Management information systems Essay

 

1. APCO business strategy and information systems strategy.

In the modern era of the growing role of information systems, it is necessary for every company to ensure that its business strategy is 100% supported by advanced computer systems. Those companies which have failed to ensure this condition were destined to fail in the market because they were unable to maintain their activities on the necessary level. APCO is an example of the company which has currently found itself in a peculiar situation: even though the organization’s business strategy is consumer-oriented and its profits depend on the number of consumers using its products, it does not have enough capacity to service the growing number of customers.

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In the previous years, APCO’s information systems were sufficient to support the number of consumers in need of the company’s services. Therefore, the level of development of information systems did not contradict with the business strategy of the company. The fact that most of the processes going on in the company were not highly automated did not prevent APCO from obtaining revenues from its business and it was able to service as many customers as the there were in the market looking for their services. The company did not need to develop their information systems because those would only be additional costs.

However, in the recent years the management of the company got aware of the fact that the current information systems of the company do not let it realize all of its potential in the market and no more help it to achieve the goals of the consumer-oriented strategy. The sales of the company grew from $8 in 1989 to $165 in 2001 and this rapid increase in the number of consumers has made it clear that APCO’s current information systems are not able to support the company in the new century. The competition in the market became relatively large in comparison with previous years and only companies with the most favourable terms for consumers could be successful in it. APCO still uses systems which let it sign the final contract with the customer only within 10 days which does not allow it to service all of the customers willing to make the deal. Due to the slowness of the process, APCO is destined to keep losing customers. Without improving its information systems and fastening the process of creating and concluding contracts, the company will not be able to satisfy the needs of the customers.

The development of the new information systems for APCO requires the analysis of the major flaws of the existing system which include:

1.      Inability to support an increasing number of customers;

2.      Lack of highly-qualified IT engineers in the company;

3.      Inefficient organization structure preventing constant communication between divisions engaged in relations with consumers;

4.      Inefficient system of contract concluding (takes a very long time; requires consumer to come back and sign the contract 10 days after the application was made);

5.      Manual data-entry during most steps of the process;

6.      Multiple errors due to the low skills of employees and low level of communications between employees APCO divisions and dealers;

7.      Large expenses on salaries due to the increase of employees engaged in APCO operations;

8.      Lack of personalization in relation with customers, insufficient application of promotional tools, lack of “friendliness”;

9.      Application of old-fashioned systems of data-storage, including flat files;

10.  Reliance on paper documents;

11.  Absence of the Web-based system.

2. New system development proposal for APCO.

All of the mentioned negative features of APCO information systems have to be taken into consideration in the creation of the proposal for their improvement. Overall, the new system which is going to be applied in the company is going to include the following features:

oMaximum automation on all of the steps of the process, minimum of steps and reliance on paper documents;

oApplication of principles of CRM;

oConstant communication between all of the employees engaged in the operations with customers;

oWeb-based information systems with well-developed interface, possibilities of personalized approach to customers and emphasize on the use of multimedia applications;

oIntroduction of relational database-management systems;

oMaximum professionalism of employees dealing with customers and information officers.

There are many issues which the company needs to consider when applying the mentioned principles. First, APCO needs to apply STP techniques for maximum convenience as soon as the chance for that is obtained. Straight-through processing is a very important part of building a successful relationship with customers and partners.

Efficient communication with customers is a very important task which needs to be completed in the shortest period of time. CRM technologies are particularly important for addressing in the development of the APCO business strategy. The correct choice of technologies contributes to the success of the company as the relationship with customers gets stronger. “The objectives of the CRM process are to shape customers’ perceptions of the organization and its products through identifying customers, creating customer knowledge and building committed customer relationships.” (Greco, Ragins 2003: 25). APCO’s strategies are all consumer-oriented; therefore, it is very important to ensure the interaction with customers is developed on the highest level. CRM can help in that greatly.

Interactions with APCO customers will be efficiently optimized only through the use of CRM tools. At the same time, it is necessary for APCO to actually apply all of the mentioned tools and not only set objectives. This might be a challenging task especially in the context of Web technologies. Many companies have failed to apply these tools in practice. “The Web promised customers personalization and customization; it promised marketers deeper insights into the habits, feelings, likes and dislikes of customers. But has it lived up to these promises?” (Greco, Ragins 2003: 25).

The personalized approach to consumers can be achieved only through the use of appropriate design tools. The reason of why multimedia design should be used in this project is that it gives the message to the customers at the highest level of efficiency. The availability of communication on different levels is particularly important for the success of the project. The following elements are going to be applied for the development (chart 2): multimedia scripting, video capture, and editing and presentation products.

Chart 1. Development platform of the project.

The use of the mentioned elements is crucial for the development of the Web-based system but there can be noticed some constraints for their application, for example bandwidth/server constraints. They need to be analyzed very carefully and planned, particularly regarding the allocation of resources. There are currently different points of view on the allocation of financial resources for the mentioned items. Some specialists argue that “disk-storage and memory are going to continue to be cheaper, and processing’s “bang-per-buck” will double every 18 or so months.” (Guruge 1994: 21). Recently there have been expressed opinions about the absence of all kinds of constraints on the bandwidth. It has been argued that “the process of applications development and distribution, which traditionally has drained productivity and has been a major obstacle hindering business growth, is becoming more streamlined. This change reflects the fact that applications, developers no longer feel constrained by the cost of bandwidth, memory or disk storage.” (Guruge 1994: 21).

Despite this positive tendency, there are some bandwidth and server constraints for the APCO Web-based system. Those constraints are connected with the number of documents which will be received and which will require fast processing. If the possibilities of the software used in the development are not able to support a large number of orders, it will limit the number of potential customers. Since APCO is currently seeking to service all of the consumers, it needs to ensure that the system is able to process the necessary amount of information.

The general distribution of functions for the project is represented in the chart 3.

Chart 2. Organizational structure of personnel involved in the project.

The project manager is in charge of general organizational issues. Financial division needs to ensure the budget is carried out with the consideration of available resources. Engineers are in charge of the technical side of new system setup. Designers are required to carry out the interface of the new system. Training instructor is in charge of training for employees in the company connected with the use of new technologies.

 

 

3. Effectiveness of the new information system.

The effectiveness of the new system is going to be estimated judging from the cost/benefit ratio. The expenses of the new system set-up are going to be connected with the purchase of expensive hardware and software, employment of IT engineers who have large experience in the new system set-up, introduction of special training for all of the employees in the company using new system, and other expenses. Despite the fact that the set-up of the system is going to be very costly, in case of successful application, the new system is going to ensure stable profits to the company. The improvement of processing capabilities of the system will guarantee the increase in the number of the customers which are serviced by the company. Personalization of the approach to consumers, reduction of the time which it takes to process the documents will attract new consumers to the company. Introduction of CRM tools will also be very beneficial for maintenance of a steady relationship with existing customers and attraction of new ones. Training of the employees will increase their performance and the company will be able to provide the increased number operations and service the increased number of consumers without the increase in the number of employees.

 

 

 

 

 

 

 

Word count: 1604 words.

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