Business processes are all interdepartmental and interrelated activities for the logical operation of a company, which include the production process, payroll, inbound logistics, outbound logistics, staff recruitment, etc. Each of these processes is associated with an exchange of information, which is the primary function of strategic information management (Rezvani et al., 2017).
Information systems have contributed to the businesses by innovating new ways of developing processes, adopting new technologies in a more digital medium; contributing to the transformation of the commercial company; and contributing to a more globalized economy (Galliers & Leidner, 2014).
Business processes or information systems are divided into two types: transactional processes and strategic processes (Rezvani et al., 2017). Transactional processes are those that are in charge of managing information in a very detailed way. For example, the accounting part of a company that stores and processes financial information, sales, payroll, etc. Strategic processes are those in charge of managing the information in a more summative and analyzed way to interpret and make decisions based on the results obtained from the various vital operations of the company such as sales, spending, taxes, etc.
Transactional systems are systems focused on decision-making, whose function is the manipulation of information to support and inform decision-making (Kulkarni et al., 2017). Examples of strategic information systems within the transactional processes include Enterprise Resource Planning (ERP), Supply Chain Management (SCM), and Customer Relationship Management (CRM). According to Bhattacharya (2019), these systems allow integrated management of company data on a single repository, combining the management of processes in which different departments are involved, reinforcing control over the organizational structure, and promoting greater discipline in the organization. They also make it possible to achieve improvements in aspects such as control and reporting (situation reports for management), faster processes, reduced inventories, reduced time to market, and improved customer service (Bhattacharya, 2019).
ERP Systems at Walmart
An ERP offers best practices to the industry so that the company will be at levels equivalent to the competition (Smith et al., 2020). By having all the systems of the different departments integrated, a global vision of the operation of the company is achieved. The processes of the supply and production chain, being automated, will make the company flexible and agile in its operation and improve its inventory levels. The customer service processes will also improve due to the possibility of having relevant information on the events that link the customer with the company.
The key to the success of Walmart Inc. is due to its excellent logistics operation, which is well managed through strategic information systems such as ERP (Arli et al., 2013). Walmart integrated a universal information system and expanded it to all its strategic collaborators, suppliers and intermediaries so that they knew in real-time how their merchandise was rotating at the chain's sales points in each country, in each city (Smith et al., 2020). In this way, the supplier or suppliers could know and plan the next supply without causing shortages in the supermarkets and inconvenience with the customer.
To achieve this effective synchronization in the supply, Walmart had as a policy to agree with its suppliers by the obligation to integrate ERP systems into their operations for a real-time reading of the needs that were generated at each point. Currently, Walmart maintains its strategy adapting it more to the demands of consumers to increase competitiveness.
To develop a competitive advantage through Strategic Information Systems, the processes of a company must be supported through technologies, that is, the technological strategy must highlight the activities that generate "value" in the products or services offered by the organization. An example of value is understood from Michael Porter's Value Chain model. It consists of identifying and analyzing the activities that directly create a positive change in the products or services offered by the company. Porter defines two types of primary activities and support activities. The challenge for companies is to carry out a diagnosis and determine improvements in each of the processes identified in the value chain model, primarily in primary activities, since these are the ones in which the incorporation of IT will accommodate strategic technologies. For example, the after-sales service and marketing process will be positively affected by a CRM (Customer Relationship Management) platform.
Arli, V., Dylke, S., Burgess, R., Campus, R., & Soldo, E. (2013). Woolworths Australia and Walmart US: Best practices in supply chain collaboration. Journal of Economics, Business, & Accountancy Ventura, 16(1).
Bhattacharya, P. (2019). There is More to ‘IT’than Improving Operations: Towards A Mechanism for Enterprise Systems-enabled M&A, Innovation and Strategic Decisions.
Galliers, R. D., & Leidner, D. E. (2014). Strategic information management: challenges and strategies in managing information systems. Routledge.
Kulkarni, U. R., Robles-Flores, J. A., & Popovic, A. (2017). Business intelligence capability: the effect of top management and the mediating roles of user participation and analytical decision making orientation. Journal of the Association for Information Systems, 18(7), 516.
Rezvani, A., Dong, L., & Khosravi, P. (2017). Promoting the continuing usage of strategic information systems: The role of supervisory leadership in the successful implementation of enterprise systems. International Journal of Information Management, 37(5), 417-430.
Smith, J. R., Yost, J., & Lopez, H. (2020). Electronic data interchange and enterprise resource planning technology in supply chain contracts. Computers & Industrial Engineering, 142, 106330.
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