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To achieve this I have been in contact with most departments with my chosen organization to gain more knowledge on how Information Is processed throughout the company and how this Information and the purporting technology can help Kestrel Foods move forward in their respective marketplace in the future. Question one: Kestrel Foods is a company that produces a large variety of products that mainly Include nuts and dried fruit, the business Imports and exports commodities from other countries around the world.
To ensure the overall operation runs efficiently and effectively an information management strategy supported with sufficient technology is required.
The business consists of three sites that are located in close proximity In Operation. The first site is the office where most functional departments such as HRS. Marketing. Accounts, Administration. And Operations are based. The second site is the production factory where the commodities are processed into products.
The third site is the warehouse that holds all current assets, and is also where goods are dispatched and delivered to.
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At Kestrel foods the operating information system is called De Facto, this is a cross functional information system. The cross functional information system (C. F. I. S) is the third generation of information systems after calculations systems and functional systems. The cross functional Information system was designed to Integrate all the unction's and supporting processes within the entire business.
To achieve this, the system incorporates enterprise resource planning (ERP). This system focuses on the As information is a key resource and needs to be shared throughout the business the boss is committed to implementing an information technology system that will enable all staff within the business to perform well in achieving the main company objective of year on year growth of 15%.
I spoke to the owner and asked him about the current information strategy at Kestrel Foods and how they align with our current business objectives. He replied "We use I. M and I.
C. T to reduce costs and increase efficiency in all departments of the business, this provides us with more funds for the development of new and existing products, combine this with well developed supplier and trading partner relationships we maintain competitive advantage through our ability to produce high quality products at a more competitive price". From speaking with the owner of the company he considers information management a vital organ within the business and his strategy is to exploit information technology throughout the value chain at Kestrel.
Below in figure 1. 0 shows the exploitation of I. T throughout the value chain at kestrel foods: (The Value chain 1985, citied in Information management in context, 2009 peg. 165 ) Listed below in table 1. 1 are key points from feedback I obtained from department managers on how this is achieved: Table 1 . 1: BUSINESS FUNCTIONS How I. T reduces costs throughout the value chain at Kestrel Foods. Production The manager can access data to run daily stock reports that highlights any shortages below a two week holding, results in efficient production forecasting and production.
Also provides full bulk, finished and packaged goods traceability. Inventory Management: The database provides stock reports, scheduling for goods in and dispatch. The EDI processes orders automatically reducing ordering time and paper trails. Sales Team: Using smartened technology in the field, the sales manager can access data such as sales reports, team, individually and by product, this helps increase flexibility of strategy in field. Having access to this data also assist with decision making. Using email to contact customers' increases efficiency of customer service.
Also reduces time for processing orders. Accounting: Here they use a (ASS) Accounting information system for the collection, storage and recessing of financial data. This data is held in the central database to produce accurate financial reports that is used for decision making. This data can be accessed by management, investors, creditors or tax authority. Human Resources: In the Hrs department information management is vital to manage physical data such as employees filling out documents, or collecting electronic data when monitoring attendance using the electronic hand scan clocking system.
It also provides information and statistics on van usage. Marketing: This department uses the De facto to store customer, market and sales data, this information can be accessed when designing new products for various target segments. From the information obtained from members of staff it is clear that the De Facto system is having a positive effect on business processes within Kestrel Foods. Having access to each other's data the departments are making use of this ability to improve decision making throughout the business.
Even though Kestrel has implemented a well matured system that would be at stage five (Data Admit) when considering the Nolan model, there are still problems within the business processes each day that effect trade on a daily basis. In Table 1 . 1, it provides an insight on how all the functions use the De Facto system, some departments could be more resourceful in their handling of the system. The production team and stock manager use information as a resource to plan production yet there are always stock shortages, to correct this daily stock and sales reports should be accessed more frequently.
A KIT approach to production should be extended outside the business to all our suppliers, even though full integration of independent business can create dependencies this would greatly improve the efficiency of the company externally that will result in better outputs, customer service and production. The sales department is another function that is not using the full potential of the information that is available, the sales manager has access to reports on a daily basis. This information is shared at monthly sales meeting only, the information could benefit the team as a whole and improve the service provided.
The marketing function needs to update the information they obtain through surveys more often as this information is vital when creating products to fulfill customer acquirement, this information was not used sufficiency in the past and resulted in poor standard of product for the Northern Irish market. From the information explained it is clear that Kestrel Foods information strategy plays a central role in keeping the business successful and profitable, as stated I think the integration of this system is still finding some resistance in a couple of departments.
Kestrel Foods outsource all the I. T support from a local firm, it may be possible that if an I. T manager was employed by Kestrel their onsite presence would help push the integration of the system further. In doing this it would help Kestrel create a more agile business and allows the company to adapt through a flexible structure in an effort to blur the boundaries between functions within the company enhancing it both internally and externally.
Question two: In question one the main factor identified for daily business process redesign at Kestrel Foods was the implementation of an Enterprise Resource Planning system (ERP), having spoken to various department heads the business now enjoyed certain advantages from using the system. The fundamental advantage of ERP is the integrating of business functions enabling each department to save time and expense, another major advantage that the ERP provides was the ability to reduce errors and time for decision making as data is visible across the whole organization.
Other advantages of the ERP is the optimization of sales forecasting, order tracking, revenue tracking and transaction history through data compilation. Fig 1. 2: Shows business and technology drivers behind process change through ERP systems (Information management in context, 2009, peg. 195) It seems Information systems and process change at Kestrel has been driven by o new technology arriving, the power of this technology or "Disruptive Technology' as referred to by Davenport (1993) has forced Kestrel to abide by new rules when processing information, this is shown in Table 1. Below: Table 1. 2: Old Rule Disruptive Technology New Rule Information can appear in only one place at one time Shared Database / ERP Information can appear simultaneously at any time Only experts can perform complex work Expert systems 'Training Generalist can do the work of an expert Managers make all the decisions Decision support tools and data availability Decision making is everyone's Job
Field staff need offices to receive, store ,retrieve and send information Wireless data communication, Smartened technology and portable computers Field personnel(sales team) can send and receive information from anywhere You have to find out where things are Automatic identification and tracking technology PER can trace individual, bulk and packaged goods. (Based on Davenport 1993, citied in Information management in context, 2009, peg. 91) The table above shows how the introduction of the ERP has allowed Kestrel Foods to create a differential advantage through process change by reducing costs and time, UT while the ERP has many advantages there are also disadvantages that have to be considered. The three areas where resistance to implementing an ERP system within an organization can be experienced are: 1) Technology : The customization of these systems can be problematic, some of the feedback from department managers mentioned some issues on the process design where they had to adapt the business to the ERP system and not vice versa.
This re-engineering can cause organizations to operate in a prescribed format resulting in a loss of competitive advantage. 2) People: Some staff may not welcome change in the way their department operates as this process change may make them feel undervalued, also as highlighted in question one overcoming resistance to sharing sensitive information between functions and staff can cause management problems. Another issue experienced at Kestrel was Cost: The high switching costs involved in implementing an ERP can increase the vendor's supplier power that can result in higher support, maintenance and upgrade expenses.
Assessing the costs against the benefits of an information system was necessary for Kestrel as they had to evaluate the return on investment for the equines. At Kestrel Foods the ERP has been a success, even though the maintenance of the system is costly as the boss continues to outsource the I. T support, once the tangible benefits are recognizable through the business functions allowing direct cost saving and quality improvements the effect on intangible benefits are also recognizable. Table 1. 3 below shows some of the intangible benefits experienced at Kestrel Foods: Table 1. : Improvements within Kestrels Functions Description Communications Between staff, suppliers and customers Staff morale Staff have seen work load lightened improving working environment Customer distraction Brings repeat business and reduces the cost of sales Reputation New investment sends positive signals to commitment with trading partners etc. Customer management Using customer data to improve reaction to customers' needs. Another prime example of how Kestrel is responding to a changing environment by using information systems to re think their business processes is through electronic marketplaces and e-commerce.
These online marketplaces are a fine example of I. S enabled process change, at Kestrel they have decided to combine internet services along with non internet business, thanks to the development in Information Technologies such as internet, wireless and mobiles (M-commerce) there are now various ways in which customers can make contact and procure products online, as these new lines of communication are open they can result in extra pressure on the physical processes of the business such as warehousing and dispatch. Kestrel have now developed their e commerce to stage four level; Transit.
Through the company website (homesteaders. Com), electronic marketplaces and social networking sites, having evolved from initially "brochures" format the Kestrel Foods website now promotes: Online Transactions Catalogue order/ Fulfillment Interaction with trading partners Fig . 3 shows stage 4 of e-commerce service development: integration of internet (Information management in context, 2009, peg 208) In Fig 1. 3 it shows the information that is exchanged as part off two way relationship based on an order transaction via Kestrel's website.
Other features that e- business promote is the freedom and lack of technological constraints that tie organizations together, Kestrel can now buy and sell products through electronic marketplaces such as Amazon and E bay, being able to access consumer markets brings more options when trying to obtain competitive advantage wrought the value chain via sourcing cheaper commodities locally and internationally. Accessing these markets cost the business very little compared to the returns they can bring, but has e-commerce really impacted on the business processes at Kestrel Foods and if so what is driving this?
The main drivers of e commerce at Kestrel are Cost savings on transactions Access to new global markets Customer Knowledge In 2011 ninety percent of Kestrel's product output was to foreign markets such as Holland, Sweden, Germany, Spain and France, it could be assumed that this rise of imports has been down to the birth of the internet, to a certain extent that is correct due to communication technologies, but feedback from the marketing department has informed that most of the business overseas has been established via physical processes such as trade exhibitions and relationships through trading partners etc.
The marketing function at Kestrel oversees the management of Kestrel's website and operations through electronic marketplaces and reported sales of fewer than ten thousand pounds in 2011 for Amazon and E bay combined, this is very poor compared to the total revenue the business receives. In my opinion kestrel foods should and probably will continue to focus on developing new and existing business through the physical processes that have already been successful, due to the sales generated by our online services I cannot see the owner investing on further online technologies.
Part two: think this is down to my interest in technology as a whole, learning the theories and concepts that are involved within information management provided me with a solid basis of information to discuss with my colleagues at work when researching these theories and applying them in the daily processes at my place of work. The Nortek case has not been a strong point of mine throughout the course, from learning throughout block six I can relate to various concepts on cross functional information systems and computer aided tracking systems that are used to improve supply chain management throughout Kestrel Foods and Nortek.
I was happy with the amount of new knowledge I gained in block 6, there are some topics that I shall be revising a deeper than others in preparation for the exam Just to get up to scratch with them but overall I'm satisfied. At the same time there are areas of the Nortek case study hat I do not understand, the main part being the structure and logistics of the company but I think it is down to the actual size of the business, but in saying this I can apply the learning from the course texts well when I can relate to the issue a bit better.
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