REPORT

ON

STRATEGIC INFORMATION
SYSTEM
SUBMITTED TO:
MRS. VINISHA
SUBMITTED BY:
AKANKSHA JAIN
ARPIT SHARMA
GOVIND SINGH BISHT

SESSION: 2010 - 2011

TECNIA INSTITUTE OF ADVANCED STUDIES

(Approved by AICTE, Ministry of HRD, Govt. of India)

Affiliated To Guru Gobind Singh Indraprastha University, Delhi

INSTITUTIONAL AREA, MADHUBAN CHOWK, ROHINI, DELHI- 110085

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 ACKNOWLEDGEMENT

We pay our gratitude and sincere regards to Mrs. Vinisha, our project Guide for
giving us the cream of her knowledge. We are thankful to her as she has been a
constant source of advice, motivation and inspiration. We are also thankful to
her for giving her suggestions and encouragement throughout the project work.

We would like to express my gratitude and thanks to our computer Lab staff
and library staff for providing us opportunity to utilize their resources for the
completion of the project.

We are also thankful to our friends for constantly motivating us to complete the
project and providing us an environment which enhanced my knowledge.

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 TABLE OF CONTENT

S.NO TOPICS PAGE

NO.
1 INTRODUCTION TO SIS 4-5
2 HISTORICAL DEVELOPMENT 6-7
3. CASE STUDIES 8-42

3.1 Current Issues 8-20

3.2 Alternatives To System 20-30

3.3 Impact 31-42

4. INFERENCE 43-50
5. CONCLUSION 51
REFERENCES 52

1. INTRODUCTION TO STRATEGIC INFORMATION

SYSTEM(SIS)

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Strategic information systems (SISs) support or shape a business unit’s competitive strategy. An
SIS is characterized by its ability to significantly change the manner in which business is
conducted, in order to give the firm strategic advantage. Any information system—EIS, OIS,
TPS, KMS—that changes the goals, processes, products, or environmental relationships to help
an organization gain a competitive advantage or reduce a competitive disadvantage is a strategic
information system.

Strategic Management through information systems are developed in response to corporate

business initiative. They are intended to give competitive advantage to the organization. They
may help in delivering a product or service that is at a lower cost, that is differentiated, that
focuses on a particular market segment, or is innovative.

Strategic management through information systems is those methods which implements business
strategy and allows the organization to gain competitive advantage. They are those methods
where information services resources are applied to strategic business opportunities in such a
way that the computer systems have an impact on the organization’s products and business
operations. Organization these days develop information systems that are always in response to
corporate business initiative. The ideas in several well-known cases came from Information
Services people, but they were directed at specific corporate business thrusts. In other cases, the
ideas came from business operational people, and Information Services supplied the
technological capabilities to realize profitable results.

A major role of Information System in applications in business is to provide effective support of

a company’s strategies for gaining competitive advantage. This strategic role of Information
systems involves using Information Technology to develop products, service and capabilities that
give a company major advantages over the competitive force it faces in the global market place.

Earlier people looked at information systems as support activities to the business. But today they
have emerged as their primary activates which is off immense help to the top management in
their strategic plans. They mechanize operations for better efficiency, control, and effectiveness,
but they do not, in themselves, increase corporate profitability. They are used to provide
management with sufficient dependable information to keep the business running smoothly, and

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they are used for analysis to plan new directions. Information systems these days, become an
integral and necessary part of the business, and directly influence their market share, earnings,
and all other aspects of marketplace profitability. They may even bring in new products, new
markets, and new ways of doing business. They directly affect the competitive stance of the
organization, giving it an advantage against the competitors. Most literature on strategic
management through information systems emphasizes the dramatic breakthroughs in
organizations through computer systems, such as American Airline’s Sabre System and
American Hospital Supply’s terminals in customer offices. These, and many other highly
successful approaches are most attractive to think about, and it is always possible that an
equivalent success may be attained in your organization. There are many possibilities that
strategic management through information systems, however, which may not be dramatic
breakthroughs, but which will certainly become a part of corporate decision making and will,
increase corporate profitability. The development of any information systems always enhances
the image of information services in the organization, and leads to information management
having a more participatory role in the operation of the organization.

All businesses should have both long-range and short-range planning of operational systems to
ensure that the possibilities of computer usefulness will be seized in a reasonable time. Such
planning will project analysis and costing, system development life cycle considerations, and
specific technology planning, such as for computers, databases, and communications. There must
be computer capacity planning, technology forecasting, and personnel performance planning. It
is more likely that those in the organization with entrepreneurial vision will conceive of strategic
plans when such basic operational capabilities are in place and are well managed.

2. HISTORICAL DEVELOPMENT

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In the incipient decade (1950s and '60s), electronic systems could be afforded by only the
largest organizations. They were used to record and store bookkeeping data such as journal
entries, specialized journals and ledems” were used to generate a limited range of predefined
reports, including income statements (they were called P & L’s back then), balance sheets and
sales reports. They were trying to perform a decision making support role, but they were not up
to the task.

By the 1970s “decision support systems” were introduced. They were interactive in the sense
that they allowed the user to choose between numerous options and configurations. Not only was
the user allowed customizing outputs, they also could configure the programs to their specific
needs. There was a cost though. As part of your mainframe leasing agreement, you typically had
to pay to have an IBM system developer permanently on site.

The main development in the 1980s was the introduction of decentralized computing. Instead
of having one large mainframe computer for the entire enterprise, numerous PC’s were spread
around the organization. This meant that instead of submitting a job to the computer department
for batch processing and waiting for the experts to perform the procedure, each user had their
own computer that they could customize for their own purposes. Many poor souls fought with
the vagaries of DOS protocols, BIOS functions, and DOS batch programming.

As people became comfortable with their new skills, they discovered all the things their system
was capable of. Computers, instead of creating a paperless society, as was expected, produced
mountains of paper, most of it valueless. Mounds of reports were generated just because it was
possible to do so. This information overload was mitigated somewhat in the 1980s with the
introduction of “executive information systems”. They streamlined the process, giving the
executive exactly what they wanted, and only what they wanted.

The 1980s also saw the first commercial application of artificial intelligence techniques in the
form of “expert systems”. These programs could give advice within a very limited subject area.
The promise of decision making support, first attempted in management information systems
back in the 1960s, had step-by-step, come to fruition.

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The 1990s saw the introduction of the Strategic information system. These systems used
information technology to enable the concepts of business strategy developed by scholars like M.
Porter, T Peters, J. Reise, C. Markides, and J. Barney in the 1980s. The sustainability of these
applications has since been called into question by N. Carr, which Piccoli and Ives, among
others, have countered. The role of business information systems had now expanded to include
strategic support. The latest step was the commercialization of the Internet, and the growth of
intranets and extranets at the turn of the century.

The concept of Strategic Information Systems or "SIS" was first introduced into the field of
information systems in 1982-83 by Dr. Charles Wiseman..
In 1984 Wiseman published an article on this subject (co-authored by Prof. Ian MacMillan) in
the Journal of Business Strategy (Journal of Business Strategy, fall, 1984).
In 1985 he published the first book on SIS called "Strategy and Computers: Information Systems
as Competitive Weapons"
In 1988 an expanded version of this book called "Strategic Information Systems" was published
by Richard D. Irwin.

3. CASE STUDY

3.1 CUURRENT ISSUES

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I. STEVENS HOSPITAL

Stevens Hospital is a 217-bed public hospital staffed by 1,200 clinical and non-clinical
personnel. Stevens supplies a full range of medical and diagnostic services, including Level IV
Trauma Center and emergency medicine, surgery, rehabilitation, women’s health, birth centers,
orthopedics, cardiac care, imaging, laboratory, and pathology.

Business Challenge

Stevens Hospital made investments in information systems over several years, most notably a
new Picture Archiving Communication System (PACS) system and the clinical Electronic
Medical Record (EMR) system. However, the central hospital information system was outdated
and no longer well suited to Stevens needs. In addition, many areas of the organization did not
have any systems while others relied on homegrown access database systems that were not
integrated and provided only minimal functionality. Finally, some areas had systems that needed
to be updated or reconfigured. As a result Stevens invested many of its IT resources supporting
disparate systems and was not able to move forward with key IT investments. In other cases,
investments had not reached full potential.

In order to identify the most effective means to move forward with IT initiatives needed to create
the systems and infrastructure to support the hospital in the future, Stevens needed a plan. Some
of the business drivers needed for change included:

Key IT systems that had reached the end of usefulness or were coming up for contract renewal

 Annual IT support costs of more than $800,000 for outdated technology that did not meet
the organization’s needs
 A lack of functionality from core systems that led to a proliferation of home-grown
solutions
 Lack of governance for IT initiatives.

Solution

Stevens engaged Hitachi Consulting to do a complete IT assessment. The outcome was the
Strategic Information Systems Plan (SISP), a five-year IT road map. In developing the plan,
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focus was placed on people, infrastructure, and application systems. The project scope consisted
of high-level planning based on detailed analysis of the current IT environment, numerous
interviews of employees, including executives, department managers and physicians, as well as
substantial involvement of the SISP Steering Committee.

 The „people. portion of the project focused on IT department staff as well as those in
other departments who spent more than 50 percent of their time supporting computer
systems
 The infrastructure portion of the project focused on the network technology and back-end
systems required to support that technology, including wireless and telecommunication
systems
 The systems portion of the project included all potential hardware/software systems that
could be used at Stevens. Input from the SISP Steering Committee and the employee
interviews helped narrow the scope to solutions that would be the most likely candidates
over the five-year time period

The resulting SISP gave Stevens its business case for reaching the desired integrated system of
Lawson and best-of-breed hospital applications (Hospital Information System) running on a
technologically up-to-date infrastructure.

Business Benefits

Following the SISP roadmap allows Stevens to achieve reduction in IT costs for the Hospital
Information System and Lawson back-office systems while also increasing functionality and
strategic alignment.

Benefits included:

 A more than 30 percent reduction in IT costs

 A five-year plan with all systems and additional IT support remaining below the original
IT budget and with far greater functionality
 Significant reductions in home-grown and department-created solutions/databases

The new Hospital Information System produced by the SISP roadmap provides key benefits not
only for Stevens, but for key customers as well. Some of these include:

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  Enhanced customer service through improved convenience, responsiveness, and
information availability
 Greater accuracy and stability in Stevens Hospital service delivery, translating into lower
costs and strengthened patient loyalty
 More efficient operations between customers with consumer directed health plans and the
hospital
 Improved relationships with physicians: increased access to detailed patient data for
physicians allowing for improved relationships between patients and physicians

Stevens also attained higher visibility within the health care industry and across the investment
community. Implementing the SISP road map allows Stevens to achieve additional revenue from
improved electronic channels like Patient Tracking, EMR, and Integrated Solutions, which
simultaneously improved revenue-cycle management. Additionally, the five-year strategy
enables Stevens to be more compliant with health care industry standards and regulations, focus
more on its clients/patients, encourage employee evaluation and optimization of processes and,
finally, improve the ability to recruit key technical resources.

II. HOW DELL COMPUTER BTOs ITS VALUE CHAIN?

Dell Computer is well-known for its ability to mass produce computers that are customized to a
customer’s order, a production and operations process known as mass-customization or, in a
value-chain context, a build-to order (BTO) strategy. The ability to build to order depends on
how well a company can efficiently meet customer demands at each stage of the value chain. At
Dell, this ability depends on computer systems that link customer order information to
production, assembly, and delivery operations.

At Dell the BTO process begins with receipt of the customer order from the Internet, fax, or
telephone. It takes approximately one day to process the order and for production control to
ensure that the necessary parts are in stock. Assembly and shipment takes another day, and
delivery to the customer’s home or office takes a final 1 to 5 days. The value chain in place at
most firms assumes a make to-forecast strategy. That is, standard products are produced from
long-term forecasts of customer demand. Thus the primary activities of the value chain move

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from inbound logistics to operations to outbound logistics and then marketing and sales, all
based on projections of what customers will be buying and in what quantities. A make-to-
forecast strategy offers efficiencies in production, but if the forecasts are inaccurate, as they
frequently are, the results are lost sales (inadequate supply) or heavy discounting to move excess
product (oversupply). Then the bottom line is, literally, less profit. Another major disadvantage
of the make-to-forecast stategy is the inability of the firm to track ongoing changes in customer
demand. Dell’s value chain moves the marketing and sales activity forward to the front of the
value chain. In its build-to-order strategy, Dell assembles the product only after the customer has
placed the order, so marketing and sales comes first. The primary disadvantage of the BTO
strategy is system sensitivity to short-term changes in customer demand. For example, if a
particular computer component suddenly becomes wildly popular or temporarily unavailable, the
standard two-week supply in inventory may diminish fast and customer orders will not be
completed on time.
A successful build-to-order strategy offers company like Dell numerous benefits in process,
product, and volume flexibility. For example, customer requirements are linked directly to
production. As a result production decisions are based on up-to-the-minute customer demand,
not long-range forecasts, which can be wildly inaccurate. This increases management’s
knowledge about trends in the marketplace and decreases inventory holding costs. BTO also
offers partners in Dell’s value system increased visibility to the demand and flow of goods. As
noted in the text, understanding this entire value system can give additional insight and
opportunities for competitive advantage. In addition, the support structures for BTO are naturally
more flexibile, creating a higher sense of responsiveness within the firm and a more flexible and
agile company. One outcome of such flexibility is that adjustable price and sales incentives can
be used to manage demand levels, rather than reactively discounting excess stock. Finally,
because the customer gets exactly what he or she wants, first time customers are likely to
become repeat customers and recommend Dell to friends and colleagues. Executing a build-to-
order strategy isn’t easy, as many companies have found out. Not only must interconnected
information systems be built, but BTO frequently requires a change in organizational culture,
managerial thinking, and supplier interactions and support. Inevitably the process begins by
acquiring a better understanding of customer demand; then improvements in information flow
will produce the ability to increase responsiveness in all areas of the value chain.

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III. ROSENBLUTH INTERNATIONAL: COMPETING IN THE DIGITAL
ECONOMY

Problem

Rosenbluth International (rosenbluth.com) is a major global player in the extremely competitive

travel agent industry. Rosenbluth’s mission is “to be the quality leader in the development and
distribution of global travel services and information.” The digital revolution has introduced
various threats and business pressures to Rosenbluth and other agencies in the industry:

1. Airlines, hotels, and other service providers are attempting to displace travel agents by moving
aggressively to electronic distribution systems (e.g., airlines are issuing electronic tickets and
groups of airlines are sponsoring selling portals for direct sale of tickets and packages).

2. Some travel service providers have reduced commissions caps and have cut the commission
percentage for travel agents from 10 percent to 8 and then to 5 percent.

3. A number of new online companies such as expedia.com are providing diversified travel
services as well as bargain prices, mostly to attract individual travelers. These services are
penetrating to the corporate travel area, which has been the “bread and butter” of the travel
agents’ business.

4. The competition among the major players is rebate-based. The travel agencies basically give
back to their customer’s part of the commission they get from travel service providers.

5. Innovative business models that were introduced by e-commerce, such as auctions and reverse
auctions, were embraced by the providers in the industry, adding to competitive pressures on
travel agencies (see Turban et al., 2004).

All of these business pressures threatened the welfare of Rosenbluth.

Solution

The company responded with two strategies. First, it decided to get out of the leisure travel
business, instead becoming a purely corporate travel agency. Second, it decided to rebate

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customers with the entire commission the agency receives and instead bill customers by service
provided. Rosenbluth charges fees, for example, for consultation on how to lower costs, for
development of in-house travel policies, for negotiating for their clients with travel providers,
and for calls answered by the company staff.

To implement this second strategy, which completely changed the company’s business model, it
was necessary to use several innovative information systems.

Rosenbluth uses a comprehensive Web-based business travel management solution that

integrates Web-based travel planning technology, policy and profile management tools,
proprietary travel management applications, and seamless front-line service/support. This
browser-based service allows corporate travelers to book reservations any time, anywhere—
within corporate travel policy—in minutes. Three of the customer-facing tools that comprise this
system are:

DACODA (Discount Analysis Containing Optimal Decision Algorithms). This is a patented

yield-management system that enables travel managers to decipher complex airline pricing and
identify the most favorable airline contracts. Use of this system optimizes a client corporation’s
travel savings.

Global Distribution Network. This network electronically links the corporate locations and
enables instant access to any traveler’s itinerary, personal travel preferences, or corporate travel
policy.

iVISION. This proprietary back-office application provides Rosenbluth’s clients with

consolidated, global data to enable them to negotiate better prices with airlines, hotels, car rental
companies, and other travel providers.

Results

Using its IT innovations, Rosenbluth grew from sales of $40 million in 1979 to over $5 billion in
2002. Today, the company has physical offices in 57 countries and employs over 4,700
associates. The company not only survived the threats of elimination but has become the third-
largest travel management company in the world and a leader in customer service, travel
technology, and integrated information management.

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IV. IMPLEMENTATION OF STRATEGIC INFORMATION SYSTEMS FOR
WALMART’S SUPPLY CHAIN MANAGEMENT

Backdrop

Under the traditional method which was without IS, supply chain management at Walmart was
as following

 Entry made for the item sold on paper.

 Later employee must make a periodic physical inventory count – usually using a
clipboard and inventory report.
 Later, the actual quantities on-hand are then compared to the target quantity levels in the
back office to flush out the re-order quantity.
 Purchase orders are filled and sent to central warehouse.
 Orders issued to suppliers, and store waits for products to be delivered

Observations

 Minimum inventory levels are to be estimated taking into consideration the time taken for
delivery after placing of order.
 Large sized stores are needed, occupying much of area.
 Expenses for labor costs, paper supplies.
 Higher risk of errors in transfer of data.( recording inventory levels, writing purchase
orders etc)
 Subject to time and cost overruns.

Improvement

Eventually Walmart decided to eliminate this ineffective system of supply chain, and replaced it
with an efficient system which employs IS.

Following changes were made by Walmart:

1. Let’s assume that a flash light is purchased at Walmart, and the supply chain is as follows

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 2. The cash register reads the bar code price tag .
3. Sale is updated to central database.
4. The Wal-Mart central warehouse is notified automatically that the Wal-Mart retail store
needs a
5. new flashlight for the shelf to replenish the purchased item.
6. Further, the manufacturer is also notified that the Wal-Mart central warehouse needs a
new flashlight.
7. Even the raw material suppliers are notified that the manufacturer now needs a little more
raw materials (plastic housing, switch, light bulb, etc), and so it goes.

For all these processes Walmart uses Retail link system.

Observation

 Minimum inventory levels are needed to be maintained, hence less store area.
 Size of warehouses is also reduced.
 Wal-Mart is often able to replenish items on the Wal-Mart shelf in less than three days –
from the manufacturer to the shelf.
 These lower inventory levels result in either a reduced floor plan with lower carrying
costs and
 lower interest expense – or a greater diversity of products on the store shelves.
 Additionally, because Wal-Mart is better able to order inventory on demand, the
company is in a better position to meet customer demand. Today’s products are
tomorrow’s obsolete inventory.

V. STRATEGIC INFORMATION SYSTEM IN HEALTH CARE INDUSTRY

(CASE STUDY MITRA KELUARGA HOSPITAL)

In health care, information system can provide a competitive advantage for management if the
systems are implemented as modular parts of information communication architecture rather
than strictly as support for specific function, such as billing, registration, cost accounting, and
lab. Given the pressures of competition and limited resource, healthcare providers must be able

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to add, drop, or change information system components as quickly as they can adjust programs
and services provided to patients.

This case describes information system that available in MITRA KELUARGA hospital.

Mitra Keluarga Hospital is a general hospital located in Jatinegara, East of Jakarta. This hospital
first operated as a general hospital in December 1995.

The mission of this Hospital is to be an international standard quality hospital, with chain all
over the province of Indonesia. In achieving this mission, the hospital try to maintain a perfect
system that consists of good management system, sophisticated healthcare sciences and medical
facility, with qualified physicians who will give their best service for the patient.

Transaction Processing Information System

In this hospital, transaction occurs when this hospital provides a service to patient. This is the
essential of this information system, many activities include in this hospital like to provide a
service this hospital needs to buy medical supplies like medicine and others from supplier, in
every month they need to pay the salary or electricity, to bill customers, or collect money. This
hospital used transaction processing information system and this information system really help
this hospital keep their account up to date.

Operation System

The active role of this hospital in the cultural life of the local community has been made this
hospital responsible for treating acute illnesses and trauma, treating and supporting those with
chronic illnesses, promoting healthy lifestyle, and training health professionals. This different
operation for different activity in this hospital has been made this hospital as a complex
organization. This hospital using the “information based model” system, that is the system that
can link the management processes of the organization to the direct clinical activity through
information system based on this model. Contracts and budgets can be negotiated on the basis of
the patients that are expected to be treated and the clinical activity expected to be involved with
each patient. This system also makes it easier for this hospital to make collaboration with “third
party” like insurance or to be a healthcare provider in any company who needs their service.

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Reporting Individual Patient Record

In this hospital, they are using patient-based management information system that brings
together detail of all patient activities. The information will be summarized and gives pointer to
where more detailed information may be found.

Internet Profile Corporation

This hospital have a home page in the Internet which has content about the profile of the
company that include the history of the company, health information, the service offer, and the
list of physicians along with the day and time of practice, also there is a section for
communication called “talk to us” for the visitor of the web to ask questions via e-mail.

In general, only these four information system is now available at MITRA KELUARGA
Hospital. As we see, recently, the development of the hospital is heading toward physical
quantity, the management of the hospital tend to think about building another hospital in another
province of Indonesia, rather think about the quality of the hospital or forget about another part
of the mission that is to be an international standard quality hospital, which has back up with
information system as a competitive advantage.

Based on Porter’s competitive forces model on MITRA KELUARGA Hospital, this hospital is
surrounding with so many new entrants and substitute, with different kind of customer and only a
few supplier. With this position, MITRA KELUARGA Hospital has to do something, if they
want to stay longer in this business. So, what this paper suggests here is gaining competitive
advantage trough Information Systems to face the challenge of information era.

Any other information systems that can suggest for this hospital are:

Logistic Systems

Logistics management deals with ordering, purchasing, and inbound logistic and outbound
logistics activities. Hospital using logistic management inter department and some supplier, inter
unit (like distribution of medicine direct from prescribe doctor to pharmacy, distribution of food
that required for patient from doctor, the availability of rooms, medical equipment for surgery)
and extranet (with the supplier), all these activities using EDI.

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Medical Staff

In today’s competitive care environment, an important key to success is partnering between the
hospital and medical staff. More than ever, the growth of managed care demands that hospitals
and medical staff develop and foster a symbiotic relationship. The medical staff is the engine of
every hospital. It is the medical staff that determines case mix, admits patients, controls the use
of resources, assures quality of care, creates the documentation that forms the basis for billing,
and help to assure that regulatory standards are met. The full participation and support of medical
staff is critical to the attainment of all quality and revenue goals. All too often, hospitals and their
medical staff find themselves on what appears to be opposite sides of the issue. Unfortunately, in
some instance this “matter of perspective” has become part of the institutional culture.

Patient Access

Effective case management, control of hospital resources, quality of care and accurate medical
record begin when the patient enter the hospital. With the proliferation of specialized clinics,
ambulatory and outpatient service and increasing public reliance upon emergency units, the
avenues by which patients gain access to the system are growing. Developed systems for
consolidated patient access service for hospitals must be across the nation.

Patient Account

Everyone knows that efficient patient account management can do wonders for the health of the
bottom line. However, while computers are an essential tool, there is no substitute for staff
performance. Health care is a human endeavor and effective patient account management must
be founded upon a logical organizational structure, backed by clear and comprehensive policies
and implemented by a productive and thoroughly trained staff of specialist.

Managed Care

Managed care will continue to be a central topic in the national debate on health care cost.
Regardless of the current penetration of managed care into the hospital’s market and
implementing effective case management now will help to ensure success in inevitable
competition for managed care contracts. The effective case management is the key to manage
care and will benefit the hospital, patient and physician alike.

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Medical Information

This system develops a strategic and operational plan to bring the facility’s disparate medical
information services and systems into one logical and efficient system that supports
billing/reimbursement, clinical care, clinical research and regulatory compliance.

Clinical Decision Support System (CDSS)

CDSS is a system that combines two or more data elements pertinent to a specific patient and
leads the clinician towards a clinical decision specific to the individual patient case. Example of
this system is medical expert systems, medical artificial intelligence systems, and clinical
database systems.

CONCLUSION

Based on the review of information system in MITRA KELUARGA Hospital, and after realizing
the position of this hospital in the Porter’s competitive forces model, we can say that this
Hospital need more information system to gain its competitive advantage, regardless of the size
of the hospital/company and the country where they are, because in time they finally have to face
the globalization era.

Another thing to consider in this hospital is that in health care, information system can provide a
competitive advantage for management if the systems are implemented as modular parts of
information communication architecture rather than strictly as support for specific function, such
as billing, registration, cost accounting, and lab.

3.2 ALTERNATIVES TO SYSTEM

I. ENHANCING BUSINESS COMMUNITY RELATIONS: WIPRO

Introduction

Wipro is a leading Indian IT services provider, whose programme, “Applying Thought in

Schools” is aimed at ensuring children leave school equipped with skills which are demanded by

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today’s employers; the emphasis rests clearly on creative thinking and problem-solving. To
achieve this, teachers are invited to attend subsidised workshops where they have the chance to
learn new techniques and concepts. Moreover, to ensure application in the classroom, these
workshops are backed up with regular in-school sessions.

Company Profile

Wipro is a leading provider of IT solutions, with a profitable presence in other niche markets
such as consumer products and lighting. It services the needs of a diverse base of India's largest
corporate houses and multi-nationals, as well as being dominant throughout Asia-Pacific and
Middle East. It is listed on the National Stock Exchange, and has been the recipient of numerous
awards for performance and innovation.

The company has also undertaken a joint venture with GE Medical. With over two decades of
experience, 1900 employees and 275 business partners serving over 40,000 customers, Wipro
has stamped its presence on the Indian market and leads the Indian IT industry.

Project History and Development

“Applying Thought in schools” was launched in 2002 with the intention of enhancing the
creativity and problem solving skills of school children. The driving force behind this initiative is
Wipro’s belief that there is a need to reduce the gap between what is currently provided by
existing teaching techniques, and what is required by today’s organizations.

The mission of this initiative is to “transform the education system to achieve world-class
Quality of Learning”, with two broad aims: a) to enhance learning and thinking abilities, and b)
to have an impact on a large number of people. A summary of the programme philosophy is
given below;

 Learning is not a simple matter of information transmission – learning is an active

process in which people construct new understandings through exploration,
experimentation, discussion and reflection.
 The most important purpose of school is to help students understand the major
disciplinary ways of thinking – scientifically, historically, artistically, ethically and
mathematically.

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  Every child is intelligent in a multiple way – the real purpose of education is to help
young people learn how to create the lives they truly want to create, that is, expand
possibilities for them.

The modern workplace needs people who are rich in skills such as creative thinking, problem
solving, self-motivation, with a strong work ethic and the ability to work in teams. The
programme identified a series of problematic areas within the Indian education system: depth of
knowledge, practical orientation, poor social skills, and students studying to pass exams rather
than to learn and understand different concepts. These deficiencies were blamed on the absence
of synergy between the different participants in the education system.

The rationale for the project descends from the idea of a “knowledge economy,” in which the
nations with the best thinkers and learners will prosper. People who think and learn are the real
output of a successful, high-quality education system. Despite Wipro’s background however, the
programme is not restricted to IT. Instead, it is concerned with how creative thinking and
commitment can make a difference to everyday life.

Acknowledging the profound importance of teachers, the programmer’s focus is on teacher

empowerment and re-skilling, enabling them to effectively put into action innovative teaching
and assessment methods. It is a long term programme, with training spread over 6 months,
interspersed with classroom based support, and follow-up training to ensure actual practice
inside the classrooms. Schools are charged for participation in the training program – though the
cost is heavily subsidised. Wipro is also seeking to create partnerships in Bachelor of Education
colleges as well.

Effective measurement of change in thinking and learning abilities is a challenge to the project.
The Wipro strategy is to not only work at the school level, but to promote change at the national
level in order to make this change sustainable. Working with partners and opinion leaders helps
in the identification of schools that could participate in the project. Such collaboration also
improves the chances of the project impacting national policy.

The programme is based on some fundamental “building blocks.” These are practical aims or
objectives that shape implementation and are detailed below;

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  To transform the teacher into a “reflective practitioner” who is herself a “thinker and
learner”
 To encourage school leaders see their role as leading this transformation
 To help parents change their view of the true purpose of education as a result of the
importance of the “knowledge economy”
 To help education administrators change the curriculum from being “content heavy” to
“ability enhancing”
 To help education administrators change the school-leaving examination system from
being entirely focused on testing “memorization skill” to also testing abilities such as
creative and critical thinking, problem solving, learning to learn and so on

Implementation

The training programme is implemented through a local NGO called Jagruti. It involves 18 full
days of training for each teacher, spread over a 6 month period. Subsequent to this teachers
receive training modules from expert trainers, 12 days of classroom-based support and group-
based activities. The training is conducted in a manner of styles to ensure it is interactive and
effective.

Progress made

The project has made considerable progress in the last eighteen months. For example,

 Over 200 teachers have participated in the workshops, with school-based support to
follow
 Wipro is securing support from many partners all over the country, with aims to launch
further teacher-training programmes in new locations
 Workshops with parents are due to start in mid-October
 A ‘Forum for Quality in Education’ has been set up by Wipro to encourage opinion
leaders to discuss advocacy

Evidence collected by Wipro details examples of problems which were resolved through the
programme. Using a variety of teaching methods such as brainstorming and project work, for
example, has contributed to student engagement in the classroom as well as the improvement of

22
teachers’ skills. Time-management has also improved amongst teachers, which has meant that
administrative work is handled more efficiently and that disruptions do not reduce the
effectiveness of lessons. Techniques, such as “circle time,” have been introduced to maximise
student participation and contribution to their lessons. Indeed, classroom teaching has also been
made more stimulating through the use of teaching aids. The range of skills taught and tested has
been enhanced through the emphasis on concepts such as summarise, explain, organise, and
design. By adopting these new approaches, the traditional “spoon-feeding” approach can be
replaced by fact-finding. Teachers have also been given the opportunity to work on concepts
which they found difficult to explain, in order to make them more accessible and understandable
by pupils.

Wipro’s approach for learning

 The methods used for the training include short lectures (10 minute capsules), small
group discussions, collaborative learning within a group and school based support. The
following describes some of the problems faced by teachers/students and how these were
addressed through Wipro programme:
 There exists one dominant teaching style - chalk and talk – Wipro introduced them to
group work, brainstorming, case studies, projects and work sheets.
 Time management is a problem for teachers – They were taught concept of introduction,
how to prevent hijacking of class from interruptions and managing administrative work.
Teachers felt that their way of teaching changed from a haphazard use of techniques to a
more systematic and definite pattern.
 In a class of 40-50 students, only a few students tend to speak in class – The Wipro
programme used the concepts like “circle time”, in which each child got a chance to
speak about a certain topic. Listening skills, sharing ideas and providing opportunities for
each one to speak were some positive factors. Another concept of “Wait Time” was
introduced by Wipro, which gave the whole class thinking time of one minute to reflect
upon a question posed by the teacher. This challenged the usual mode of response in
which the cleverest children respond quickly to questions and so prevent others a chance
to come to their own conclusions.

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  Classroom teaching was not interesting – The company program made use of teaching
aids like newspaper clippings, models, and chart papers. One student feedback was – “my
teacher asked one by one the whole class what doubts we had.” One teacher observed that
it really helped students to think constructively, even the students who hadn’t opened
their mouths ever, are now coming out with brilliant ideas.
 Teachers test only the knowledge or memorizing skills of children – The Wipro program
gave tests to assess all 5 levels of critical thinking skills by using action verbs. Concepts
like summarising, explaining, solving, illustrating, deducing, organising, hypothesising,
designing etc. were introduced and explored between teachers and students.
 Teachers are not sensitive to the feelings of students – For this, the training provides
sessions on better communication skills, for example offering alternatives to sarcasm as a
way to reprimand a child.
 The usual method of teaching is ‘spoon-feeding’ and student does not indulge in any fact
finding – the methodologies under Wipro program ensured that students were engaged in
active learning. The teacher became more of a facilitator to the process of learning and
students actively did research and found out information rather than depending on the
teacher.
 Some topics are difficult to explain – Wipro program gives a 5-day session on subject
enrichment, which helps them to devise alternative methods to explain difficult concepts.
Some of the feedback which emerged from students was that they liked alternative
teaching methods like PowerPoint presentations by teachers, group activities, use of
models in the class, role plays, etc. Subjects like factorization, biology, geography were
made interesting through such methods and had a quick learning effect on the students

Key outcomes and lessons learned

“Applying Thought in schools” is an example of how a business can involve itself in knowledge
development and the enhancement of skills, which are important to both students and teachers.
The development of any nation rests on the quality of its human resources, which form the
cornerstone of a progressive and knowledgeable society. Quality education and training to

24
encourage creativity and innovation is vital to achieving this aim. It is interesting to not that
Wipro applies the same methodology of applying thought to its own in house training
programme.

The commitment of a leading national IT company to addressing the growing challenges in

education is commendable. Wipro is helping to enhance the experiences of both school children
and their teachers, while involving other parties in the wider aim of developing a more critically
thinking and creative society.

The future prospects for the project in terms of sustainability are excellent, as is evident from its
successful implementation at various sites, the planned expansion into other areas, and the
prospects for networking and involving other sectors of India’s economy.

The association of an IT company with educational institutions can lead to mutually beneficial
outcomes, as well as reaping wider benefits to business and society. Industry requires specific
skills of qualified manpower and this could be possible only when the educational institutions
provide the matching candidates to fulfill industry requirements. The matching of supply and
demand for these skills can be aided by closer relationships between industry and educators. This
is particularly important in the context of India, which has high levels of unemployed people
lacking the skills desired by employers.

Wipro’s educational project does not guarantee them any direct benefits in return. This suggests
that the company sees the benefits in the long rather than short-term – rather than as clients
today, as potential employees tomorrow. Further, that there is considerable value in developing
and harnessing the abilities of children, in a life-long learning process, to benefit society as a
whole. The fact that the training is not free for schools suggests that the training is in demand.
Schools need to add value into their lessons, and thus enhance the skills and capabilities of their
students. The programme therefore works as a partnership, serving the objectives of all
stakeholders – the company, schools, teachers, students, parents and society at large.

A company with broad vision can work effectively at a grassroots level. Direct involvement in
educational schemes such as “Applying Thought in schools” can be an effective mechanism for
successfully bringing about positive change and shaping the thinking of society.

25
II. NGO “HEALTH FAMILIES” IMPROVES ITS WORK CLIMATE

Scenario

“HEALTHY FAMILIES,” a nongovernmental organization (NGO), faces a difficult challenge:

fulfilling its service delivery mission while the national economy is in crisis and donor funding is
decreasing Over the past year, the NGO’s senior management committee has focused on
improving the financial sustain ability of Healthy Families by cutting costs at the
central office and increasing revenues at its 15 clinics. The committee is meeting today to review
the NGO’s cost recovery results. Overall, cost recovery has increased. Almost all clinics have
reduced their costs, and so has the central office to some extent, though it could
do better. The clinics have also generated more revenue by increasing service provision and
pharmacy sales During this same time, Couple Years of Protection (CYP) in the client population
has increased.
“Impressive results,” said Mrs. Gutierrez, Director of Outreach Services, “but I am concerned
about what is happening with our community-based health promoters. They have long been an
important part of our staff and are well known and respected in the community.
Many of them were unhappy at a recent staff meeting. Some are leaving their posts, and our
outreach in poor rural and urban areas is decreasing.”
“I have raised this issue before: How can we possibly serve those in need and at the same time
become more financially self-sustaining?” declared Dr. Gomez, Director of Clinical Services,
folding his arms over his chest.
“It is not a question of one or the other,” responded Mr. Rodriquez, Director of Finance, heatedly.
“We need to do both!”
“We all agree that both goals are important,” quickly interjected Mr. Campos, the Executive
Director.
“Clearly, exploring this issue will be a focus of our up coming strategic planning process. In the
meantime, I am concerned about this situation among our health promoters. What does it mean
that some of them are discontented and others are leaving? Are other staff discontented also? How
can we look into this?”
“We could have some health promoters and others participate in our strategic planning exercise,”

26
suggested a committee member “I think we should do something more immediate,”
said Mrs. Salazar, Human Resources Manager. “What about carrying out a work climate
assessment at our clinics and perhaps here at the central office as well?
We have been making change after change in the organization. How are people doing in the midst
of all this change? From what I have read and observed, if the climate in the work group is not
good, morale plummets and productivity goes down. Maybe people think we are more interested
in the bottom line than we are in them. Let’s find out.”

The committee asked Mrs. Salazar and her staff to con duct a work climate assessment at several
clinics. The results showed a substantial difference between actual performance and importance in
the areas of recognition. resources, and expectations. The senior management committee asked
department heads and all clinic directors to discuss the assessment findings with a cross-section of
their staff and identify ways to improve work climate without abandoning their service and
financial goals

Each clinic was asked to submit a summary of the discussion and suggestions, which the
committee plans to use to develop an action plan to improve work climate Managers and staff at
Santa Cruz clinic are meeting to discuss the assessment findings. “We are frustrated
by the new service goals,” said Mrs. Garcia, a health promoter. “Before, we did our job and got
our pay, which was never very much. We gave talks, encouraged people to come to the clinic for
services, and felt respected for our work. Now, instead of getting the raise
we deserve, we have to ‘earn’ a bonus by meeting cost recovery and service delivery goals. This
is hard to achieve in poor neighborhoods, where fewer people come to our outreach activities and
even fewer can take the time to come to the clinic for services.” “So it sounds as if you spend less
time in the poorer neighborhoods now and that this bothers you,” said Dr. Hernandez, the clinic’s
director of clinical services. Several promoters nodded “Now when people come to the clinic for
services after meeting with us, our referrals are not acknowledged,” said another promoter,
angrily. “Maybe it helps the nurses reach their own goals if they say these clients came in on their
own. We feel that no one cares about us any more.” “Feeling unrecognized and unappreciated is a
problem for us, too,” said Miss Malaga, a clinic nurse, frowning. “The clinic has not replaced
nurses who have retired. Those who remain have been told to see more people each day. Our

27
clients feel rushed, and we worry
that we aren’t providing quality services.” She paused, they heard about us or who referred them.”
“Before, we promoters used to have weekly meetings when we would talk about our difficulties
working in our communities and help solve each other’s problems, “said Mrs. Loyola, a promoter.
“Now we only meet once a month. Not all of us have a chance to speak. Before, these meetings
made me feel good about my work. Now they make me feel discouraged.”
“All of you are important to this clinic, this organization, and our clients,” said Dr. Hernandez.
“We want you to feel good about your work. What can we do to
improve our work climate?”
“This meeting is making me feel better already,” said Mrs. Garcia. “I didn’t realize the pressure
that the nurses are under.”“Why don’t we add a question about referrals to the registration form?”
asked Miss Hernandez. “Then I won’t have to take time to ask about referrals while I am
providing services.” “What about revising our goals for referrals from
poorer communities?” suggested Mrs. Loyola. “Or per haps we need to find better ways to attract
poor clients—perhaps change hour clinic hours or provide vouchers for our prenatal services. If
we promoters feel we can achieve our goals for these communities, then
we will be motivated to lead outreach activities there again. Also, please let’s meet every other
week instead of once a month.”

“I am very pleased that you have shared your concerns and ideas,” said Dr. Hernandez. “I will
summarize our conversation for the senior management committee. It seems clear that doing this
type of assessment and implementing improvement activities can help us improve our work
climate and, ultimately, improve ser vices for our clients—something we all strive for Thank you
for your participation today.”

CASE ANALYSIS
Problem
The main problem related to work climate in Healthy Families appears to center around changes
in the working conditions and perceptions of health promoters. The promoters feel that no one in
the organization cares about them. They feel their work is not respected. They feel angry and
frustrated by low pay and lack of recognition. In order to reach their service delivery goals, they

28
have abandoned poorer neighbor hoods and focused on better off neighborhoods. Nurses have not
been recording the health promoters’ referrals. Perhaps as a cost savings measure, the promoters
have been meeting with their supervisors once a month instead of once a week. This change has
reduced their opportunities to discuss work difficulties with their colleagues and has made them
feel discouraged about their work.

Expectations: Nurses want to provide quality services but are now expected to serve more clients
each day. They are not certain which goal is more important to the organization: providing quality
services or meeting cost recovery goals.

Purpose: Serving clients from poorer communities appears to be a longstanding goal of Healthy
Families. The health promoters, who are in direct contact with these communities, feel they must
abandon the poorer communities in order to reach their service delivery goals. They feel
conflicted about this change. It makes them feel discontented in their work.

Recognition: Due to the pressure to spend less time with patients, nurses have not recorded
referrals from health promoters.

Accommodating to changing circumstances: It appears that the nurses and health promoters have
accommodated to the new circumstances, for example nurses are spending less time with patients
and health promoters are doing less work in poor communities. At the same time, they do not feel
good about making these adjustments and there is a sense of ineffectiveness, which has a negative
impact on their sense of pride and also their level of commitment to shared goals. Overall, it
appears there was a lack of support and clarity regarding new service and financial
sustainability goals.
Policies contributing to negative work climate:
 reductions in staff as clinics do not replace nurses who retire
 failure of the bonus system to take into account special circumstances, such as the need to
lower goals in poor urban and rural areas
 failure by nurses to track referrals by health promoters,
 reduction in the frequency of health promoters meetings.

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Action suggested:
 conducting work climate assessments and discussion meetings
 holding health promoter meetings more frequently
 adding a question about referrals to the registration form.
 revising the service delivery goals for referrals from poorer communities
 making management adjustments, such as changing clinic hours to better accommodate
clients from poorer neighborhoods or providing vouchers for prenatal services
 In addition, a senior management committee member suggested involving health
promoters in the strategic planning process.

Suggestion to improve:
 do more capacity building/skill building of the promoters, so they feel stimulated and fully
understand the issues of financial sustainability as well as service
 provision in the NGO
 explore the barriers that inhibit or prevent poor people from attending outreach activities
or coming to the clinic for services, and develop strategies to overcome the identified
challenges
 conduct training and performance improvement of the promoters’ supervisors.

3.3 IMPACT OF SIS

I. NET READINESS AT CISCO SYSTEMS

Cisco Systems (cisco.com) richly deserves its self-designated title of “the worldwide leader in
networking for the Internet.”Virtually all of the data packets that swirl through the Internet pass
through a Cisco-manufactured router on their way to their destination. However, Cisco doesn’t
see itself as a computer hardware company. Instead, Cisco considers its main product to be
networking solutions. Through initiatives such as its Internet Business Solutions Group, Cisco
provides businesses with the software, support, service, training, and, yes, hardware, they need
to create an information infrastructure to become ebusinesses.

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In 2003, Cisco sells its products in over 100countries and employs 34,500 employees. In fiscal
year2002, Cisco Systems had almost $19 billion of revenue and ranked 95 on the Fortune 500.

How does Cisco fulfill its vision to be a complete network solution provider?
Three key strategic information systems that enable Cisco to reach up and down its value system.
Cisco has built a network linking its customers, prospects, business partners, suppliers, and
employees in a seamless value chain. The SISs that support that seamless value chain include the
three described below.

Cisco Connection Online

Cisco Connection Online (CCO) is its customer-facing SIS. The Cisco Web site (cisco.com) is
the gateway for customers to price and configure orders, place orders, and check order status.
CCO also offers customers the opportunity to help themselves to the information they need to do
business with Cisco. And they do access it: CCO is accessed over 1.5 million times each month
by its 150,000 active registered users. Customers use CCO to get answers to questions,
diagnose network problems, and collaborate with other customers and Cisco staff. Currently
Cisco is working with its major customers to integrate their enterprise applications directly into
Cisco’s back-end systems. The goals of this project are to provide better and speedier customer
service, lock in customers, and generate operating expense savings of $350 million per year.

Manufacturing Connection Online

Manufacturing Connection Online (MCO) is an extranet application that links Cisco’s partners
up and down its supply chain. Its purpose is to provide real-time manufacturing information to
Cisco’s suppliers and employees in support of the manufacturing, supply, and logistics functions.
MCO delivers forecast data, real-time inventory data, purchase orders, and related information
through a secure connection and a graphical user interface. One of the most successful aspects of
MCO is direct fulfillment. The old process had all products coming to Cisco for storage and then
shipment to the customer. MCO’s connections to Cisco’s suppliers allows Cisco to forward a
customer’s order to a third-party supplier, who ships it directly to the customer. By pushing
information down the supply chain instead of product up the supply chain, Cisco is able to
reduce hipping time, save money, and make customers happy.

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Cisco Employee Connection
Cisco Employee Connection (CEC) is Cisco’s inward-looking SIS, an intranet that addresses the
unique needs of every Cisco employee. CEC offers ubiquitous communications (e.g., distribution
of marketing materials, major corporate announcements), streamlined business processes (e.g.,
travel expense reimbursement), and integrated business systems (e.g., scheduling meetings, a
problem-reporting system). One application that illustrates CEC’s benefits to both Cisco and its
employees is Metro, a travel-expense reporting system. Assume an employee uses a corporate
credit card to charge an expense. Metro displays all expenses on a current credit card statement,
and the employee can then move all relevant charges to an expense report. In pre- Metro days, a
travel reimbursement took four to five weeks; Metro reimburses the employee in two to three
days.
Cisco has benefited richly from these strategic information systems. For example:
Eighty percent of technical support requests are filled electronically, reducing help desk labor
costs and almost always with a customer satisfaction rate that exceeds
that of human intervention.
Providing technical support to customers over the Internet has enabled Cisco to save more than
$200 million annually, more money than what some of its competitors spend on research and
development.
CCO metrics show 98 percent accurate, on-time repair shipments, and customer satisfaction
increased by25 percent between 1995 and 2000.
By outsourcing 70 percent of its production means, Cisco has quadrupled output without the time
and investment required to build new plants.
MCO has allowed Cisco to lower business costs in processing orders (from $125 per order to less
than $5), improved employee productivity, and reduced order
cycle times.
Metro not only reimburses employees faster, it increases employee productivity and saves Cisco
auditing costs. Today Cisco employs only two auditors to audit expenses for 15,000 Metro users
per month.
Cisco estimates total annual savings from CEC at $58million, including $25 million in employee
training savings and $16 million in employee communication.

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II. GLOBAL COMMUNICATION SYSTEM- THE HOME OFFICE-STATSOIL
An introduction of the Information System and those who uses it.

It is established an agreement between Statoil and the trade union of the use of “distant work” in
Statoil. The agreement gives the framework around how the units can use “distant work” as their
way of work. In addition to some important principles and attitudes around “distant work”, the
agreement says that ”distant work” must be considered from local circumstances. It’s the
manager who decides if “distant work” can be used.

If the “distant work” is used there shall be made an individual agreement with the user according
the organization of “distant work”. It’s made a standard form for such agreement.

The system demands a PC connected to the Internet. To connect to Statoil inside the firewall
there is used a system of codes.

The system uses an advanced bankcard similar to a calculator, where the users have a pin -code
of their own. When the pin-code is put in the calculator a 7-numbered code is displayed. The
code changes every 20 seconds. The calculator is synchronized to a server who operates the
security system inside the firewall.

When you are inside the firewall, the system demands an access which every Statoil employee’s
got, an access to your own system portfolio to Statoil’s server or mainframes

The name of the IT-system is ”Connect IT” (Win Frame).

Those who uses the system

Every employee in Statoil can get an access if they get an agreement with their manager.

“Distant work” requires that you have the type of work who permitting to use it, not those who
do shift-work, not the janitor, not the receptionist and not the nurses.

The reason for “distant work” can be various:

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  Geographical
 family matter (sick children, spouse…..)
 in a project phase
 in combination with study

The agreement can last for a shorter or longer period of time.

What the information system does

The system gives you the possibility to do your job satisfactory from home, without being at the
office.

You communicate at the same level as being at the office, but you miss the “face to face”
communication.

“Distant work” is a demanding way of work. This kind of work gives a hold lot of possibilities
what flexibilities are concerned, but it demands good management and defining of tasks. It also
demands good discipline from the employee.

“Distant work” on a regular basis is new in Statoil, therefore is it important to learn from earlier
experience and adjust this form of work to the local needs within those principles the ”distant
work” agreement gives.

There is no regulation on this area from the government, but they are working on it with legal
authority within “Working Environment Act”. But Statoil will still point out that the leader and
the employee consider these things when it comes to ”distant work” to take care of it in a good
way.

The agreement does not inform on which choice of computer equipment to use for “distant
work”. Each employee negotiates with their leader to get the equipment they need. Most of them
can use "IT-skritt” Pace’s as basis-tool. (This is PC’s and software that every Statoil employee
has got for use at home.) The agreement for "distant work” includes home office, work in other
arranged office environment in Statoil or other arranged place of work. This replaces the work at
ordinary place of work.

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“Distant work” can normally practice until 80% of agreed working hours. The rest must be taken
within the office. This because the "face to face” communication is an important part of working.

Strategic Information Systems (SIS)

SIS can change the goals, operations, products, services or environmental relationships to help
organizations gain an edge over competitors.

Information Systems can be used to support strategy at these levels:

 Business; low-cost producer, differentiate products, serve new markets

 Firm; achieve new efficiencies, enhance services
 Industry; promote competitive advantage by facilitating cooperation with other firms in the
industry, creating consortiums or communities for sharing information, exchanging
transaction or coordinating activities.

How is Statoil's Information System Strategic?

An effective IS a prerequisite for effective access to and good use of the real resource;
information. Statoil’s home office is a new way to organize business to try to gain competitive
advantages. With home offices the work can be both centralized and decentralized at the same
time. When the employees log on via the Internet, they are online with all their coworkers (who
work at Statoil's own office premises), and they gain access to the same information as they do
(SAP R/3, Lotus Notes, Internet...). The fact that information is "open" and easy accessible
enables a high degree of delegation, reduces the need for detailed supervision and allows a flat
organization. Home working can also yield greater efficiency because interruptions and stress
connected with the work situation are avoided; the employee is able to concentrate more fully
upon the work.

When Statoil chose SAP R/3 as a common platform for the administrative systems, they
developed and implemented an IT strategy; they determined, developed and maintained the
firm’s technological platform.
SAP R/3 is an administrative tool that helps ensure that all employees are well informed and that
the information systems provide a basis for the way Statoil organizes the work.

35
In Statoil’s recently launched BRA-program (Better, Faster Administration), the objective is to
establish common administrative work processes within the group, which will be supported
through the use of common IT-systems based upon SAP R/3. This is an example of how closed
processes are attempted to be “intercepted”, made more efficient and standardized through the
use of IT. This can help Statoil gain a competitive advantage, but only when the necessary
competence is developed. The objectives of using IT in closed processes will generally be
automation with a view to increased efficiency, reduced time consumption or increased quality.
IT used in a conscious, goal directed manner could result in a competitive advantage for a firm.
It is not the technology in itself that which adds value, but the way in which it is used in relation
to the firm
Nina Udnes Tronstad (head of Statoil Data) says: “Statoil has the capacity to develop and utilize
existing and new business opportunities and the capacity to understand the need for the
implementation of improvement measures in periods in which they are making money. (...) In
coming years we will commit ourselves to increasing employees' expertise in using PCs and the
necessary software through the IT-step. As a result of an ongoing strategy process in Statoil
Data, we will also be concretizing main fields of commitment in the time ahead, such as better
integration between IT and business, IT as a natural part of the improvement projects and
focusing upon the application of IT through simple and flexible solutions."

Where does the Information System add value to those who are implementing it?

"Businesses should try to develop Strategic Information Systems for the value activities that add
the most value to their particular firm"

Home-office

Administration and Management: Electronic Scheduling and Messaging Systems

Support Activities

Human Resources: Workforce Planning Systems

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 Technology: Computer-Aided Design Systems

Procurement: Computerized Ordering Systems

Outbound Sales and Service

Inbound Operations Logistics Marketing
Logistics

Primary Activities
Automated
Equipment
Computer-
Computerized
Automated
Warehousing
Maintenance
Controlled
Ordering
Shipment
System Machining
Systems
Scheduling
Systems
Systems
Systems

Statoil Home-office
Statoil Home-office adds most value to the support activities included in Administration and
Management and Human Resources. Home working additionally enables work to be carried out
from a wider geographical area. This offers both employers an employee greater flexibility with
regard to organization of the business. By moving the work to the employee’s home, the
company can save on costs in the form of office premises, electricity, insurance, etc. these saving
will however have the greatest impact where the employees basically work from home and do
not additionally have a permanent office in the employer’s premises. A shared workplace can
instead increase the costs to the employer.

37
Home working can also yield greater efficiency because interruptions and stress connected with
the work situation are avoided. The employee is able to concentrate more fully upon the work
travelling to and from the workplace is no longer necessary. However, this will only reap a full
reward for those employees who work solely at home. Those who partly work at home can
experience new stress factors, e.g. travelling to and from to attend meetings. Employees who
base their life upon home working in combination with looking after children, for example, can
actually end up being more greatly interrupted than at the workplace.

There can additionally be a risk of the real working hours becoming longer. This is especially a
factor for employees who work at home in addition to their usual work in the employer’s
premises. Home working opens up the possibility of producing work results within shorter
deadlines, because time which was previously “forced” relaxation can now be utilised. Where
rules which are intended to protect employees against excessive working hours are circumvented
in this way, it is dangerous.

An advantage with IT-based home working is that employees who have become permanently ill
or injured have a chance to carry out some work in the home. They are thereby able to maintain
greater contact with the workplace than would otherwise be the case. This must nevertheless be
seen in relation to the risk that the employee might feel pressurised to make a work contribution
at the same time as she or he is legitimately on the sick list.

One of the greatest drawbacks with home working lies in the employee’s isolation. This is
particularly pronounced for employees who work exclusively at home. Work communion and
social intercourse with colleagues is obviously reduced. Reduced contact can make it more
difficult to keep abreast of what is happening at the workplace, professional discussions, etc. it
might be feared that the employee might diminish his or her job and career opportunities as a
result of less direct contact with managers and colleagues,

New work forms as a consequence of IT will become a reality. It is therefore important that the
challenges are discussed and clarified at the earliest possible moment, such that we can at the
forefront of development in this field.

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Relocate the work rather than the people.
Developments within IT now mean that work can be carried out on a computer at home, while at
the same time allowing communication with employer and colleagues over the data network.
There are now considerably greater prospects than previously of this work from being able to be
integrated as a natural link into the rest of the business. In work with organisation development,
the possibility also exists of utilising the technology to relocate the work rather than the people.

Employees who wish to set up a home office particularly emphasise the need for flexible
working hours. The employees are able to tie the work in with other activities which are to be
carried out, e.g. child supervision.

Technology-facilitates
Information and communication technology is a facilitator.

 The accessibility of internal and external information that facilitates management and
control of all activities independent of time or place. It also facilitates external
information about the community, the markets the customers, partners and competitors.
This availability of information has facilitated the use of information as a production
resource in a completely different way than before.
 New work processes are possible through the use of information and communication
technology which changes the cost effectiveness in the entire scheme of production
logistics. We can perform our tasks at home, in the workplace, with our partners or on
holiday.
 The new work processes create new software that makes it possible for people to be
linked together in new ways. Somebody working with a problem in Oslo can be asked to
contact somebody studying the same problem in San Francisco, or the system tells of
information at various sources. Examples of such tools are Ibex, Web Ware and Lotus
Domino.

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  The new work processes are based on a combination of continuous learning and
innovation. This has actualized the discussion about organizational learning, that is, the
organizational forms that promote and inhibit learning and innovation.

Value Analysis of the Statoil Home-office

In 1997 there was a pilot project initialized by the IT and FT DT to test the values of Home-
office for Statoil. They where focusing on the following questions:

 Can it work as a working method?

 Does the technology work?
 How the follow is up and contact officiating?
 What is needed within office supplies/helping aids (own demands/ Statoil demands)?
 How is it evaluated bye the employees and leaders?
 In what degree will the problem solving be affected?
 How is the support working?

It wasn’t the technical solution that was the interesting part in this project, but the value of the
work done by the employee’s home compared to staying at the office. Could they present the
same amount of results?

Home office as a working method

The results of the analysis shows a positive attitude to the home office and it will most likely
work as a working method within Statoil.

The analysis also shows that most of the employees see the home office as a supplement to the
ordinary way of working, and thereby do not wish to have the home office as an alternative to or
behalf of the office place. The demand for flexibility, efficacy and a demanding job combined
with the wish to see more of the family, which is the most important reasons for the coworkers
wanting to work at home. The analysis also show that the home. office run best when it’s well
prepared and organized. It’s presumed that clear boundaries will make it easier to divide between
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work and home life.
Technology

The project used Win Frame-communication from IT-steps PC to the Statoil net. This was
working satisfactory most of the time, but there was problems with slow transmission time and
brake offs. For some of the users there has been a problem with applications and systems not
being reachable through the Win Frame. There was also a wish for printing opportunities.

Phonesollution
The majority of the users had a phonesollution with forwarding from the office phone to the
homophone through Voice Mail. The users was only medium satisfied with this solution, and a
suggestion of making a direct connection to the homophone was made after this analysis.

Office supplies/ helping aids

The users did not get extra office supplies and helping aids. Most of them had the necessary
equipment, but some where asking for office chair, printer and a file cabinet. Some also pointed
out that it could get to be expensive to pay for ink to the printer for themselves.

Follow up and contact officiating

There was no remarkable change in the change of follow up and contact with the leader, colleges
or external contacts for the home office users. It may seem like the amount of home working
should not exceed 2-3 days a week. It important to have a good planning, clear appointments and
good goal management to have a benefit of the home office.

The attitude for the home office among the workers and the leaders was very positive, and they
all seemed to think of this as a good way of working. Only a small percentage was negative to
the home office solution (3,2%).

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Changes in the way of work / problem solving
The analysis show little or one change in the way of working and problem solving. The users
who is working at home has adapted to the way of work in the organization, and half of the users
did not seem to think that it was necessary to change the way of work or routines within the unit.
This may be because of the users seeing this as a supplement and not as an alternative.

Support

There was little foundation to say anything about Statoil’s support for home office users, since
the analysis did not include this question of the technical information about the Win Frame
solution. But there was only a small part of the user group who thought they would need support
to the home office.

The result of the value analysis shows that most of the users would use the home office solution
while working for Statoil, but only 1-3 times a week. The value of work or results does not
decrease because of the home office. The value of prosperity actually increased during this
testing period.

4. INFERENCE

Analysis and review of all above cases related to strategic information system proves the
importance of strategic information system in today scenario in each type of industry whether a
manufacturer or a service provider. Strategic management is an important concept used now a
days because the environment in which various organizations are working become very complex
and competitive pressure on it is also increasing. Use of information technology for the strategic
management, increases its scope in the organization.

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We have analysed the various case related to strategic information system on various aspects
such as current issue, alternative to system and its impact:

In first case of stevens hospital, hospital was facing some problem like outdated information
system, minimum functionality of database system etc. So, this hospital needs some IT initiative
to solve their problem. By adopting a five year road map for strategic information system, the
company is able to solve its problem easily and achieve a competitive edge in the industry.

In second case, Dell use the concept of strategic information system by doing value analysis of
its business and adopting a strategy of build-to-order(BTO).

In case of Rosenbluth, company face severe competition from its competitiors. Its various
competitors are threat to its existence. So, there is need to use IT innovations and by using it, the
company not only survived the threats of elimination but has become the third-largest travel
management company in the world and a leader in customer service, travel technology, and
integrated information management.

In case of walmart, the company uses SIS for making their supply chain effective and efficient
and achieve various benefits of it.

In case of Mitra Keluarga Hospital, the various type of information system which is used by
hospital are analysed properly and with the help of Porter’s model, various forces related to
hospital are analysed and suggestion is given to it to adopt other type of SIS which help it in
strategic management.

In current issues, we analysed the current problems faced by the company and how SIS help
them to solve it.

In case of Wipro, the various concept of learning used by company to train its employees and
bring change in its business to reenginner are presented and this can be used as an alternative to
SIS.

In case of NGO, for effective strategic management what is needed by the organization is
presented with the help of meetings, training and work assessment.

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In case of Cisco, the use of three key SIS help the company to have a drastic change and its
impact to the company and industry is given.

In case of Statsoil, the impact of SIS on employees is given. Both benefits and backdrops of SIS
are given.

Almost any information system may be called "strategic" if it aligns the computer strategies with
the business strategies of the organization, and there is close cooperation in its development
between the information Services people and operational business managers. There should be an
explicit connection between the organization’s business plan and its systems plan to provide
better support of the organization’s goals and objectives, and closer management control of the
critical information systems.

Many organizations that have done substantial work with computers since the 1950’s have long
used the term "strategic planning" for any computer developments that are going to directly
affect the conduct of their business. Not included are budget, or annual planning and the
planning of developing Information Services facilities and the many "housekeeping" tasks that
are required in any corporation. Definitely included in strategic planning are any information
systems that will be used by operational management to conduct the business more profitably. A
simple test would be to ask whether the president of the corporation, or some senior vice
presidents, would be interested in the immediate outcome of the systems development because
they felt it would affect their profitability. If the answer is affirmative, then the system is
strategic.
Strategic system, thus, attempt to match Information Services resources to strategic business
opportunities where the computer systems will have an impact on the products and the business
operations. Planning for strategic systems is not defined by calendar cycles or routine reporting.
It is defined by the effort required to impact the competitive environment and the strategy of a
firm at the point in time that management wants to move on the idea.
Effective strategic systems can only be accomplished, of course, if the capabilities are in place
for the routine basic work of gathering data, evaluating possible equipment and software, and
managing the routine reporting of project status. The centralized planning and operational work

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is absolutely necessary as a base from which a strategic system can be planned and developed
when a priority situation arises. When a new strategic need becomes apparent, Information
Services should have laid the groundwork to be able to accept the task of meeting that need.
Strategic systems that are dramatic innovations will always be the ones that are written about in
the literature. Consultants in strategic systems must have clearly innovative and successful
examples to attract the attention of senior management. It should be clear, however, that most
Information Services personnel will have to leverage the advertised successes to again funding
for their own systems. These systems may not have an Olympic effect on an organization, but
they will have a good chance of being clearly profitable. That will be sufficient for most
operational management, and will draw out the necessary funding and support. It helps to talk
about the possibilities of great breakthroughs, if it is always kept in mind that there are many
strategic systems developed and installed that are successful enough to be highly praised within
the organization and offer a competitive advantage, but will not be written up in the Harvard
Business Review.

A competitive strategy is a broad-based formula for how a business is going to compete, what its
goals should be, and what plans and policies will be required to carry out those goals. Through
its competitive strategy an organization seeks a competitive advantage in an industry—an
advantage over competitors in some measure such as cost, quality, or speed. Competitive
advantage is at the core of a firm’s success or failure; such advantage seeks to lead to control of
the market and to larger-than-average profits. A strategic information system helps an
organization gain a competitive advantage through its contribution to the strategic goals of an
organization and/or its ability to significantly increase performance and productivity. An SIS
enables companies to gain competitive advantage and to benefit greatly at the expense of those
that are subject to competitive disadvantage. Competitive advantage in the digital economy is
even more important than in the old economy, as will be demonstrated throughout this chapter.
For some businesses the impact of the digital economy is revolutionary. Frequent changes in
technologies and markets and the appearance of new business models can introduce radical
changes in industry structure and the nature of competition can shift rapidly.
At the same time, the digital economy has not changed the core business of most firms. For most
businesses, Internet technologies simply offer the tools, sometimes very powerful tools that can

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increase their success through their traditional sources of competitive advantage — be that low
cost, excellent customer service, or superior supply chain management.
Originally, strategic information systems were considered to be outwardly focused—that is,
aimed at increasing direct competition in an industry and visible to all. For example, strategic
systems have been used to provide new services to customers and/or suppliers, to increase
customer switching costs, and to lock in suppliers, all with the specific objective of achieving
better results than one’s competitors. But since the late 1980s, strategic systems have also been
viewed inwardly: They are focused on enhancing the competitive position of the firm by
increasing employees’ productivity, streamlining business processes, and making better
decisions. These approaches may not be visible to the competitors and therefore are not as easily
copied.

Advantages of Strategic Management through Information Systems.

There is general agreement that strategic management through information systems is those that
may be used gaining competitive advantage. How is competitive advantage gained? At this
point, different writer’s list different possibilities, but none of them claim that there may not be
other openings to move through. Some of the more common ways of thinking about gaining
competitive advantage are:

 Deliver a product or a service at a lower cost. This does not necessarily mean the
lowest cost, but simply a cost related to the quality of the product or service that will be
both attractive in the marketplace and will yield sufficient return on investment. The cost
considered is not simply the data processing cost, but is the overall cost of all corporate
activities for the delivery of that product or service. There are many operational computer
systems that have given internal cost saving and other internal advantages, but they
cannot be thought of as strategic until those savings can be translated to a better
competitive position in the market.
 Deliver a product or service that we differentiated. Differentiation means the addition
of unique features to a product or service that are competitive attractive in the market.
Generally such features will cost something to produce, and so they will be the setting

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 point, rather than the cost itself. Seldom does a lowest cost product also have the best
differentiation. A strategic system helps customers to perceive that they are getting some
extras for witch they will willingly pat.
 Focus on a specific market segment. The idea is to identify and create market niches
that have not been adequately filled. Information technology is frequently able to provide
the capabilities of defining, expanding, and filling a particular niche or segment. The
application would be quite specific to the industry.
 Innovation. Develop products or services through the use of computers that are new and
appreciably from other available offerings. Examples of this are automatic credit card
handing at service stations, and automatic teller machines at banks. Such innovative
approaches not only give new opportunities to attract customers, but also open up entirely
new fields of business so that their use has very elastic demand.
 Changes in processes. IT supports changes in business processes that translate to
strategic advantage.
 Links with business partners. IT links a company with its business partners effectively
and efficiently.
 Relationships with suppliers and customers. IT can be used to lock in suppliers and
customers, or to build in switching costs (making it more difficult for suppliers or
customers to switch to competitors).
 Competitive intelligence. IT provides competitive (business) intelligence by collecting
and analyzing information about products, markets, competitors, and environmental
changes.

Strategic Management through Information System in HCL

HCL Info systems has incorporated well developed ERP system that uses the System
Application & Product (SAP) software which helps the company to gain competitive edge by
integrating all the business process and optimizing the resource available. It has adopted SAP
R/3 version. System Application Product (SAP) is a product of Germany that helps in data
processing.

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Planning: HCL Infosystems Ltd has separate planning (demand & supply) division which is
integrated with well developed System Application Product (SAP). On the basis of demand
management, planning is done for required raw materials with support of SAP. The following
activities are involved in planning:

 Capacity decision – Planning will make decision whether to make or buy. The planning
personnel will see the capacity of the existing plant and will see the feasibility of in
house production or outsourcing.
 Regulatory approval – Demand and supply management will see the availability of plant
and its regulatory approval.
 Financial planning – Demand and supply management will do the financial analysis with
the help of finance department. In financial analysis, the planning personnel will see in
which plant it is feasible to produce.
 Rolling production plan – Demand and supply management will run rolling production
plan through which system will give the information about the holding inventories,
strategic holding and major variances as compare to last month. On the basis of rolling
production plan, purchase requisition (PR) is generated.

Material Sourcing: HCL Infosystems Ltd has independent in built procurement division with
well developed SAP support headed by director (materials). It has separate division for high
value materials. On the basis of purchase requisition, the materials sourcing will do the following
activities:

 Request for Quotation – After receiving purchase requisition, material sourcing division
will float inquiries and generate requisition for quotation from different suppliers. For
each item, purchase department is required to send RFQ to three vendors. In case where
purchase requisition specifies the brand of particular need to be acquired, in that case
only one RFQ need to be sent.
 Quotation Comparison Form – On the basis for request for quotation, material sourcing
will prepare quotation comparison form. Three important thing i.e. amount, payment
period and taxes are compared.

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  Purchase Order – The quotation comparison form is signed by different concerned
authorities depending upon the amount. After duly signed by the concern authorities,
material sourcing division releases purchase order.
 Types of Purchase – After purchase order is generated, purchase personnel will plan
about types of purchase. They do planning whether they should go for one time purchase
or to have contract purchase or go for scheduling agreement.
 Storage location – The purchase depart while preparing the purchase order would ensure
to mention complete name as HCL Infosystems Ltd, manufacturing and address / location
of delivery of the material.

Warehouse Management: HCL Infosystems Ltd has well developed independent warehouse in
different plant location with proper SAP support. The following activities are followed by
warehouse department:
 Material Delivery – Warehouse will take material delivery as per purchase order.
Warehouse person will enter purchase order in the system; system will check purchase
order plan quantity and actual receipt with tolerance level condition.
 Quality Inspection – after taking delivery of stock, warehouse department will send the
stock for quality inspection. HCL Infosystems Ltd has separate department for quality
inspection. Stocks that are in quality inspections are kept in different storage and samples
that are still to inspect are kept in block stock and goods receipt block stock. After getting
green signal from quality inspector, it is uploaded in SAP and stock will move to
unrestricted storage locations.
 Goods Receipt Note – On the receipt of material, purchase department will arrange to
prepare the goods receipt note and respectively head will approve the same. Centralized
account department will verify the invoice with purchase order through SAP support and
arrange to release the payment to vendor.

Production planning: HCL Infosystems Ltd has world class manufacturing facilities in four
countries. Its overseas facilities are designed to cater to the requirements of the local regulatory
bodies of that country while Indian facilities meet the requirements of all International
Regulatory Agencies.

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After getting green signal from the quality inspector, the stock in unrestricted block is utilized for
production purpose. The production planning department will produce goods in coordination
with warehouse and supply chain department.

Supply Chain Management: HCL Infosystems Ltd has separate supply chain division headed
by director. The company has Advance Planner and Optimizer across the entire spectrum of
marketing, sourcing, manufacturing, quality control and logistics. Use of this tool has
significantly improved customer servicing, reduce inventories and ensure day 1 launches of new
products in various countries.

The role of supply chain management is to arrange logistics and to deliver the finished goods to
the demand management at minimum time, taking minimum cost, wastage, insurance, handing
charges into consideration.

5. CONCLUSION

The above analysis of different cases concludes that in today’s highly competitive modern era if
a business firm needs to survive in the market even at the break even level then the
implementation of an effective information system through out in its organization is quite a
crucial factor in the decision making process of the management.

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No organization can take a chance to ignore the importance of information system while taking
the top management decisions.

Information system needs to be the part of the organization only then it can think for the
effective strategic management and can succeed in its various goals of growth, competitive
advantage & a leader in the market. A recent survey by an organization itself shows how crucial
the information system is for the business. It states that with the implementation of information
system in the organization it has been able to:

 Reduce cost/Improve Productivity

 Improve customer satisfaction/loyalty
 Create competitive advantage
 Generate Growth
 Streamline Supply chain
 Incredible Global Expansion

The above given conclude that doing Strategic Management through Information System has
really helped the organization to succeed and sustain in this highly competitive modern era.

REFERENCES

BOOKS

 “Gupta A.K.”, “Management Information System”, “S.Chand Publication, First Edition.

 “O’Berin James A.”, “Management Information System”, “Tata McGraw-hill Edition”,
Edition-1999,

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  Books and manual of HCL.

WEBSITES

 www.rs-mitrakeluarga.com
 www.scribd.com
 www.hitachiconsulting.com
 www.cisco.com
 www.dell.com
 www.wikepedia.com

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