The Importance of IT Within a Company
In order for any business to stay ahead of its competition it must carefully monitor its resources allocating funds to each area of the business by the level of importance that area requires. Decisions that are made in this area are vital to the operation of the company. If an important department is not given the adequate funds that it needs to be completely beneficial while extra funds were given to a department that is able to be fully beneficial with less money then a serious mistake was made, perhaps costing the company their competitive edge. One way a company can avoid this is through the implementation of a value chain model. This will allow the company to see which departments are the most beneficial and require the most funding. One of the difficulties in making this model is deciding the importance of departments that do not directly produce or distribute products or services for the company. One example is the Technology Department. Although this department does not appear to directly make money for the company they contribute a considerable amount to those departments that do.
Each company must therefore decide where the Technology Department lies in the value chain model. The easiest way to do this is by evaluating how much the department affects the others. All the departments in the company can be divided into two separate groups. The primary departments are those that deal directly with the production/distribution process, while the support departments support the primary departments. Although the Technology Department obviously lies in the support category they obviously should not be given reduced funding or less attention. The company must take into account how much the department increases the production/distribution process. Depending on the company the level of technology needed varies. Some companies must be on constant vigil ever increasing the level of their technology, while others can afford to be a little behind. An example of a company that needs to keep up to date is a car manufacturer. The Technology Department is a vital area here because it provides the company with an edge by increasing the level of productivity through implementation of new technology. Also if the car manufacturer is not constantly staying ahead in the technology of the car itself then they will fall behind their competitors.
Departmentalization base is the big plan by which jobs are grouped into units.in facts few organization show only one departmentalization base. The most common bases are function, product, location, and customer. The decision to use many bases is usually based on the specific needs of the corporation and on the strong
In a high competitive world market and with the increasing rational buyers a company can only win by creating and delivering the best customer value than the others competitors do. To succeed, a company needs to use the concepts of value chain.
Its functional structure is organized with many executive vice presidents reporting to the CEO and additional functions representing a major component of the Target value chain such as a store, design, manufacturing, sales and marketing, logistics, and customer service. Each functional unit is supervised by a functional chain of command that focuses on their area of responsibility. This way CEO provides direction and ensures that the activities of the functional managers are coordinated and integrated across Target
The tool essentially shows the chain of activities required to develop and deliver the products. The effectiveness of the organization vastly improves when all the key activities such as customer, vendor, suppliers and partner within the value chain working smoothly. The value chain used to reduce operational and production cost using low-cost producer strategy. If two service or products are delivery by two separate divisions for two different markets, there are functionality and process that can be integrated to save cost.
Value chain model highlights specific activities where the information systems could be applied. This model is set to identify leverage points in which IS could have a strategic impact to enhance company’s competitive position. The value chain perceives firm as a series of interconnected activities that add a margin of value.
Hoover, E., Eloranta, E., Holmström, J. & Huttunen, K. (2002). ‘Managing the Demand-Supply Chain: Value Innovations for Customer Satisfaction.’ USA: John Wiley & Sons.
According to Kaplinsky (2004), the following key elements are important in value chain which need to be recognized and which transform a heuristic into an analytical tool:
Value chain analyses a firm 's internal activities such as planning, production, and development, packaging and distribution so as to create value for clients. The function of the value chain is to identify the sources for cost reduction along with quality improvement. It means value chain is used to identify the strong and weak points, positive and negative points, the scope of improvement; in a nutshell, the advantages and disadvantages of the activities taking place in the system. The value chain is also called as a strategic analysis tool and it is a well-known concept in business management industry.
Managing and innovating productivity while understanding the business core competencies is just one way operations management ensures a competitive and differentiation advantage. Since Henry Ford’s innovative processes, many business strategy models have been designed to give customers more value with their purchases of goods or services. The value chain is the latest proven strategy model which consists of a sequence of activities that create and build value while improving an organizations positioning against its competitors (Robbins & Coulter, 2012). Croc’s, Inc. an innovative retail brand footwear company started in 2003 incorporated a value chain strategy which had a dramatic effect on marketplace demands as well as helping lead to dramatic increase in revenues. The purpose of this paper is to analyze Croc’s value chain strategy and how using vertical integration to combine the assembly and distribution process under a single ownership (Khoi, 2007).
Organizational structure within an organization is a critical component of the day to day operations of a business. An organization benefits from organizational structure as a result of all it encompasses. It is used to define how tasks are divided, grouped and coordinated. Six elements should be addressed during the design of the organization’s structure: work specialization, departmentalization, chain of command, spans of control, centralization and decentralization. These components are a direct reflection of the organization’s culture, power and politics.
Teamwork is one of the important component that is required in any types of business organization . Team is defines as “a small number of people with complementary skills who are committed to the common purpose, performance goal, and approach for which they hold themselves mutually accountable”(katzenbach and Smith 1993) . Teamwork offer numbers of advantages like in teamwork work are completed earlier because large task are divided into smaller projects and then it find out an individual who is best for doing the jobs. Tasks that are smaller in size also need less time and brainpower then the work is less sporting to the people who are working. Teamwork also helps in combing the unique skills of people and makes them work efficiently. In a teamwork strength of different people are combined for the benefit of entire team and to produce better product and teamwork also help in building the unity among the group member .In a teamwork relationship play an important role because it helps people to communicate properly with one another whereas friendship helps in creating a job satisfaction. Support system is also important because if support system will be stronger than people will be comfortably depend on each other. These are the advantage of the teamwork but in teamwork there are also disadvantage like in teamwork there is an uneven participation of the members because they depend on other for doing the majority of work this can lead to hatred in the workplace. In a teamwork everyone is not team player, as they cannot perform well while team is working because they want to do there own so they might face problems to get fitted in a certain work culture, which will result in displeasure. In teamwork there is less creativity among th...
A company’s value chain can be created through a number of avenues. Tangible and intangible resources including knowledge, capabilities, skilled human resources, information systems, and company infrastructure can each be a distinctive competency. However, the multi-faceted business environment and industry dynamics can effectively erase a company’s advantage over time. This is particularly true with tangible resources. It’s easy for competitors to imitate one another. For example, all players in the package courier industry have invested heavily in tracking technology, shipping labels, and scanners. When UPS decided to move into the retail industry and acquired Mail Box Etc. in 2001, FedEx followed suit and acquired Kinko’s in 2004 (Hill & Jones, 2011). Marketing strategies related to pricing and promotions are also highly coveted.
Explain how the company’s value-chain activities can be better linked to create value for the company.
An Accounting Information System (AIS) can be defined as software that helps accountants to collect data and process it to create information ((Bagranoff, Simkin and Norman 2010)
Keeping up with technology is difficult, tiresome, and firms find it very costly to keep at pace with it. Technology rapidly and constantly keeps on changing. Being at par technologically requires extensive research and strategic analysis of acquiring new innovation. Enforcing new technology requires staff retraining and in some cases making employees redundant.