Woolworths Limited’s Structure, Products, and Services
Write a literature review on how Strategic Information System help organisations to achieve an alignment between the strategic goals of the organisation and the current and future IT infrastructure of the organisation.
In recent years, the role of digital strategies and information system has grown substantially in modern corporations; the companies use these strategies in effectively performing activities of different business division. The information system strategies define various policies that can respond as per organisational environment and provide necessary information to each division. The information system includes the complementary network of software and hardware that corporations can use to filter, collect, create, distribute and process the data. An enterprise can implement effective information system into its business structure to gain a competitive advantage over its competitors and reduce unnecessary expenses, improve efficiency and decrease errors. Modern organisations find it difficult to align information system strategies with business structure because of continuously changing internal and external environments. This report will focus on analysing the structure, products, and services of ‘Woolworths Limited’, and evaluate its current information system structure to identify its shortcomings. The report will examine information systems strategy, and various difficulties face by organisations while formulating their information system strategy. Further, the report will propose various strategies that will assist ‘Woolworths Limited’ in aligning its business structure with information system strategy
Woolworths Limited was founded in 1924 as a retail corporation in Australia; the company mainly operates in different locations of Australia and New Zealand, and few of its stores are situated in India. The head office of the firm is situated in Bella Vista, New South Wales, Australia; it had revenue of AU$59 billion in 2016 fiscal year (Woolworths Group, 2016). The corporation operates in the retailing industry, and it has more than 990 stores situated in Australia, New Zealand, and India. The main competitors of Woolworths include Coles, Target, ALDI, and Wesfarmers (Keith, 2012). In terms of revenue, the enterprise is second largest in Australia and New Zealand, after Wesfarmers. In addition, the company is world’s 24th largest retailing chain in terms of revenue, and it is Australia’s largest takeaway liquor retailer (Dhiraj, 2017).
The corporation has more than 205,000 employees working in its stores; it is known for providing high-quality products at affordable prices (Woolworths Group, 2017). In 2016, the company suffered a loss in its income, and they are facing fierce competition from its competitors such as ALDI, Wesfarmers, and Coles. As a result, the firm is started implementing strategic policies and actions in order to increase its competitive advantage. Although, in Australia and New Zealand, the enterprise has gained a dominating position in the retailing industry and it serves more than 29 million customers every week by its stores. The corporation has a positive image in the Australian market because it offers high-quality, reliable products which increase customers’ reliance on the enterprise.
Recently, the corporation started providing its services through online sources to its customers; people can directly buy products from the online website of the firm or through its mobile application. The online shopping facility is available at selected locations and enterprise uses express delivery service to reduce the time of delivery (Woolworths, 2017). After facing the unexpected loss in 2016, the corporation is redesigning its internal infrastructure and increasing its reliance on the information system. The company has started to invest in several technologies in order to improve the efficiency of its current operations. The corporation uses cloud computing technology with the help of Azure applications that assist in the improvement of its operations and increases their effectiveness (Coyne, 2017). The enterprise is also able to save its expenses by using external cloud services.
Operations and Functionality
Big data technology has the ability to improve business efficiency and increase customer engagement by correctly forecasting their future demands and buying patterns. As per Bartlett (2014), the firm uses big data technology to collect information about its customers and use such insights which are in the form of unstructured data to forecast their buying behaviours. The increase in reliability of reporting capabilities allows the store managers to take appropriate business decisions. Big data technology provides top-level managers and regional store managers to access information that cannot otherwise be accessed by the firm which assists them in developing future strategies. The technology is useful in agile technology which allows the enterprise to prioritise its actions, so they are able to provide the best products in limited timeline and scope.
One of the primary benefits of IT infrastructure is real-time connectivity throughout different stores which assist in increasing speed and efficiency of the decision-making process. According to Wahyuni (2010), Woolworths use real-time connecting in its supply chain process to analyse its performance, and it also provides information to improve their current procedure. The corporation has established BYOD program which allows its staff to use Google application for performing various business functions. It has also developed an application for its store managers by Google App Engine which allows them to log support request from iPad devices provided by the firm (Crozier, 2013).
Laudon and Laudon (2016) provided that in recent years, the information system strategy focuses on strategizing which is considered as an iterative and active procedure. The strategizing process focuses on making sense of data collected by a firm through the formal and informal system. The information system strategy or digital business model focuses on the collaboration of business strategy and IT system through which a corporation gains competitive advantage. Arvidsson, Holmstrom, and Lyytinen (2014) stated that the information system strategy can transform the business structure of a firm and improve the activities of customer engagement and experience. Woolworths use IT infrastructure to modify and enhance the efficiency of its business operations along with supply chain management. Most of the modern companies implement digital systems into their supply chain and marketing strategy. Many organisations can gain a competitive advantage by using information system strategy into their business models such as Apple, Amazon, and Google. Amazon uses information system technology into their warehouse to keep track of millions of different products and accesses them without wasting any time.
In recent years, information technology assists modern corporations in developing the competitive strategy which improves the efficiency of their operations. According to Yu, Lee, and Pai (2012), the significance and role of information technology system are growing popular among modern enterprises. Woolworths can implement information system into its business model which assist them identify the demand and requirement of new products in the market. The corporation can also utilise information systems in order to transform its business processes or develop a niche market radically. Woolworths can use information system strategy to expand its operations in domestic and foreign markets which increases its market share and customer base. The use of information system assists Woolworths to improve its existing business contracts and create a new business relationship with domestic and foreign partners. Peppard and Ward (2016) mentioned that information system also assist the corporation in establishing an effective innovation strategy which plays a critical role in the success of an enterprise. The companies can use open innovation process in order to collaborate and engage with various business entities to improve the efficiency of the innovation process.
Information System Strategy Requirement in Organisation
Google uses information system strategy to improve the effectiveness of its innovation procedure which allows them to maintain their competitive advantage. As per Bell, Ndje, and Lele (2013), modern companies use information system strategy to improve group decision-making process by connecting different stakeholders to a single platform. The group decision-making process allows stakeholders to place their interest in the procedure and develop policies that fulfill their requirements; it is also necessary that information system establish a strategy which motivates and encourage employees to perform at highest productivity. Wu et al. (2013) provided that Amazon is world’s most successful e-commerce website and it uses information system strategy to improve the efficiency of its operations. The corporation has effectively developed market response and rapid product development business model. Amazon uses the information system to successfully venture into different business areas and effectively handle customer engagement without reducing product quality. The information system also assists in knowledge and learning management of a firm which increases its business opportunities because, without continuous learning, companies find it difficult to adapt as per current marketing changes.
Woolworth’s face various challenges while developing and implementing information systems strategy into its business structure that are needed to be addressed by the firm. As per Galliers and Leidner (2014), while developing a new information system strategy, managers are required to identify all the requirements and challenges in the management system. The top management must understand the requirement and potential of information system strategy to use it properly. The information system plan should cover all the division of the firm to ensure that they effective share information with each other which improve collaboration between them. After developing a plan, top-level management should provide their approval on the plan to implement it over the company’s operations effectively. While developing the IS plan, executives should determine various expenses and resources required for effectively implementing the plan on business operations. Dawes, Cresswell, and Pardo (2009) stated that one of the primary challenges of information system strategy is aligning it with the business strategy. There are several factors which increase the difficulties during alignment of IS plan with business strategies such as weak management on top, lack of internal communication sources, and the relation between top managers.
These factors are considered as managerial challenges which affect the implementation of information system strategy in a corporation. The issues relating to human capital in a firm constitute significant challenges while developing information system strategy. Yoo, Henfridsson, and Lyytinen (2010) provided that the corporation has to ensure that workforce is comfortable with new technological advancements and determine the requirement of training programs. The companies find it difficult to recruit new employees who have the knowledge of the latest information system programs; the enterprises also have to employ experts who possess the knowledge of information technology to operate the business smoothly. The IT professionals are required to identify the users’ demands and requirements effectively. According to Laudon and Laudon (2013), the older employees did not prefer to learn new information system technology, and they usually show their unwillingness while learning new technologies. Apart from this, organisations also face various technical challenges after implementing information system strategy relating to software and hardware of the infrastructure. The firms also face various issues relating to telecommunication because employees find it difficult communicate over new channels. In large enterprises, the migration from old software to new IS infrastructure creates various issues because of its large size; upgrade of existing IS infrastructure into new system can also be substantially expensive.
In recent years, the role of information system has grown in modern companies and many firms have failed to effectively utilise IS infrastructure to their advantage. As per Wetherbe et al. (2007), the budget and time window are primary reasons due to which implementation of information system strategy failed in an organisation. Therefore, corporations are required analyse and understand the strategic changes which are necessary to the success of information system strategy and firms can determine such modifications with the help of failed and successful IS models. The failure of an information system infrastructure is determined by the frustration of operators who use the IS infrastructure. The resistance of the users during the implementation of the IS infrastructure also obstructs the acceptability of system. The users might get frustrated by the system and continuously attack it for being ineffective or unusable.
Woolworths implemented SAP technology into its system to replace four separate platforms, but it failed significantly because they failed to understand the potential of technology. Woolworths’ competitor Target effectively utilises SAP technology in its Canadian stores which gained them a competitive advantage. The implementation of IT in the delivery system of Woolworths resulted in becoming one of the biggest failures of the firm, and it outraged a significant number of customers (News, 2017). The online delivering system of Woolworths went down which cancelled or delayed most of the orders. The implementation of self-serve checkout system also failed because customers considered them slow and ineffective (McCauley, 2017). The failure of corporation IT infrastructure affects the sharing of information between different departments which reduces the performance of the firm.
Woolworths can implement various strategies in order to align its business strategy with information system strategy effectively. The lack of proper management can create barriers to the alignment of IS objective with business strategy; several factors can be implemented by the management in order to address alignment challenges. The corporation should invest in establishing an infrastructure that develops robust relationships between the employees and top-level management. Bharadwaj et al. (2013) stated that the infrastructure should include processes which allow instant communication between staff and management which shows the significance of information system strategy in addressing challenges relating to communication. Effective implementation of information system strategy can resolve the issues relating to weak management and communication.
Poor coordination and lack of guidelines for distribution of duties between employees is another challenge in Woolworths. The productivity and participation of workers can be improved by proper distribution of responsibilities and effective coordination. Woolworths can use information system strategy to change the design of office infrastructure which assists in increasing the interaction between employees and management. Chapman and Kihn (2009) stated that effective relation between IT specialists and workers can remove the obstacles from IS strategy of a firm. The management can use social events and informal interactions with employees to communicate with them in order to learn about their requirement and improve their working condition. Effective IS strategy motive workers to engage and contributes to the growth of corporation by the achievement of organisational objectives. One of the major difficulty in the success of IS strategy is lack of commitment by senior management towards implementation. In order to address this issue, the management should be given the responsibility of implementation of business strategy and provide support to employees since it increases their engagement in IS infrastructure which assists in the achievement of organisational goals.
Conclusion
From the above observations, it can be concluded that information system strategy is a key part of modern corporations which assist them to gain a competitive advantage by efficiently managing their operations. It is the process of aligning business strategy along with information system strategy of the firm. Woolworths has adopted various IS strategies in order to improve their performance and gain a competitive advantage over its competitors. The corporation faces various challenges while implementing IS strategies such as lack of participation of management and employees, lack of IT experts, resistance from workers, and many others. The company can address these challenges by implementing various strategic policies such as increasing engagement of workers and management, improving coordination between different departments, establishing robust relationships and many others. The firm should effectively implement information system strategy in order to improve its performance and sustain its future growth.
References
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