Operations and Services of Coles Supermarkets Australia Pty Ltd
Question:
Discuss about the Information systems use as strategy practice.
The competition between modern firms has grown substantially which require them to implement strategic policies that are focused towards increasing their performance. This report will analyse strategic information system in a modern corporation to understand its role and influence in company’s operations. Information system (IS) strategy is referred as organisational policies that interact with company’s environment and assist in sharing information between different departments. Information system allows corporations to merger their business structure with technology that assist in better planning and executing of objectives and it also transforms as per market conditions. In past decade, information systems have become more sophisticated which allow enterprises to improve the efficiency of operations and expand their business worldwide.
Effective implementation of information system allows corporations to generate a competitive advantage over their competitors because it provides better communication channels, decreases operating expenses, reduces human errors and improves the overall efficiency of operations. This report will evaluate the structure, products, and services of ‘Coles Supermarket Australia Pty Ltd’ which is Australia’s second largest retailing corporation. The report will discuss operations and functionalities of Coles to provide an Information System Strategy that can improve overall performance and efficiency of the enterprise. Further, various problems will be discussed in the report that occurs during development and implementation of an Information System Strategy and recommendations will be given to address such challenges.
‘Coles Supermarkets’ was founded in 1914 by George Coles, and it is Australia’s second largest retailing corporation after Woolworths limited. The company operates in supermarket, retail and customers services industry and it has more than 800 supermarkets throughout Australia. In 2007, Wesfarmers bought Coles Group for $22 million which was Australia’s biggest takeover (Carson, 2007). The corporation is known for provided its products are lower prices than compared to its competitors; it offers various services to its customers in order to improve their shopping experience. The head office of Coles is situated in Hawthorn East, Melbourne, Australia. The company has more than 100 thousand employees working in its stores throughout Australia (Coles Careers, 2017). The main competitors of Coles include Woolworths, ALDI, Big W IGA and others. According to Keith (2012), the corporation is known for offering their products at lower rates along with heavy discounts; the primary functions of the enterprise are associated with lighting, refrigeration and emission control. The company controls its emission by effectively implementing energy saving initiatives into its business operations.
In 2016, the corporation generated revenue of AU$33.00 billion whereas, in 2017, the corporation reported that its profits are down by 13.5 percent to AU$1.61 billion (Chung, 2017). In past few years, the enterprise is not generating revenue as expected, therefore, the management of the firm is raking various strategic actions to address the profitability issues and increase its competitive advantage. The company offers a wide variety of products to its customers that include food, beverages, fresh vegetables, meat, liquor, financial services, and many others. The corporation serves more than 20 million customers each week and the firm ensure that it is fulfilling its corporate social responsibilities (Coles, 2016). The corporate also provides its services through online platforms which allow its customers to buy products online and then company delivers them directly to their homes. The corporation allows its online customers to select the delivery time which is most suitable for them to simplify the process of shopping. Coles offer fresh vegetables and meat to its customers whether they are buying from supermarket or online store (Coles Online, 2017). The company has collaborated with ‘Shell’ to offer their services in Australia and New Zealand through their petrol pumps; the firm provides its services in petrol pumps as ‘Coles Express’ (Coles Express, 2017).
Information System Strategy and Coles Supermarkets Australia Pty Ltd
After the takeover of Coles by Wesfarmers in 2007, the corporation started transforming its operations and started investing heavily in the latest technology to increase the efficiency of their operations. The corporation has implemented information system technology to transform its IT infrastructure and improve its functionalities (Cameron, 2014). The company has adopted cloud computing technology into its operations to simplify the accessibility of its data to different stores. The firm reduces its operating costs by effectively using cloud computing for performing various business functions; it uses third-party cloud services which reduces the management cost of servers and employees’ training expenses (Merrett, 2013). As per Zhou et al. (2014), the corporation has invested time and resources in deploying automated replenishment which is company’s biggest customer achievement that improves the efficiency and availability of Coles’ supply chain. Richards et al. (2012) provided that the firm’s IT infrastructure ensures real-time connectivity in order to improve company’s operations and speed of decision-making procedure.
Big data is a prominent technology, and Coles use it to drive its business efficiency and improve its customer engagement (Bowen, 2017). The big data technology use large unstructured data to predict customers’ purchasing behaviour, and such information assists the organisation in developing future strategies. Coles use big data technology to collect customer insights which improve its organisational policies (Ruehl, 2013). The corporation has invested heavily in order to improve its reporting capabilities which allow store managers to take appropriate business decisions. Merrett (2012) provided that the company provide dashboards, iPad and drillable reports to its local store managers and supervisors through which they can access various organisational data and information that improve their decision-making procedure. The enterprise has implemented BYOD program in which employees bring their personal devices to the workplace and use it to access data and perform organisational functions (Crozier, 2013). The company’s IT infrastructure effectively manages thousands of devices and ensures that they are securely connected to firm’s network.
As per Arvidsson, Holmstrom, and Lyytinen (2014), Information System Strategy is defined as corporate business initiatives that focus on strategizing various organisational functions. The system concentrates on analysing and understanding the organisational data to perform various formal and informal activities. The Information System focuses on strategically performing business functions which aligns IT infrastructure with business strategy. Modern corporation uses strategic information system because it allows them to increase their operations’ efficiency and generate a competitive advantage over its competitors. Whittington (2014) provided that effective implementation of information system strategy can assist enterprises in transforming their existing business models and incorporates various other policies that improve customer engagement and experience. As per Lamberti and Noci (2010), Coles can use information system strategies to transform it’s supply chain operations and online business functions. In recent years, most corporations use digital strategy in their supply chain and marketing strategies.
Schniederjans and Cao (2009) mentioned that Information system allows modern corporations to generate competitive advantage by aligning business strategy with IT infrastructure. Coles can implement information system strategy to measure its customers’ requirements and identify their product requirements; such information can assist the corporation in establishing its operations in niche markets and change their business process as per market requirements. The corporation can use digital operations to expand its domestic and private business operations into new markets to increase its market share and number of customers. Ahmad, Maynard, and Park (2014) stated that effective information system can allow the corporation to find new business partners to collaborate with or establish positive relationships with its current business partners. Effective collaborate, and strong relationship with business partners can enable Coles to implement successful innovation process. Innovation strategy is a crucial part of modern companies which allow them to gain competitive advantage.
Challenges Faced in Developing and Implementing Information System Strategy
Leading organisations in the world, such as Apple, Google, and Facebook, use effective information system strategy to promote innovative thinking which allows them to create new business procedures and maintain a competitive advantage. According to Laudon and Laudon (2016), it improves the decision-making process in the enterprises and allows the corporation to fulfill their corporate social responsibilities. Information System strategy connects various parts of multinational organisations with each other that implement innovative approach in business decision-making procedure that assists in various practices such as motivation of employees, imposing deadlines and providing rewards based on performance. Starbucks is known for using information system strategy to improve its customers’ engagement through social media sites which increases its brand image and improve its profitability. Chua and Banerjee (2013) stated that Information System strategy allows Starbucks to handle business communication and customers quarries efficiently; the company also collect necessary consumer data through Information System infrastructure that assist them in developing future business strategies. Similarly, Coles can implement information system strategy to increase its customer engagement, operation efficiency, and effective decision-making process.
In recent years, a larger number of corporations have implemented information system strategy to generate a competitive advantage over its competitors, but most of them failed due to various reasons. One of the primary reasons for company’s failure is limitation and exceeding of resources and time. As per Peppard and Ward (2016), modern organisation did not strategically plan its information system strategy which increases their budget and time required for implementing the project. Before implementing Information System strategy, corporations should analyse and understand their organisational culture and identify limitation that might adversely affect Information System strategy. The continuous frustration of users by the system proves that company has failed to implement effective infrastructure. According to Galliers and Leidner (2014), due to complexity, many users might avoid accepting the new system, and they might constantly attack the strategy by providing that it is unproductive or useless. System failures are one of the primary reasons which frustrate users, and they started opposing the new infrastructure.
Many firms did not invest properly in Information System infrastructure or avoid using the latest software application which increases difficulties in maintaining the network. Laudon and Laudon (2011) provided that lack of investment in information system strategy increases the complexity of operations which is difficult for employees to understand. Many old employees did not understand the latest technology, and they oppose the implementation of it into operations. In order to reduce expenses, most firms did not hire enough IT specialists to train their employees. The lack of communication channels between employees and IT specialist also increases the problems for employees because it became difficult for them to understand and work on the latest infrastructure. Coles should ensure that it hire enough IT specialist to teach employees about the new infrastructure which will assist in improving their efficiency. David (2011) stated that organisations also find it difficult to align their business strategy with information system strategy which increases the difficulties for top-level management. The managers find it difficult to formulate effective business strategies that align with the information system infrastructure which assist in improving overall organisation performance.
Recommendations
Coles can use various strategy policies to ensure that it’s Information System infrastructure align with its business strategies. Lack of management and supervision adversely affects business strategy and stops it from aligning with Information System infrastructure. As per Watson, Boudreau, and Chen (2010), the corporation can use various strategy policies to overcome its management obstacles and challenges. The company improves the relationship between management and employees by establishing effective communication channels. The management can highlight the ability of Information System infrastructure which allows instant communication between staff and management that result in resolving various operation challenges and tackle weak management issues. Aaker and McLoughlin (2009) provided that poor coordination is another challenge between management and employees which increases dissatisfaction in organisation. Most employees and supervisors avoid responsibility sharing which increases complexity in operations. Coles can increase participation of employees in business activities by improving coordination and responsibilities sharing. Information System infrastructure can improve the relationship between IT specialist and employees which assist in increasing participation of workers in business activities that promote a positive work environment.
Coles can improve its office infrastructure design in order to promote interaction and communication between top-level managers and employees. It is the duty of managers to strengthen the communication channels between them and employees by establishing information discussions and social occasions. As per Melville (2010), social events will promote active participation and contribution of workers in organisational activities which establish a positive culture in the workplace. Google is known for implementing effective employees’ interaction programs, and it allows employees to take personal time to work on personal projects. This strategy increases the employees’ contribution to the firm which allows the corporation to generate competitive advantage. Ahlemann (2009) provided that the commitment of top-level manager is another challenge faced by organisation while implementing an information system strategy. In order to address this issue, the corporation should provide more responsibilities to the top-level management which increases their contribution the firm. The management of Coles should be given responsibility to provide formulate and implement information system strategy in the enterprise. The managers should ensure that business strategy aligns with information system infrastructure which increases their interaction with employees. It will assist the corporation in improving its efficiency of operations and achievement of organisational objectives which will sustain its future development
Conclusion
In conclusion, information system strategy allows modern organisations to gain a competitive advantage over competitors and increase their operations’ efficiency. Effective information system infrastructure aligns with company’s business strategies to ensure that it works towards achieving corporate goals. ‘Coles’ has implemented various IT strategies into its business structure to improve customers’ experience and decision-making process. The firm uses latest technologies in its operation such as big data technology and cloud computing to improve its efficiency and functionalities. The company can adopt various information system strategies that will assist in providing them a competitive advantage. The corporation can use information system strategy to increase its communication with customers and employees which provide necessary information to top-level management that assists in the decision-making process.
Conclusion
The firm can use information system strategy to expand its business by interacting with new customers and business partners which increases its market share. There are various challenges faced by the corporation while implementing an information system strategy such as lack of time and resources, employees’ dissatisfaction, lack of training, lack of top-level managers commitment and others. The company can address these challenges by providing more responsibilities to top-level managers, hiring IT specialists for training, introducing new communication channels between employees and management, increasing employees’ contribution and engagement and many others. Coles should effectively implement information system strategy since it allows them to gain competitive advantage and sustain their future growth.
References
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