Strategic Information System Analysis for Coles Supermarket Australia

This report provides a comprehensive analysis of the strategic information system (IS) implemented by Coles Supermarket Australia Pty Ltd, the second-largest retail corporation in Australia. It begins with an overview of Coles' structure, products, and services, highlighting its operations and functionalities. The report then emphasizes the critical need for a robust IS strategy within Coles to enhance its competitive advantage, particularly in supply chain management, customer engagement, and operational efficiency. It discusses the utilization of technologies like cloud computing, automated replenishment, big data, and BYOD programs. Furthermore, the report addresses the challenges faced during IS strategy implementation, such as resource limitations, user resistance, and alignment issues, while offering recommendations for improvement, including better IT specialist training, aligning business and IS strategies, and fostering improved communication and coordination within the organization. The report concludes by summarizing the key findings and the importance of strategic IS for Coles' future success.

Running head: STRATEGIC INFORMATION SYSTEM 0
Strategic Information System

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Table of Contents
Introduction................................................................................................................................2
Structure, Products, and Services of Coles................................................................................3
Coles’ Operations and Functionality..........................................................................................4
Requirement of Information System Strategy in Coles.............................................................5
Challenges and Recommendations for Coles’ Information System Strategy............................7
Conclusion................................................................................................................................10
References................................................................................................................................11

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Introduction
The competition between modern firms has grown substantially which require them to
implement strategic policies that are focused towards increasing their performance. This
report will analyse strategic information system in a modern corporation to understand its
role and influence in company’s operations. Information system (IS) strategy is referred as
organisational policies that interact with company’s environment and assist in sharing
information between different departments. Information system allows corporations to
merger their business structure with technology that assist in better planning and executing of
objectives and it also transforms as per market conditions. In past decade, information
systems have become more sophisticated which allow enterprises to improve the efficiency of
operations and expand their business worldwide.
Effective implementation of information system allows corporations to generate a
competitive advantage over their competitors because it provides better communication
channels, decreases operating expenses, reduces human errors and improves the overall
efficiency of operations. This report will evaluate the structure, products, and services of
‘Coles Supermarket Australia Pty Ltd’ which is Australia’s second largest retailing
corporation. The report will discuss operations and functionalities of Coles to provide an
Information System Strategy that can improve overall performance and efficiency of the
enterprise. Further, various problems will be discussed in the report that occurs during
development and implementation of an Information System Strategy and recommendations
will be given to address such challenges.

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Structure, Products, and Services of Coles
‘Coles Supermarkets’ was founded in 1914 by George Coles, and it is Australia’s second
largest retailing corporation after Woolworths limited. The company operates in supermarket,
retail and customers services industry and it has more than 800 supermarkets throughout
Australia. In 2007, Wesfarmers bought Coles Group for $22 million which was Australia’s
biggest takeover (Carson, 2007). The corporation is known for provided its products are
lower prices than compared to its competitors; it offers various services to its customers in
order to improve their shopping experience. The head office of Coles is situated in Hawthorn
East, Melbourne, Australia. The company has more than 100 thousand employees working in
its stores throughout Australia (Coles Careers, 2017). The main competitors of Coles include
Woolworths, ALDI, Big W IGA and others. According to Keith (2012), the corporation is
known for offering their products at lower rates along with heavy discounts; the primary
functions of the enterprise are associated with lighting, refrigeration and emission control.
The company controls its emission by effectively implementing energy saving initiatives into
its business operations.
In 2016, the corporation generated revenue of AU$33.00 billion whereas, in 2017, the
corporation reported that its profits are down by 13.5 percent to AU$1.61 billion (Chung,
2017). In past few years, the enterprise is not generating revenue as expected, therefore, the
management of the firm is raking various strategic actions to address the profitability issues
and increase its competitive advantage. The company offers a wide variety of products to its
customers that include food, beverages, fresh vegetables, meat, liquor, financial services, and
many others. The corporation serves more than 20 million customers each week and the firm
ensure that it is fulfilling its corporate social responsibilities (Coles, 2016). The corporate
also provides its services through online platforms which allow its customers to buy products

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online and then company delivers them directly to their homes. The corporation allows its
online customers to select the delivery time which is most suitable for them to simplify the
process of shopping. Coles offer fresh vegetables and meat to its customers whether they are
buying from supermarket or online store (Coles Online, 2017). The company has collaborated
with ‘Shell’ to offer their services in Australia and New Zealand through their petrol pumps;
the firm provides its services in petrol pumps as ‘Coles Express’ (Coles Express, 2017).
Coles’ Operations and Functionality
After the takeover of Coles by Wesfarmers in 2007, the corporation started transforming its
operations and started investing heavily in the latest technology to increase the efficiency of
their operations. The corporation has implemented information system technology to
transform its IT infrastructure and improve its functionalities (Cameron, 2014). The company
has adopted cloud computing technology into its operations to simplify the accessibility of its
data to different stores. The firm reduces its operating costs by effectively using cloud
computing for performing various business functions; it uses third-party cloud services which
reduces the management cost of servers and employees’ training expenses (Merrett, 2013).
As per Zhou et al. (2014), the corporation has invested time and resources in deploying
automated replenishment which is company’s biggest customer achievement that improves
the efficiency and availability of Coles’ supply chain. Richards et al. (2012) provided that the
firm’s IT infrastructure ensures real-time connectivity in order to improve company’s
operations and speed of decision-making procedure.
Big data is a prominent technology, and Coles use it to drive its business efficiency and
improve its customer engagement (Bowen, 2017). The big data technology use large
unstructured data to predict customers’ purchasing behaviour, and such information assists
the organisation in developing future strategies. Coles use big data technology to collect

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customer insights which improve its organisational policies (Ruehl, 2013). The corporation
has invested heavily in order to improve its reporting capabilities which allow store managers
to take appropriate business decisions. Merrett (2012) provided that the company provide
dashboards, iPad and drillable reports to its local store managers and supervisors through
which they can access various organisational data and information that improve their
decision-making procedure. The enterprise has implemented BYOD program in which
employees bring their personal devices to the workplace and use it to access data and perform
organisational functions (Crozier, 2013). The company’s IT infrastructure effectively
manages thousands of devices and ensures that they are securely connected to firm’s network.
Requirement of Information System Strategy in Coles
As per Arvidsson, Holmstrom, and Lyytinen (2014), Information System Strategy is defined
as corporate business initiatives that focus on strategizing various organisational functions.
The system concentrates on analysing and understanding the organisational data to perform
various formal and informal activities. The Information System focuses on strategically
performing business functions which aligns IT infrastructure with business strategy. Modern
corporation uses strategic information system because it allows them to increase their
operations’ efficiency and generate a competitive advantage over its competitors. Whittington
(2014) provided that effective implementation of information system strategy can assist
enterprises in transforming their existing business models and incorporates various other
policies that improve customer engagement and experience. As per Lamberti and Noci
(2010), Coles can use information system strategies to transform it’s supply chain operations
and online business functions. In recent years, most corporations use digital strategy in their
supply chain and marketing strategies.

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Schniederjans and Cao (2009) mentioned that Information system allows modern
corporations to generate competitive advantage by aligning business strategy with IT
infrastructure. Coles can implement information system strategy to measure its customers’
requirements and identify their product requirements; such information can assist the
corporation in establishing its operations in niche markets and change their business process
as per market requirements. The corporation can use digital operations to expand its domestic
and private business operations into new markets to increase its market share and number of
customers. Ahmad, Maynard, and Park (2014) stated that effective information system can
allow the corporation to find new business partners to collaborate with or establish positive
relationships with its current business partners. Effective collaborate, and strong relationship
with business partners can enable Coles to implement successful innovation process.
Innovation strategy is a crucial part of modern companies which allow them to gain
competitive advantage.
Leading organisations in the world, such as Apple, Google, and Facebook, use effective
information system strategy to promote innovative thinking which allows them to create new
business procedures and maintain a competitive advantage. According to Laudon and Laudon
(2016), it improves the decision-making process in the enterprises and allows the corporation
to fulfill their corporate social responsibilities. Information System strategy connects various
parts of multinational organisations with each other that implement innovative approach in
business decision-making procedure that assists in various practices such as motivation of
employees, imposing deadlines and providing rewards based on performance. Starbucks is
known for using information system strategy to improve its customers' engagement through
social media sites which increases its brand image and improve its profitability. Chua and
Banerjee (2013) stated that Information System strategy allows Starbucks to handle business
communication and customers quarries efficiently; the company also collect necessary

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consumer data through Information System infrastructure that assist them in developing
future business strategies. Similarly, Coles can implement information system strategy to
increase its customer engagement, operation efficiency, and effective decision-making
process.
Challenges and Recommendations for Coles’ Information System
Strategy
In recent years, a larger number of corporations have implemented information system
strategy to generate a competitive advantage over its competitors, but most of them failed due
to various reasons. One of the primary reasons for company’s failure is limitation and
exceeding of resources and time. As per Peppard and Ward (2016), modern organisation did
not strategically plan its information system strategy which increases their budget and time
required for implementing the project. Before implementing Information System strategy,
corporations should analyse and understand their organisational culture and identify
limitation that might adversely affect Information System strategy. The continuous frustration
of users by the system proves that company has failed to implement effective infrastructure.
According to Galliers and Leidner (2014), due to complexity, many users might avoid
accepting the new system, and they might constantly attack the strategy by providing that it is
unproductive or useless. System failures are one of the primary reasons which frustrate users,
and they started opposing the new infrastructure.
Many firms did not invest properly in Information System infrastructure or avoid using the
latest software application which increases difficulties in maintaining the network. Laudon
and Laudon (2011) provided that lack of investment in information system strategy increases
the complexity of operations which is difficult for employees to understand. Many old
employees did not understand the latest technology, and they oppose the implementation of it

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into operations. In order to reduce expenses, most firms did not hire enough IT specialists to
train their employees. The lack of communication channels between employees and IT
specialist also increases the problems for employees because it became difficult for them to
understand and work on the latest infrastructure. Coles should ensure that it hire enough IT
specialist to teach employees about the new infrastructure which will assist in improving their
efficiency. David (2011) stated that organisations also find it difficult to align their business
strategy with information system strategy which increases the difficulties for top-level
management. The managers find it difficult to formulate effective business strategies that
align with the information system infrastructure which assist in improving overall
organisation performance.
Coles can use various strategy policies to ensure that it’s Information System infrastructure
align with its business strategies. Lack of management and supervision adversely affects
business strategy and stops it from aligning with Information System infrastructure. As per
Watson, Boudreau, and Chen (2010), the corporation can use various strategy policies to
overcome its management obstacles and challenges. The company improves the relationship
between management and employees by establishing effective communication channels. The
management can highlight the ability of Information System infrastructure which allows
instant communication between staff and management that result in resolving various
operation challenges and tackle weak management issues. Aaker and McLoughlin (2009)
provided that poor coordination is another challenge between management and employees
which increases dissatisfaction in organisation. Most employees and supervisors avoid
responsibility sharing which increases complexity in operations. Coles can increase
participation of employees in business activities by improving coordination and
responsibilities sharing. Information System infrastructure can improve the relationship

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between IT specialist and employees which assist in increasing participation of workers in
business activities that promote a positive work environment.
Coles can improve its office infrastructure design in order to promote interaction and
communication between top-level managers and employees. It is the duty of managers to
strengthen the communication channels between them and employees by establishing
information discussions and social occasions. As per Melville (2010), social events will
promote active participation and contribution of workers in organisational activities which
establish a positive culture in the workplace. Google is known for implementing effective
employees’ interaction programs, and it allows employees to take personal time to work on
personal projects. This strategy increases the employees’ contribution to the firm which
allows the corporation to generate competitive advantage. Ahlemann (2009) provided that the
commitment of top-level manager is another challenge faced by organisation while
implementing an information system strategy. In order to address this issue, the corporation
should provide more responsibilities to the top-level management which increases their
contribution the firm. The management of Coles should be given responsibility to provide
formulate and implement information system strategy in the enterprise. The managers should
ensure that business strategy aligns with information system infrastructure which increases
their interaction with employees. It will assist the corporation in improving its efficiency of
operations and achievement of organisational objectives which will sustain its future
development.

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Conclusion
In conclusion, information system strategy allows modern organisations to gain a competitive
advantage over competitors and increase their operations’ efficiency. Effective information
system infrastructure aligns with company’s business strategies to ensure that it works
towards achieving corporate goals. ‘Coles’ has implemented various IT strategies into its
business structure to improve customers’ experience and decision-making process. The firm
uses latest technologies in its operation such as big data technology and cloud computing to
improve its efficiency and functionalities. The company can adopt various information
system strategies that will assist in providing them a competitive advantage. The corporation
can use information system strategy to increase its communication with customers and
employees which provide necessary information to top-level management that assists in the
decision-making process.
The firm can use information system strategy to expand its business by interacting with new
customers and business partners which increases its market share. There are various
challenges faced by the corporation while implementing an information system strategy such
as lack of time and resources, employees’ dissatisfaction, lack of training, lack of top-level
managers commitment and others. The company can address these challenges by providing
more responsibilities to top-level managers, hiring IT specialists for training, introducing new
communication channels between employees and management, increasing employees’
contribution and engagement and many others. Coles should effectively implement
information system strategy since it allows them to gain competitive advantage and sustain
their future growth.

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