Evaluating the information system needs and requirement for golden fleece hotel and developing strategic information system plan
This project is designed to get in detail from survey and past relevant literature the impacts of Information System(IS) adoption in sponsoring company and be able to produce a report that will help in advising the management and the owner of Golden Fleece Hotel (GFH) on the feasibility of the IS in their business and proffer a recommendation on the adoption of the IS strategy. Currently, the sponsoring company has not employed any form of IS strategy in their business activities. They currently depend on the traditional (face-to-face) business means.
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However, the management have decided to take step forward in expanding their business, on that process this project has been requested by GFH owner and the manager with the aim of getting decision management support.
The data gathering of this project will be through survey such as research of relevant academic literatures such as journals and books. Subsequently, the collected data will be analyse and produce a clear and relevant management supporting report which will help to solve the real life problem.
In the history, the relationship between an organizations strategic plan and information systems (IS) was of little importance to the organizations management – as information systems were seen as the same with data processing concerning corporate issues and it was systematical placed as a back-room operation for the running of everyday tasks. However, in current times, information systems has become an essential part for the management of organizations, thus there has been an increasing realization for the incorporation of information systems into the strategic planning of organizations. This is because, information systems and information technology (IT) enable organizations flourish – as it helps organizations grow in scope, offer improved services and innovative products.
However, the development of a strategic IS plan concentrates on identifying the most appropriate IS for an organization and the implementation plan – with its main objective to ensure the alignment of the current business strategy with a new IS strategy (Earl, 2003). Additionally, a strategic IS plan can be interpreted as a formal exercise, where successions of consistent steps are embarked on, which results in the definition of IS requirements as well as the identification of a lasting strategy. This project will avail Golden Fleece Hotel (GFH) – the case study of this project, with a framework focused on enhancing GFHs future and at the same time, provide GFH with technological infrastructures that will support the business to cope with business changes. Thus, the next chapter comprises of a review of certain aspects of this project, such as the sponsor’s details, overview of research chapter, the objective, scope and structure of the project.
The project sponsor is Golden Fleece Hotel; a privately-owned Hotel (Medium Enterprise) that provides full hotel services such as reservation, restaurant and client services. The hotel was founded in the year 1999 in South Yorkshire and provides catering to customers in two basic group- business people and pleasure travelers that wanted a more personal hotel experience. The hotel’s top management team comprises of two (2) persons – the owner and the Manager. The hotel has four (4) main Units: Restaurant/Catering, Housekeeping, Reservation and Client Services. Despite the size of the hotel, GFH still operates business in a traditional manner with poor information technology (IT) infrastructure for their business processes. The hotel does not have any form of electronic commerce (e-commerce) system like website and online transaction support system. However, they always fill a paper card any time they need to get their customers details as a means of making reservation and showing of their business services. In order to fit well in today’s dynamic information era, GFH plans to increase its business operations and services so as to respond to the needs of their customers and the changing situation of their business.
Review of Problem
Currently, GFH is not conducting business in modern way, they still work manually. This shows that majority of their business with customers are always carried out in person or through paper works. However, GFH have a substantial amount of customers that want to contact or make reservations with them in modern way (via internet), but GFH do not have the technological infrastructure to connect with its clients. They have a number of employees that are lacking significantly in IT and technical skills, for this reason this made GFH ability not to achieve its desired goals and objectives. Finally, GFH has no formal IS strategic plan to define its management activities that will enable the business achieve its business objective. Additionally, the research into the development of IS strategic plan will be evaluated and reviewed to allow the selection of the suitable methodology(s) for the development of the plan for GFH. However, the next chapter covers the evaluation of the project success.
From the literature, different development methodologies have different foci and structure; hence leading to different planning or development methodologies for SISP. For instance, Porter’s Value Chain Analysis (VCA) and Critical Success Factors (CSF) methods; the VCA focuses on events that concern adding direct value to an organization while CSF ensures the concentration of the vital requirements concerning the IS need of an organization. Both methods have different structure and focus.
However, as VCA focuses on adding direct value, it consequently puts IS straight into the domain of adding value to the organization instead of cutting cost. Practically, VCA simply offers organizations a model that covers advanced level information, but on the other hand, fails to tackle issues concerning the development and application of the plan. Nonetheless, Porter (2001) argued that in order to ensure success in the application of the plan, organizations need to formulate their business strategy in a way that integrates either cost leadership, market differentiation or focus in an appropriate way to attain a viable long-term competitive lead in their preferred market area. However, Kim and Mauborgne (2005) argued that Porter’s value chain model is not the only alternative for organization, as it concentrates solely on internal processes as an alternative to data, thus it does not properly outline the data structure required by the organization. They argued further – that an alternate way to achieve the SISP implementation success with profits and high growth as well as gaining a competitive edge, is for organizations to create a Blue Ocean Strategy that goes beyond Porters model – by concurrently pursuing both the low cost and differentiation strategy at once. For instance, DELL Computers had an initial strategy to sell directly to the customers at a lower price, thus making their service distinctive from other competitors. They also provided a toll-free telephone number and special (online) features or enhancement in their services as they allowed direct interaction with their clients which helped them understand their client requirements better.
However, Pant and Hsu (1995) advised that it is essential for Porter’s VCA to be implemented in combination with selected methods that will tackle issues concerning the development and application of the plan as well as outline the right data structure. Similarly, the CSF is thought to be useful, as it enables the development of IS around the success factor and is a method extensively used (Seddon, et al. 2002), but conversely a comprehensive strategic IS plan cannot be performed with it – as there is no definition for the data architecture (Pant & Hsu, 1995).
Nonetheless, this is not to say that the CSF method cannot be used for SISP development, because in the case of GFH, it could serve its purpose as CSF analysis is easily performed as well as conducted with little resources. Similarly, the SWOT analysis requires little resources and typically reflects an individual’s current position and perspective of the organization involved in the analysis. However, this perspective can be misrepresented to explain an earlier decided course of action instead of being used as a method to uncover new possibilities. Also, the threats from a SWOT analysis could be seen as opportunities, however, it depends on the persons or groups involved in the analysis.
However, in the case of GFH, the synergy of strategies will not guarantee success for the organization, but in accordance with Mentzas (1997) viewpoint of SISP development, a multi-phase study of GFH business should be conducted before the implementation of a strategic IS plan – so that the synergy of strategies can enhance the organization. Basically, the multi-phase studies are considerations that concern the environment of an organization as well as the alignment that should accompany the configuration of GFHs environment with the business strategy of GFH. However, the stages of the multi-phase study suggested by Mentzas does not cover difficult organizational phenomena that are swayed by human factors; thus it scarcely covers the human aspects, underlying forces and contextual realities concerning the development of a strategic IS plan (Lindsay, 2003).
Nevertheless, this is not to imply that the strategies/models in this literature cannot be used for the development process of a strategic IS plan. They can be used in an organized way that enables each strategy look after the lapses of the other strategies; just as Earl’s advocated the use of multiple methodologies for the development an information systems strategy; and in accordance with the findings from Meckel et al., (2004) survey, Small Medium Enterprises use a combination of methods/methodologies to develop their strategies for the enhancement of their business. Thus, developing an IS strategy for GFH may involve the use of multiple methodologies, with the aim of evolving IS into the products/services of GFH as well as creating new strategic opportunities through the use of IS. However, the level and type of strategy to implement is normally determined by the significance of information systems to the organization, the nature of the organization, and the organization’s current environment (Robson, 1997).
Consequently, the formation of an IS strategy for GFH will involve essential factors – for instance organizational structure, culture, the business strategy, technical infrastructure containing the availability of technical skills as well as the perceptions and prospects of employees; thus, highlighting the dynamic nature and requirements of an information systems strategy. However, the formation of an information systems strategy is subjected to continuous modification – as the interest and perceptions of the main groups and actors involved in the development process changes (Walsham & Waema, 1994). Nonetheless, the methodology(s) that will be used to develop a strategic IS plan for GFH will focus not only on being conceptual or managerial but on the environment and suitability of IS in GFH.
Benefits of IS Strategic Plan
Brown (2005) suggested that recognizing and understanding the importance of information systems for an organization is essential to ensure that information systems are implemented strategically. However, an important benefit of IS strategic plan for GFH will be novelty, because it will create value for the business. Fundamentally, introducing new technologies in an organization is simply associated with novelty (Power, 2006).
Furthermore, Information System strategic plan will assist GFH to develop new standards for their business, increase the throughput of employees, reduce operations costs, and encourage collaboration within and outside the business plus improving customer satisfaction and services (Shore, 2006). Practically, integrating IS into GFH will bring benefits of effectual communication between them and their customers, because it will conquer the concerns of culture, time and distance. Furthermore, with the help of databases, the business associates of GFH will enhanced consistency and support in relation to collaboration.
Essentially, the reason why most organizations adopt Information System is to move their business into the international space of competitiveness, since information systems helps and supports such ambitions (Ward & Peppard, 2003; Applegate et al., 2008). Though, information systems benefits can be categorized as tactical, strategic and operational – where measurements concerning tangible and intangible are classified under operational (Turban et al., 2005). But, the tangible benefits GFH will achieve from implementing IS strategic plan which comprise – the inventory reduction and improvement in productivity. Whereas the intangible benefits include innovative or enhanced processes and standardization in relation to systems integration (Turban et al., 2005). Nevertheless, GFH will also achieve some strategic benefits like there will be increased in growth; market share and leadership will improve competitive advantage.
The aim of this project was to develop a strategic IS plan for GFH. However, the SWOT and CSF analysis was used to critically evaluate both the internal and external environment of GFH.
Additionally, in relations to the theories and processes of IS strategic plan discussed in the literature review, a good integration was developed to ensure that the literature review theories and processes were implemented in the practical elements of the project, as the processes and methodologies for developing a strategic IS plan was followed. Also, GFH’s business operations were evaluated and its business plan aligned with the recommended IS strategies by means of the CSF analysis. Moreover, the content of the literature review served as a guideline for the development of the entire strategic IS plan. Therefore, this goes to prove that the content in the literature review was comprehensively integrated into the project’s practical elements.
Nonetheless, the information systems were basically recommended to completely support the business strategies of GFH, as detailed implementation plan was proposed. Nevertheless, the SWOT and CSF analysis was used to significantly evaluate both the internal and external environment of GFH and therefore, one can say that the product delivered to GFH satisfied the scope of GFH’s requirements.
Practically, todays’ operational effectiveness and efficiency in most organizations can be seen as a strategic plan. This means that it’s possible for an organizations strategic plan to arise from anywhere, anybody, or from comprehensive planning as well as from trial and error. However, strategic thinking is the best way of doing things as strategic planning and the synthesis involved are simply contributors of the entire strategic development phenomenon.
Nevertheless, from the literature covered, selecting methodology for an organization like GFH is determined through the suitability of the methodology into the organizations situation. Additionally, the literature in this chapter has shown that it will be difficult for one methodology to completely support the full analysis, development and implementation of a strategic IS plan. Therefore, I will apply or use the strategy that allows the use of multiple SISP methodologies. In other words, I will choose a number of methodologies used by SMEs from the findings of Meckel et al., (2004) survey to formulate a strategic IS plan for GFH. Moreover, during the selection of methodology, it is important to think through the amount of resources made accessible for the development phase. Thus, a resource issue for the development phase of is the confinement of time and man power for the SISP development.
As a result, the SWOT analysis will be used in the formation of an IS strategy for GFH, as it requires little man power and the time duration required for its development is minimal. In addition, the SWOT analysis is simpler and straightforward when compared with Porter’s Five Forces analysis. In addition, the CSF analysis will also be used for integrating the business-IS strategy and the identification of information systems requirements. This method will be used, as it focuses on the information necessity, which is required by GFH.
Why SWOT Analysis?
This methodology – SWOT analysis was carefully chosen to enable the evaluation of GFH’s strength and weakness as well as their opportunities and threats. Basically, in relations to the strength and weakness, emphasis will be on the internal environment while for the opportunities and threats, emphasis will be on the external environment. However, the primary aim of the SWOT analysis is to attain continuous competitive advantages for GFH through the implementation of strategies that use the internal strengths of GFH, by reacting to the environmental opportunities, and simultaneously reducing the effect of external threat as well as circumventing the internal weakness of the company. Consequently, enabling SWOT analysis to produce a comprehensive plan, as the threats and weaknesses established in the SWOT analysis will be prevented. On the other hand, SWOT analysis can allow an organization to use a lazy course by looking for strengths that fit opportunities and overlook the opportunities that they feel cannot be used to their advantage. However, in order to avoid this lazy approach, the SWOT analysis would be used to identify the best opportunities for GFH and then plans will be in place to stretch GFH to ensure that they meet these opportunities.
Nonetheless, the assessment area in relation to SWOT analysis is greater than that of Porters Value Chain Analysis – for the reason that SWOT concentrations on both the internal and external environment of an organization, whereas Porters Value Chain concentrates only on the internal environment; thus offering more advantages when compared with Porters Five Forces. Furthermore, the assessment area of SWOT concerning the internal environment of GFH will lead to the identification of certain areas that will lead to exceptional accomplishments as well as critical failure features in GFH. This analysis will aid GFH maximize the strong elements/factors they have and avoid areas of weakness during decision making. Also, the assessment area in relation to the external factor will provide GFH the ability to analyze the external openings and threats concerning their competitors as well as creating a better understanding of customers needs, thus allowing GFH to assert itself properly in the marketplace and encourage the exploration of prospective strategic options (Robert, 2004).
However, to portray a perfect picture of the SWOT analysis, Robson (1997) developed the SWOT matrix together with four kinds of exposures for risk that are incorporated into the SWOT matrix. The matrix shows the kind of reactions that may well be suitable to cope with every risk. A sample SWOT matrix and likely reactions are presented in Figure 6.
Practically, from figure 1, the use of the SWOT matrix makes SWOT analysis easier to decide which task should be prioritized when compared to Porters Value Chain analysis or Five Force. Basically, the SWOT matrix makes it possible to identify possible risks visible in information systems and recognize ways to reaction to the risk.
Why Critical Success Factor (CSF) Analysis?
This methodology, CSF analysis – consists of a set of factors that include expertise and responsibilities that are considered as very important factors for the continuous success of an organization. Basically, CSFs are a small number of things that need to work aptly to make certain of an organization’s continued existence and success in the marketplace (Turban, et al., 2005). However, in the case of GFH, CSF analysis will help GFH enhance its business – as it will ensure information systems aid the business strategy of GFH by determining essential information requirement and activities that for the IS plan. According to Peffers and Gengler (2003), the CSF analysis of an organization centers on the fundamental scopes of anticipated performance of the organization. Hence, the CSF analysis will provide GFH with an improved understanding of the required strategic information for the future of the business.
Practically, the CSF analysis of GFH will examine the business objectives and ascertain the necessary elements that are needed for every objective. Afterwards, the necessary IS required to help the CSFs sustain GFHs business growth and success is identified. Consequently, by achieving the CSF analysis, GFH will be able to position itself properly in the marketplace (Ward & Peppard, 2003). Therefore, it is essential for GFH to constantly monitor all the CSF, to make certain their performance is up to standard. In addition, the CSF analysis will provides real support for the development of a strategic IS plan, as it focuses on key activities for business success – as a result preventing any focus on trivial activities. Furthermore, it enables proper allocation of resources to key areas of the business during the development of a strategic IS plan (Avison & Fitzgerald, 2003).
Recommendations on IT Infrastructure
The recommendations and design of the functional structure of the future information technology (IT) department and conceptual technical architecture of the future information technology (IT) department of GFH was proposed to help GFH overcome the difficulties they face. As stated in the case study, the main concern at the moment is incorporating networking functions into the business activities of GFH to lessen their manual processes. Basically, GFH will use the strategy of e-vision opportunities, e-marketing and e-operations. As implementing the e-vision opportunity will entail using innovative business ideas like changing their normal manual processes of manually booking from customers and keeping physical records of customers. They should be able to automate these processes by using a computerized system – electronic booking processing system for booking accommodation. This way, GFH will be able to generate a method of understanding the needs of customers and it will also ensure that there is a surge in the effectiveness and efficiency of the processes at GFH.
Similarly, GFH can also implement the e-marketing strategy by moving most of it business activities to the internet, so that they will be able to maximize customer interaction at GFH. This is achievable, since the automated systems in place. Practically, with the automated system, it will change certain functions at GFH and drive GFH towards web-based creativity; hence the e- marketing opportunity will be applied in the process as it’s connected to customer interaction that centers on the use of web-based creativity to change the strategic technique used to interact with customers. Lastly, the e-operation opportunity should be used to transform GFH strategy for business by using web technology to enhance the operations of GFH.
In addition, GFH will be able to develop an electronic database for customer to amass details or information concerning their booking. Thus the recommendation for this aspect of the network an activity of GFH is that a new and dedicated server should be installed to sustain better and faster networking activities. The system should be able to monitor the speed of the network and the network usages as well as the number of users at any particular time.
Furthermore, for security purposes, the installation of firewall is a must to ensure that the network packages are filtered. Also, a firewall will stop any outside virus from attacking the new network system. Furthermore, GFH will be saving or cutting operations cost by adopting a printer sharing strategy; where the printers will be programmed to run as network printers, therefore supporting any printing requirement from different departments within GFH.
However, the future functional structure for the IT department will be designed to ensure that GFH is able to deliver reliable services on a regular basis to its customers. The new functional structure will allow GFH practice appropriate configuration management in supporting all of its IT applications/services.