Information system strategy PDF

Preview

Summary

Mandatory assignment for the module which covers 60% of the marks. ...

Description

Executive Summary The purpose of this report is to formulate an Information Systems strategy for a new online based, limited liability company operating in the United Kingdom _ Learn2Drive. (www.learn2drive.co.uk). This organization provides a wide range of services in the “driving” education field. The company is entering an industry with continuous demand and from generations and hopes to expand its ventures in a systematic manner with the use of a cohesive Information Systems strategy that goes hand in hand with the company strategy. The report comprises of the following sections,

 Company overview and Business Strategy  Strategic Analysis  Information System Approach  Critical Evaluation of the Approach Author has referred to books, journal articles, and websites to make the report more effective.

Table of Contents

Executive Summary.........................................................................................................................1 List of Figures..................................................................................................................................3 List of Tables...................................................................................................................................3 1.0 Company Overview and Business Strategy...............................................................................4 1.1 Company Overview...............................................................................................................4 1.2 The Vision..............................................................................................................................4 1.3 The Mission............................................................................................................................4 1.4 Objectives...............................................................................................................................4 1.5 Core product/ service.............................................................................................................5 1.6 Business Strategy...................................................................................................................5 1.7 Business Model Canvas for Learn2Drive..............................................................................6 2.0 Strategic Analysis and technological trends..............................................................................7 2.1 PESTEL Analysis (Macro Environmental Analysis).............................................................7 2.2 Porter’s Value chain analysis (Internal Environmental Analysis)..........................................8 2.2 Technological trends............................................................................................................10 2.2.1 Emerging technological trends......................................................................................10 2.2.2 Selected trends...............................................................................................................11 3.0

Information System Approach............................................................................................12

3.1 Key Business Processes & Critical Success Factors............................................................12 3.2 Information Systems Requirements.....................................................................................13 3.3 Information System Architecture.........................................................................................14 3.4 Components of IS Strategy..................................................................................................14 3.5 Sourcing & Management.....................................................................................................15 3.6 Future Developments...........................................................................................................15 4.0 Evaluation................................................................................................................................16 References......................................................................................................................................18

List of Figures Figure 1 -Treacy and Wiersema’s three generic business strategies................................................5 Figure 2 -Business Model Canvas for Learn2Drive........................................................................6 Figure 3- Information Systems Strategy........................................................................................12 Figure 4 - Information System Architecture..................................................................................14 Figure 5- Information System Strategy Model..............................................................................16

List of Tables Table 1- PESTEL Analysis..............................................................................................................7 Table 2 - Porter’s Value chain analysis..........................................................................................10 Table 3 - Emerging technological trends.......................................................................................11 Table 4 - Selected trends................................................................................................................11 Table 5- Key Business Processes & Critical Success Factors.......................................................13 Table 6 - Information Systems Requirements................................................................................14 Table 7- Components of IS Strategy..............................................................................................14

1.0 Company Overview and Business Strategy 1.1 Company Overview Learn2Drive is an online- limited liability company that operates in the United Kingdom with the domain name www.learn2drive.co.uk. It offers an online platform to effectively bring together learners and driving instructors/schools where driver instructors/schools can advertise their services. This would make it easier for learner drivers to find a suitable driver who meets their specific requirements. Learn2Drive focuses on acting as a mediator between both driver and instructor in order to establish a connection between the two parties. Currently many studies have started focusing on the relationship between online activity, mainly among young adults and driving schools. Some motor vehicle administration authorities offer lists of provider of driving education as a public service. However these providers do not endorse or recommend any individual or driving school included on the list of providers. Learn2Drive on the other hand lists its providers based on their ratings and provides testimonials from various individuals and thereby makes it easier for drivers to select and also motivates driver training providers to improve their ratings. 1.2 The Vision To be the most reputed platform that provides quality driving lessons, applying innovative ideas by offering the highest quality service at reasonable rates. 1.3 The Mission To be the number one national leader in providing quality training by applying the latest international standards and driving improvement techniques. 1.4 Objectives Learn2Drive offers a wide range of driving services through an online platform connecting both learners and driving instructors/schools. The ultimate goal of this organization is to be a one-stop facility for all driver needs including registrations, licensing etc. Below are the current objectives set for the organization, Long term objectives LO To gain a country wide coverage of driving instructors and learners by 2025. 1 LO To gain a total of 14 employees by 2020. 2

LO To obtain a larger premises to accommodate 14 employees by 2020. 3 Short term objectives SO1 To generate traffic of 5% of internet users to the Learn2Drive website. SO2 To breakeven by the end of the year. SO3 To create awareness of Learn2Drive.

1.5 Core product/ service. This service based organization specializes in helping learner drivers to find an instructor as per their requirements or criteria through a website. (www.learn2drive.co.uk) The online platform aims to advertise, sell and carry out services by letting private independent instructors and driving school instructors create an online profile via Learn2Drive and list their services, prices, work area, contact details etc. Thereafter the company would advertise them and provide a wide range of options for drivers in line. This makes it very easy for customers to compare and select an ideal instructor who fits their requirements and expectations. 1.6 Business Strategy The business strategy followed by Learn2Drive is that of customer intimacy based on Treacy and Wiersem’s three generic business strategies shown in figure 1.6.1. Its applicability is seen in Learn2Drive adopting the principle of customer is king. Therefore its primary focus is customer satisfaction. Therefore its business strategy is driven by the customer.

Figure 1 -Treacy and Wiersema’s three generic business strategies

1.7 Business Model Canvas for Learn2Drive

Figure 2 -Business Model Canvas for Learn2Drive

2.0 Strategic Analysis and technological trends Under this section the external environment and emerging technological trends in the field of driving schools will be analyzed with the aim of developing an Information System strategy for the company. 2.1 PESTEL Analysis (Macro Environmental Analysis) PESTEL analysis tool is used to analyze the macro environmental factors of the field. It helps in identifying and comprehending the political, economic, social, technological, and environmental and legal environments and observes the emerging and prevalent trends of the market. Following table includes the detailed analysis of each external environment which has an impact on Learn2Drive. Factor Stability Government infections Inflation Cost of Living GDP Growth Debts Literacy rate Computer literacy rate

Description Political Environment Stable political environment and government Favorable policies/laws relating to business operations. Favorable business environment for virtual organizations Economic Environment Decrease in inflation rate from 1.9% to 0.3% Increasing cost of living and as well as increase in consumption Weak growth in GDP Increased debts in public sector. Social Environment High literacy rate (92.6%) resulted in high consumer knowledge High Computer literacy rate

Technological Environment Increase in internet access by Households (84%) in UK Internet Access Increased usage in social media Increased usage in internet using portable devices Technological New technological advancements to increase efficiency in work and reduce advancements cost Ecological Environment Environmental No significant impact since this is an virtual organization Protection Legal Environment Privacy & Data Less regulations with cyber security and privacy of information Protection Table 1- PESTEL Analysis

Using PESTEL, Learn2Drive can identify that Legal environment can have a direct impact since there is no significant regulatory bodies to protect and work towards cyber security. Social and technological environment affects for Learn2Drive in a positive way since there is highly increasing computer literacy rate. Regardless, there are various challenges that can be strategically handled. The technological trends and developments are of critical importance for learn2Drive. This section is crucial in developing the IS strategy for the company. 2.2 Porter’s Value chain analysis (Internal Environmental Analysis) Gaining competitive advantage is very important for organizations. Competitive advantage is “a product or service that an organization’s customers value more highly than similar offerings from its competitors” (Baltzan and Phillips 2010). It basically means that one possesses something that is useful (products, service, capabilities) that other competitors do not have. Competitive advantages are short termed as competitors find ways to duplicate the added advantage. (Baltzan and Phillips 2010) Value chain analysis, is an important tool that can help a company identify its competitive advantage and opportunities for strategic use of information systems. Porter’s Value chain views a company as a chain or a series of processes and categorizes a company’s activities into two divisions.  Primary Activities  Secondary or support Activities Primary activities include Inbound Logistics, Operations, sales and marketing, customer service, outbound logistics. Whereas secondary/support activities include administration, human resources, technology and procurement. (O’Brien &Marakas 2011, p. 56; Laudon & Laudon 2012, p. 135). The value chain aids an organization to identify the value of company processes for its customer base. This tool highlights particular activities in the business where competitive strategies are more prone to make a strategic impact. By adding value and thereby creating a competitive advantage information systems can facilitate in contributing to each division of the company’s value chain and extended value chain including enhancing ties with external partners and creating strategic alliances. Depending on the internet, technologies can form a value web

(Laudon & Laudon 2012 )or a hub structure and both focus on improving the effectiveness and efficiency of value chain ad supply chain by digitally linking suppliers, customers, partners and thereby minimizing the gaps in the chain and also improving communication, cooperation and collaboration. The value chain analysis on the other hand shows that a company like learn2Drive must focus on its infrastructure, technology and procurement activities from the secondary activates as it is an online organization. It is also evident that learn2Drive would outsource most of its support activities except for Human Resources. The primary activities focus on the major activities that the organization should carry out to deliver value to its customer base by creating this online platform. These active consist of designing and hosting the website, maintenance of the website/server, promoting, advertising and creating awareness among customers.

Inbound Logistics Process Outbound logistics Marketing & Sales

After Sales Support

Infrastructure

Human resource

Technology

Procurement

                       

Primary Activities Designing website layout Managing Website Assist Customers with Searching Validate payment Methods and bookings Website management Server and Domain management Website Social Media Email Campaign Newspapers Reply for customer inquires Solve customer disputes Customer Support center Secondary Activities Hardware: Servers, Domain and Computers/Laptops. Software: HTML Network: Firewall and Security networks. Founder Website managing employees Customer call service employees Website Cloud Computing Social Networking Outsourcing Website Development Outsourced Servers/Clouds Table 2 - Porter’s Value chain analysis

To survive in an industry a company must develop and implement strategies to effectively cover the above listed forces. O’Brien and Marakas (2001) proposed that companies can follow one of the competitive strategies that are based on Porter’s three generic strategies of cost leadership, cost differentiation and focused Strategy. As per in this scenario, it is recommended to utilize both cost leadership and differentiation strategies. Organizations can also use competitive strategies that are facilitated by information systems to gain competitive advantage. A few examples included are: (O’Brien &Marakas 2011, p. 50–52; Chui & Fleming 2011; The Authors’ own knowledge)  Locking in customers/suppliers by improving or enhancing relations and building valuable new relationships through customer/partner relationship management systems/ applications.  Building switching costs via extranets and proprietary software applications so that an organization’s customers or suppliers are hesitant to pay the costs in time, money, effort and hence bear the inconvenience of switching between the company’s competitors.  Raising barriers to entry by improving operations or/and using the organization structure by increasing the amount or the complexity of the technology that is needed. 2.2 Technological trends 2.2.1 Emerging technological trends Trend Explanation T1 Mobile Applications Mobile applications are pieces of software that run on mobile T2

Social Networking

platforms such as Android, Blackberry, Windows and IOS. The use of social networking site such as Facebook, Instagram, YouTube and Twitter. This allows for customers to interact at an

T3

Cloud Computing

informal social level. Use of computer resources as a utility. It allows centralized storage and access online through the deployment of remote

T4

Crowd Sourcing

servers and software networks. Crowd sourcing is a technique that facilitates a cost effective methodology to complete operational tasks. Yet in the context of the long run, it possess threats to privacy and intellectual

T5

Peer to peer network

property. This is the form of network which facilitates sharing of resources among the nodes (peers) without the use of a centralized server. Table 3 - Emerging technological trends

2.2.2 Selected trends The following trends are selected due to following justifications. Trend Social Networking and Media Cloud Computing Mobile Applications

Justification Social media platforms such as Facebook, Twitter, and Instagram are easy to use and also efficient and effective. Moreover, Social media platforms are the most suitable method to make awareness among the community. Since it does not required any capital investment and also can expand the capacity whenever is needed. Since, most of the customers access internet through Mobile phones. Moreover, it is an easy way to reach to customer. Table 4 - Selected trends

3.0

Information System Approach

The primary aim of Information Systems Strategy is to provide a supporting role to the business strategy. Ward and Peppard (2002) introduced a model to analyze the relationship between business, IS and IT Strategies in order to evaluate the importance.

Figure 3- Information Systems Strategy

The major advantages of implementing an effective Information Systems strategy can be identified as that it can increase the efficiency in terms of business operations. Therefore, it can be identified that there is direct impact to business strategy for information systems strategy in order to achieve business operations. 3.1 Key Business Processes & Critical Success Factors Critical success factors can be identified as a crucial element when it comes to information system strategy. The primary business processes of Learn2Drive are identified using the Porters value chain analysis. Furthermore, Critical success factors of primary process are listed down as follows. Key Business

Critical Success factors

Process 

Design attractive website layout

Inbound Logistics



Effective Website development

Processing

 

Drive a cloud server to host the website Efficient customer registration and validation service



Online bookings

Outbound logistics

   

Online payments and verification system Effective Website management Server and Domain management Effective social media campaigns

Marketing & Sales



Targeting the correct customer base

 

Sales and marketing performance...