of restructured operating system led Woolworths to spend millions on IT assets (Armstrong and Taylor 2014). This will help in reducing the competition from its rivalries. The customers can get proper online services with the help of digital platform. The threats from new entrants also decreases as the organizations operating model is restructured which will be advantageous for Woolworths. Pros and Cons of IT/IS strategic decision taken by Woolworths There are many advantages and disadvantages of the decision that was taken by Woolworths. Short term The organization invests for restructuring its operating model and for building a digital platform in a market place (Guimares et al. 2016). The decision of investment is advantages as investment in the restructuring of operating model helps in improving the competitive advantage of the company, which is a short term advantage for the organization. Restructuring process in an organization like Woolworths can decrease the image of the company (Heracleous 2013). The customers of the company does not get proper products and services according to their need and demand and as a result the process of restructuring effect the image and brand of the company, which is a short term disadvantage. Long term The advantage of the decision taken by the chief executive of the company helps in preparing sales for the next generation of the company. The investment in the IT sector helps Woolworth in achieving value as well as financial condition of the company. It also helps in expansion of the current business (Durand 2012). The advantages are long term and thus increase the annual revenue of the organization. There are many disadvantages of the decision as investment for restructuring an operating model can create issues or challenges in financial condition of the organization (Whittington 2014). If the restructuring process takes much time then the company can faces huge competition in the market for its existence. Importance of IT in Woolworths Development of IT is very much important for Woolworths. It helps in increasing the growth and revenue of the company. By having a perfect IT technology the company can provide best online services to its customers (Ward and Peppard 2016). The services provided by the company helps in attracting more number of customers which will be beneficial for the company. An effective IT system will help in decreasing the competitive rivalry. No, the management of the company is not underestimating the role as the company is investing millions of dollar for restructuring its operating model and for building a digital platform for the marketplace. Decision of the new Management Yes, I agree with the decision of the new management in writing down millions of dollar in IT investment. The investment was done for building a digital platform for the marketplace and for restructuring the operating model. Investment in IT sector is advantageous as investing in technology is one of the way for supporting the innovation which helps in development of an organization. Investment in IT sector provides growth to an organization (Heracleous 2013). For example, Apples stock prices are continuously rising because of the popularity of the phone due to its features. The Apple Company invests millions of dollar every year in Its IT sector and which resulted growth of the company. Explanation about the CIO of Woolworths The CIO of the company should invest in the IT sector after considering certain options. The restructuring of operating model is made if it is sure that the restructuring of the operating model will have positive impact on the company (Armstrong and Taylor 2014). Before investment financial condition and stock off the company must be checked as it helps in dealing with a challenging issue if the decision will bring any loss in the organization. Woolworths must consider the government backed security. They will provide help to the organization if it faces any problems during its restructuring processes. References Armstrong, M. and Taylor, S., 2014.Armstrong's handbook of human resource management practice. Kogan Page Publishers. Durand, R., 2012. Advancing strategy and organization research in concert: Towards an integrated model?.Strategic Organization,10(3), p.297. Guimares, C.P., Cid, G.L., Balbio, V. and Macedo, L.P., 2016. Caregivers and Old PeopleDigital Platform for Education and Training.J Community Med Health Educ,6(438), pp.2161-0711. Heracleous, L., 2013. Quantum Strategy at Apple Inc.Organizational Dynamics,42(2), pp.92-99. iTnews. (2016).Woolworths writes down millions in IT assets. [online] Available at: https://www.itnews.com.au/news/woolworths-ditches-500-support-jobs-writes-down-it-assets-431300 [Accessed 25 Aug. 2016]. Slack, N., 2015.Operations strategy. John Wiley Sons, Ltd. Ward, J. and Peppard, J., 2016.The Strategic Management of Information Systems: Building a Digital Strategy. John Wiley Sons. Whittington, R., 2014. Information systems strategy and strategy-as-practice: a joint agenda.The Journal of Strategic Information Systems,23(1), pp.87-91.