Discussion of the Company’s Structure, Products and Services
Information system involves a collection of software and hardware based systems that are used for data management, processing and storage. Most business organizations currently use information systems as a part of business strategies and also to handle enormous amount of business data. Before information systems, the organizations had to deploy manual processing of data that were not only inaccurate but also consumed a huge amount of time and finds (Peppard and Ward 2016). With the advent of information systems, these problems have gradually diminished – not only the data processing is accurate but also consumes less amount of time and investment. According to the business requirements, the organizations currently prepare business strategies that help them gain competitive advantage over rival organizations in the market.
Wesfarmers is a conglomerate company based in Australia that has taken a front running place in the list of largest organizations of the world. In terms of revenue and size, Wesfarmers is the largest conglomerate organization in Australia and owes this growth to the deployment of suitable information system. However, Wesfarmers also have several operational gaps that must also be solved accordingly. In this report, the situation in Wesfarmers is analyzed and suitable suggestions and proposed systems have been suggested.
The chosen company is Wesfarmers, one of the largest companies dealing with chemicals, fertilizers and conglomerates in the world. The company is based in Perth, Australia and has clients in many countries including Australia, New Zealand, Ireland, UK and Bangladesh. The annual revenue as calculated in 2016 was A$ 65.98 billion and the profit has been calculated at A$ 2.35 billion making it one of the highest grossing conglomerate companies in the whole world (Campbell 2017). The overall structure of the company is currently divided into several segments as follows.
Coles – Coles was an independent retail business group before it was purchased by Wesfarmers in 2007 for a massive sum of A$ 22 billion – the largest ever acquisition deal to have taken place in Australia. Coles deals with supermarket, retails, liquor and fuel businesses.
Home Improvements and Office Supplies – This department of Wesfarmers is managed by Bunnings Warehouse and deals with the sale of home improvement and lifestyle products. Bunnings has around 210 retail stores spread over Australia and New Zealand.
Department Stores – Since 2006, Wesfarmers has restructured all its department store businesses and has created a number of brands depending on the type of products sold by the stores. For instance, Kmart is a department store dealing with retail automotive services while Industrials deals with conglomerates, chemicals and fertilizers.
Industrials – This department of Wesfarmers deals with the heavy industrial goods including chemicals, conglomerates and fertilizers. This department of Wesfarmers generates the highest annual revenue for the company.
Wesfarmers is primarily a conglomerates company but it also has retail stores and supermarket business chains. The company started in 1914 with only fertilizer and chemicals business and since then, it has started a wide range of businesses like liquor, hotels, retail, supermarkets, office supplies, home and lifestyle improvement products and others (Kilroy and Schneider 2017). However, the main products of Wesfarmers are chemicals and fertilizers that earn the majority of the profits for the company.
Company Structure
In addition to businesses, company provides a wide range of services for the community and the environment. Furthermore, the company also has several services including financial service, investor service, customer service and others.
The current processes of Wesfarmers include the management of the entire company along with all of its departments, services, supplies and others. Currently, Wesfarmers has restructured the organizational structure into several different departments that function separately under the name of Wesfarmers (Mortimer 2016). This department division is mainly due to the wide range of services provided by Wesfarmers such that the operations of these different services do not obstruct each other. With the current setup, Wesfarmers is also looking to employ more indigenous aboriginals in its ranks and also expand abroad to several countries.
Although Wesfarmers is one of the largest conglomerates companies in the world in terms of size, number of employees and revenue, there are numerous gaps in its operations that are hindering the growth of the company further. In addition, recently the investors are also getting worried regarding the growth of Wesfarmers, mainly due to some no growth phases of the company as well as significant dips in the profit margin in the last few months (Tamm et al. 2014). The main reason behind these gaps of the company is mainly due to lack of centralized control of the company over all its departments and their operations. As the company has divided all the departments, each of the departments now function separately under one name. Although this division eases the operations for the company, no centralized control is there and hence, the central administration board is not able to solve operational issues in the departments in quick time (Gill, Bunker and Seltsikas 2015). These gaps can be significantly reduced by the development of a centralized information system along with highly efficient data analytics tool that will be able to process data from all the departments quickly and provide suitable solutions for the preparation of new business strategies.
The proposed new system is expected to solve the following specific issues that are causing problems within the company’s operations.
Centralized Information System – The main issue for the company is that it lacks a centralized information system that can manage and store data from all of its departments. As a result, although each of the departments maintains its data properly, there is no alignment between the operations of the departments as all of them function separately (Laudon and Laudon 2013). The centralized information system will be installed in the headquarter and all the systems from the different departments will be connected to it. This system will also act as the central server and will store data from different departments in one place facilitating more control of the data centrally.
Data Analytics – Another main issue the system is to solve is that lack of sufficient data analytics as a result of which, the company does not have sufficient market insight and future planning. Wesfarmer’s owner mainly depends on the existing market trend to execute and channel strategies in the business without evaluating future market conditions (Galliers and Leidner 2014). This problem can be solved by using a data analytics tool that will analyze all the business data and provide accurate results regarding future predictions, market insights and others.
Company’s Products
There are two main criteria that will be used to prove the success of the proposed system. These are as follows.
Centralized Control – This first main success criterion is the establishment of a centralized control over the operations of all the departments. This will mean the operations of all the departments in spite of being independent will be controlled centrally in order to establish a proper alignment that will also help the company to implement business strategies and decisions in a uniform manner.
Better Market Insight – The data analytics tool should be able to establish better market insight and the implementation of better business strategies that have been prepared based on current conditions as well as future predictions. The main objective of deploying data analytics tool is to predict accurate values by analyzing the existing data as well as the trend of the change in data over the years.
According to Saxton, Oh and Kishore (2013), information systems strategy is mainly based on the factors that will provide competitive advantage to the company in the existing market. The strategy is mainly prepared with corporate business initiative and a wide range of current operational factors, gaps, competitive rivalry in market and other factors are considered and analyzed. The information system strategy generally involves delivery of a product or service that is related to information systems.
As per Wager, Lee and Glaser (2017), information systems strategy is an essential requirement for the growth of any organization in this digital age. Currently, almost all of the large scale organizations have deployed information systems as a part of their business operations. Hence, the organizations require the help of information systems for maintaining competitive advantage over other rival organizations. The more advanced the information system, the more competitive advantage the organization gets over other rival organizations. Information system strategies also benefit the organizations that are looking to expand internationally and enter the global market.
During development of information systems strategy, Wesfarmers may face some difficulties that are discussed as follows.
Too Many Markets – The first main problem for developing information systems strategy is that Wesfarmers is currently present in a large number of markets including conglomerates, retail, supermarket, liquor, hotels and others. Moreover, these departments do not have any centralized control (Valacich and Schneider 2015). As a result, different information systems strategies will need to be developed for the departments separately that will consume a significant amount of time, budget as well as involvement of stakeholders. This can be solved by developing a centralized information system server to which all the departments will be connected.
Lack of Business Alignment – This problem arises from the previous problem i.e. lack of central control. Due to this, there is not proper alignment between the businesses of organization and hence, development of a particular information systems strategy will be difficult.
Lack of Market Insight – Development of information systems strategy depends on a number of factors, including accurate market insight and future prediction. This is not currently available in Wesfarmers as data analytics are currently handled manually that gives inaccurate values and insights (Willcocks 2013). Furthermore, there is no suitable future study as the company develops strategies based on current conditions only. This can be solved by deploying a suitable data analytics tool like IBM Watson Analytics that will aid the company to prepare a suitable information systems strategy as well as remove inaccurate market predication made by manual analysis.
Company’s Services
The typical problems in information system projects are listed and remedies are suggested as follows.
Problem 1: Scope Creep
Scope creep is a common problem in information systems projects. This mainly occurs when the project scope is not defined correctly before the project is initiated.
Remedy: The remedy for this particular problem is to define project scope accurately before project initiation (Yan Xin et al. 2014). Further, the project manager should be able to plan a process for changing project scope and analyze the vision statement of the organization before approving the initiation of the project.
Problem 2: Information System Security
Information systems are generally attached with the internet connection that aids the organization to contact outside world as well as perform business related operations. Furthermore, the use of cloud computing also requires involvement of the internet connection (Van De Walle, Turoff and Hiltz 2014). However, due to the use of the internet, the information systems are vulnerable to security issues like virus attacks, malwares, ransomwares and others.
Remedy: The main remedy for this problem is to ensure the information system is safely protected by strong firewalls and anti-virus softwares. The firewalls and anti-virus softwares help to defend the servers against online attacks that may destroy all business related files stored in the server.
Conclusion
From the analysis of Wesfarmers, it has been found that the company has a number of existing operational gaps that must be solved using suitable information systems. Accordingly, the organization needs to develop suitable strategies for the development of central information system that will not only connect all the departments of the organization’s business but will also bring uniformity of the application of business strategies depending on the condition of the market. Furthermore, suitable analytics tool is necessary to get better and accurate market insight and future prediction. It is also expected that the development of centralized information system and deployment of data analytics tool will help to solve the operational gaps Wesfarmers is currently facing.
References
Campbell, J., 2017. Insights from the company monitor: Wesfarmers. Equity, 31(8), p.16.
Galliers, R.D. and Leidner, D.E. eds., 2014. Strategic information management: challenges and strategies in managing information systems. Routledge.
Gill, A.Q., Bunker, D. and Seltsikas, P., 2015. Moving forward: emerging themes in financial services technologies’ adoption. Communications of the Association for Information Systems.
Gingnell, L., Franke, U., Lagerström, R., Ericsson, E. and Lilliesköld, J., 2014. Quantifying success factors for IT projects—an expert-based Bayesian model. Information systems management, 31(1), pp.21-36.
Kilroy, D. and Schneider, M., 2017. Valuing the Current Strategy. In Customer Value, Shareholder Wealth, Community Wellbeing (pp. 109-141). Palgrave Macmillan, Cham.
Laudon, K.C. and Laudon, J.P., 2013. Management Information Systems 13e.
Mortimer, G., 2016. How Kmart ate Target: A story of retail cannibalism. The Conversation, (31).
Pearlson, K.E., Saunders, C.S. and Galletta, D.F., 2016. Managing and Using Information Systems, Binder Ready Version: A Strategic Approach. John Wiley & Sons.
Peppard, J. and Ward, J., 2016. The strategic management of information systems: Building a digital strategy. John Wiley & Sons.
Saxton, G.D., Oh, O. and Kishore, R., 2013. Rules of crowdsourcing: Models, issues, and systems of control. Information Systems Management, 30(1), pp.2-20.
Tamm, T., Seddon, P.B., Parkes, A. and Kurnia, S., 2014. A model of strategic IT decision-making processes. ACIS.
Valacich, J. and Schneider, C., 2015. Information Systems Today: Managing in a Digital World Plus MyMISLab with Pearson eText–Access Card Package. Prentice Hall Press.
Van De Walle, B., Turoff, M. and Hiltz, S.R., 2014. Information systems for emergency management. Routledge.
Wager, K.A., Lee, F.W. and Glaser, J.P., 2017. Health care information systems: a practical approach for health care management. John Wiley & Sons.
Willcocks, L., 2013. Information management: the evaluation of information systems investments. Springer.
Yan Xin, J., Ramayah, T., Soto-Acosta, P., Popa, S. and Ai Ping, T., 2014. Analyzing the use of Web 2.0 for brand awareness and competitive advantage: An empirical study in the Malaysian hospitability industry. Information Systems Management, 31(2), pp.96-103.
Order an Essay Now & Get These Features For Free:
Turnitin Report
Formatting
Title Page
Citation
Outline
