MAJOR BUSINESS INITIATIVES: GAINING COMPETITIVE ADVANTAGE WITH IT

 Giving an emphasis on the competition that intensifies in an industry.

 Companies must develop an innovative products, services, and business processes to compete
and survive.
 OBJECTIVE: Focus on supply chain management, customer relationship management, and e-
collaboration

SUPPLY CHAIN MANAGEMENT

 Distribution chain – the path that a product or service follows from the originator of the
products and service to reach its consumers, we use distribution chain; it might be one-way
channel, two-way channel, etc. EXAMPLE: wholesales to retailer to end customer.
 Supply Chain management – tracks the inventory and information among business process and
across company.
 Supply chain management system – an IT system that supports SCM activities by automating
the tracking of the inventory and information among business processes and across companies.
A lot of companies or manufacturing companies uses Just in Time (JIT) manufacturing processes
that ensures that we have right parts that is available in products. It focuses on making sure that
there are right number of parts or products that are available.
 Just In Time (JIT) – method for producing or delivering products or services just at the time a
customer wants it. Too many products on hand means too much money tide up on inventory
that led to increased of risk of obsolescent. Few products could shutdown business that led to
loss of sales.
 Inter-modal transportation – use of multiple channels of transportation made through the
means of railway, truck, boat, ship, etc. Movement of products by means of transportation and
it further complicates the logistics of SCM.

STRATEGIC AND COMPETITIVE OPPORTUNITIES WITH SCM

- Squeezing every penny possible out of supply chain process.

- Primary focus of SCM: On overall cost leadership, below the line initiative cost reduction,
running the organization.
- A well-define SCM system helps organization by optimizing the following specific Supply chain
activities:
1. FULFILLMENT – ensures that the right quantity of products for production for sale arrive at
the right time.
2. LOGISTICS – it keeps the cost of transporting materials as low as possible, consistent with
the safe and reliable delivery.
3. PRODUCTION – product lines ensure function that processes smoothly because there’s high
quality parts that are available when needed.
4. REVENUE AND PROFIT – it ensures that no sales are loss/lost because shelves are empty.
5. COST AND PRICE – keep the cost of purchased parts at acceptable level.
CUSTOMER RELATIONSHIP MANAGEMENT

 Customer relationship management system – It is good to have a good prediction towards the
behavior of your customers and know what they are needs. Acquiring customers and retaining
them are basic objectives of organizations thus we need CRM. CRM uses information about
customers to gain insights into their needs, wants, and behavior in order to serve them better.
 Multi-channel service delivery – term that describes a company’s offering multiple ways in
which customers can interact with it (through email, fox phone, and social media). Fundamental
goal of CRM is that management and tracking of interactions are visible in an organization.
 Sales force automation (SFA) systems – it automatically tracks all the steps in the sale process
(sale process contains a lot of steps including contact management, sales lead tracking, sales
forecasting, and order management) Some basic SFA system performs sales lead tracking or
listing potential customers for sales to contact.

IT SUPPORTS FOR CUSTOMER

1. Front Office System – these are the primary interface to customers and sales channels; they
send all the customers information they collected in database.
2. Back Office System – they are used to fulfill and support customer or customer orders and they
also send all their customer information to the database. CRM System analyzes and distributes
the customers information and provides organization with complete view of each customers
experiences in business. (Tracks feedbacks)
- Typical Back Office System function such as order fulfillment which would have direct ties in
SCM system; creates synergy between CRM system and SCM system.

E-COLLABORATION

- The following supports e-collab:

 Work activities with integrated collaboration environments
1. Workflow system – facilitates the automation and management of business processes.
Workflow defines all the steps or business rules from beginning to end and required for
business process (bank process)
2. Document management system – manages the document through all stages of its
processing; similar to workflow system except that it focuses on documents, storage, and
retrieval.
 Knowledge management with knowledge management system
- Knowledge management system is an IT system that support the capturing, organizing, and
dissemination of knowledge, know-how through-out the organization.
- OBJECTIVE: To be sure that a company’s knowledge of facts, sources of information, solution,
patents, trademarks are available to employees whenever they will need it.
  Social Networking with social networking systems – it is a site on which we post information
about ourselves; create network of friends.
- Social networking system is an IT system that links you to people you know.
 Learning with E-learning tools – these are IT enable system that facilitates learning. EXAMPLE:
Blackboard, E-college, MS Teams -these are tools that serves educational platforms)
 Informal collaboration to support open-source information – these are integrated
collaboration environments; e-learning tools that are vitally important in an organizational
resource.

IT CULTURE – an organizational perspective.

- Refers how the IT function is place structurally within organization and organizational
philosophical approach to the development and deployment and use of IT.
1. The structuring of its function
2. The organizations philosophy as to use of it
At least 3:
 Top-down silo – this approach in an organization could create department or IT function
that is devoted exclusively to everything related to technology like project management,
capacity processing, etc. These approach exhibits command and control management
system.
 Matrix approach – find a separate IT department or function; its role/goal is to maintain the
IT personnel within the IT department. IT considerations such as budgeting, project
management, capacity processing, etc needs a significant input from the other functions
 Fully integrated througout the organization – many IT personnel are now located within the
other functional units. Although there is usually a separate IT department or function, this
integrated IT people to have their own budget and can approve department projects and
can initiate end user development of smaller projects.

ENTERPRISE RESOURCE PLANNING

 bringing all IT together.

 Collection of integrated software for business management, accounting, financing, project
management, transportation, etc. to have SCM that is related and integral software.

CHARACTERISTICS OF ERP THAT REQUIRED TO HAVE

 Modular design comprising many distinct business functions such as financial, manufacturing,
and distribution.
 A centralized database that organizes and manages information
 Integrated functions that provide seamless information flow among them
 Flexible best practices
  Functions that work in real time
 Internet-enabled.

CORE FUNCTIONS: accounting, finance, manufacturing, sales, distribution, and transportation

PROCESS MANAGEMENT

MANAGEMENT EFFECTIVES

 MNegandhi Estafeni provides a good model for the analysis of management effectiveness which
generates enterprise effectiveness in achieving the goals and objectives
 Estafeni created a model to put emphasis on the management philosophy and that model is the
environment factors on which the effectiveness is dependent.
 The environment factors provide the opportunities to survive and grow with certain constraints
while the management philosophy sets guidelines for deciding the management practices to
run the enterprise
 The process of management begins with setting of goals, objectives and targets. The goals are
long term aims to be achieved by the organization, objective are relatively short term
milestones to be accomplished, while targets are generally refer to physical achievements in
organization’s business
 The environment factors are very difficult to control and it is left for the management to change
its philosophy towards various players in the business such as employees, consumers, suppliers,
government, community, shareholders, etc.
 Basically it is a change in attitude towards the player. If an attitude is a threat to the business
partners, you will empowered them and create a sense of belongingness to the organization.
That attitude will have an impact on the management practices where the employee will play
decisive critical roles. It will affect the organizational structure in reducing the size and reporting
levels.
 The purpose of goals, objectives and targets are to help each other and help to achieve each
other’s objective. They’re going to achieve it within a stipulated time.
 Setting goals, objectives and targets will align you to the plans that are related or connected to
your business goals

1. PLANNING
 Planning is basic to all managerial functions. It is a process of selecting one course of
action from different alternatives, for achieving the stated goals, objectives and targets
 It is a decision making process determining in advance what to do, when to do, how to
do and what is
 Planning creates a frame of activity and events which are to happen or a runway for
achieving corporate goals, objectives and targets.
  Planning process demands resource allocation through decision making. The
organization may have a plan but the question is how effective the plan is.
 The efficiency of a plan can be measured by the amount it contributes towards the
achievement of a goal. The plan is very efficient with the goals and it will have a lesser
investment and resources by anticipating the possible risks that might happen. So it
helps us to handle the change which occurs in the environment and can affect the plan
itself.
 Planning helps to make operations economical as it continuously evaluates the costs
and outputs as well as it forces optimum use of resources.

2. ORGANIZING
 It is an important step in managerial process and relates to the people in an enterprise
 It deals with a quantitative and qualitative aspect of manpower in terms of placement,
roles and relations amongst them with the aim of working together effectively towards
accomplishing the organization’s goals, objectives and targets. In essence, it deals with
organizing the manpower resources for a given plan of execution.
 Organization can be formal or informal
 Organizing is a process by which managers can bring smoothness of an operation
 By way of conflict resolution, assigning work responsibilities, or by creating an
appropriate work environment of things work will lie on the process of organizing.
 There are certain important factors to pay attention and which can be organized things
as well
 Organization can be formal, that means that their roles and relations of people as well
as achieving well defined objectives and steps
 Organization can be informal, it is left to the people to understand and evolve suitable
roles and relationships to achieved those objectives. So while creating an organization, it
is actually given to the have an appropriate functions, activities, or even proper
grouping of dept.

IMPORTANT FACTORS OF ORGANIZING

 ORGANIZATION LEVELS AND THE SPAN OF CONTROL

o This factor deals with grouping the people in hierarchical form, determining the
levels in the organization. The levels get determined by the span of control, i.e. how
many subordinates in an org can be manage superior
o This number can vary anywhere, between 4 to 8 in the higher levels of
management or 8 to 15 in the lower level of mngt. They’re going to discuss the
strength and weaknesses of each other as well as the degree of delegation and
responsibilities that are willing to attain by the superior.

 DEPATTMENTATION
 o Departmentation is a process of breaking an enterprise into smaller groups and
levels. There is a number of ways to break the enterprise.
o A widely accepted is by functions of the enterprise such as marketing, production.
Finance, personnel, materials, etc.
o The second method is based on geographic area distribution. This method is
resorted to when the distances are long, the activities are many and the decision
making is decentralized
o Department depends on the products and services provided by the company. Each
department in an org brings operational convenience, they also create appropriate
responsibility which facilitates a formal and informal communications. It also
permits an evaluation of activities by smaller groups as well as it provides control
and decision point on the top management.

 RELATIONS OF LINE AND STAFF FUNCTIONS

o The function of a department can be a line or staff.
o The functions which have a direct responsibility of achieving the targets for
production or sales are line functions
o The staff functions are those which do not participate directly in the activity but
aid line functions to achieve the targets. Production, planning, marketing,
purchasing, etc. are staff functions. The distinction is more clear and precise at
higher levels
o The staff functions are an advisory but owns the responsibility for every result.
They are accountable. Therefore the performance of the line function depends
on how the staff function plans the activities.

 DELEGATION OF AUTHORITY
o The function is either line or staff function, but still it requires decision making. As
one person cannot plan, execute and control all the tasks in the functions, owing to
the limitations of time and capacity, it is necessary that the decision making is not
centralized at one point.
o Handling over limited authority of decision making to the subordinates is called
delegation. The concept of delegation is based on premise that the individual can
take decision if supported by info, knowledge, or guidance and if it is motivated
enough to perform. It accepts a responsibility of non performance and mistakes.

 TOWARDS EFFECTIVE ORGANIZATION

o Organization is an activity of building a structure of roles and relations of people to
secure coordination of individual efforts to achieve common stated goals, objectives
and targets.
 o The failure in an organization occurs due to the failure to plan properly, to delegate
the authority and due to the confusion of relation and authority.
o Failures also occur on the account of imbalance in line functions with the relation on
staff functions.
o Organization can be effective if it’s designed for the unity of goals and objectives
which is very precise when it comes to planning.
o It will be effective and will work on the principle of command, delegation, authority
and responsibility

3. STAFFING
 The function of staffing deals with manning the enterprise as per the organization
structure so that they together implement the process of the management.
 Staffing involves not only selection of a person but also appraisal and development so
that they perform their designated roles
 Staffing of enterprise should be for today as well as that of the future. The requirement
of the future is difficult to predict in precise and this requirement needs to be
forecasted for more than five to six years
 Selection is difficult but the chances of choosing the wrong one will be lesser.
 Its purpose is not manning for the current plan of the business but to create a
manpower potential capable of doing the development so that the manpower is able to
perform the change role in the future.

4. COORDINATING AND DIRECTING

 After organizing the resources and staffing the planned activities, the business plan is
launched.
 The process of implementing the plan is dynamic. It calls upon the manager to perform
a number of things in a coordinated manner so that the plan remains valid and the
development takes place as per the plan
 The process meets with a number of difficulties and the manger is supposed to resolve
them.
 There will be always lag and leads in the activities, as well as shortfalls and overruns, so
it means that there will be a sudden development that can distract or disturb the plan
and the process of implementation
 The role of the manager is to coordinate all the activities and provide leadership to the
group to continue the plan.
 Directing and leading are methods whereby the subordinates are lead to chuchu
purpose of the activity by way of guidance and contingency plan.
 The task of leading and directing becomes more effective if it is taken care by motivating
the people.
 5. CONTROLLING
 This is the most important step, the successful execution of management plan. Without
control, the process becomes unproductive.
 Its purpose is to regulate the process in such a way that the management process
continuously strives for the achievement of the goals, objectives and targets.
 Controlling is done through a system. This system measures the performance of the
management it terms of some pre-define measures of output. It compares the output
with a standard, then identify the deviations from this standards.
 It corrects the management process to ensure that the plans will continuously effective
in terms of achieving goals, objectives and targets. The control system is very important
because it is one way of monitoring such as taking corrective actions as well as
reallocation of resources like cash flows

MIS : A TOOL FOR MANAGEMENT PROCESS

 The process of management requires a lot of data and information for execution of the
plan
 This requirement arises on account of that in each step of management, a variety of
decisions are taken to correct the course of development.
 The decisions or actions are prompted due to the feedback given by the control system
incorporated in the management system.
 The control of overall performance is made possible by way of budget summaries(day to
day tasks, sales, costs, investments, profits, etc) and reports
 If the effectiveness of management is measured, it needs to respond the business
information,
 Mngt performance improves the business risks and uncertainties which are handled
very effectively.
 In operating a company, business and financial risks are the 2 risks that need to be
anticipated.