Business Report: Strategic Information System for Wesfarmers

This business report delves into the strategic information system (SIS) employed by Wesfarmers, a leading manufacturer. It begins by outlining the concept of SIS, emphasizing its role in aligning business technology with strategic planning to achieve competitive advantages. The report then identifies and analyzes issues and challenges faced by SIS planners, such as lack of leadership and consensus, and execution problems. It critically evaluates how information systems aid organizations in gaining a competitive edge, using Michael Porter's competitive forces model to illustrate strategies like low-cost leadership, product differentiation, and market niche focus. Furthermore, the report examines Wesfarmers' approaches to developing innovative uses of information systems, including creating barriers to new entrants, generating databases for improved marketing, and locking in customers and suppliers. The analysis covers internal control strategies and concludes with a comprehensive overview of the SIS's value to the business organization, providing insights into how Wesfarmers leverages information systems for strategic advantage and sustainable market positioning.

Running Header: Strategic Information System
Strategic Information System
Authors ID:
Authors Name:

Strategic Information System
Contents
Introduction......................................................................................................................................3
Issues and challenges faced by the strategic information system planners.....................................3
Critical evaluation where IS aids an organization in attaining competitive advantage...................5
Approaches adopted by Wesfarmers for developing innovative uses of information system.........7
Managing to outsource in Wesfarmers............................................................................................8
Strategic information system adds value to the business organization..........................................10
Internal control strategy.................................................................................................................11
Conclusion.....................................................................................................................................11
References......................................................................................................................................12

Strategic Information System
Introduction
Tools and mechanisms that build a combination of a business technology and strategic planning
so as to bring advancements and developments in the business structure can be termed as the
Strategy Information System. The management system brings modifications in the organizational
structure and aids the firm in operating and executing better plans and accomplishments of the
desired goals and objectives (Cassidy, 2016). According to the surveys made it has been inferred
that the management system was introduced in early 1980’s and after the emergence of the
concepts of modernization and globalization the system gained more importance. Moreover, in
simpler terms, strategic information system can be termed as a mechanism that has been
designed from the results of the initiatives by the organization in order to attain a sustainable
position in the market and attain competitive advantage. It is a silent feature of the aspects of
information technology and plays an integral and active role in the operations of an
organizational structure. The mechanism is concerned with the number of operations which are
executed within a business entity or is also developed in order to assist the firm in creating
divisions in the various functions such as managing and maintaining inventory and transforming
data etc. The below-executed analysis is a business report which has been presented revolving
around the various aspects of the strategic information system for a manufacturing firm. The
selected case study for this business report is of Wesfarmers which is one of the leading
manufacturers in the sector of chemicals, fertilizers, coal mining and industrial and safety
products.
Issues and challenges faced by the strategic information system planners
Strategic planning can be termed as the process or an outline or roadmap, which can be used by
the stakeholders throughout the firm so as to move the business organization towards heights of
attainments. The process is a slandered endeavor, despite the criticisms that it consumes time and
money and is also little in action (Cecez-Kecmanovic et al., 2014). The below mentioned are
some of the reasons for the failure or can be considered as the issues that can be faced by the
strategic planners:

Strategic Information System
Lack of leadership: One of the biggest reason behind the failure of this system is that the lack of
support of the leaders or the senior authorities. The leaders are required to be supportive in all
terms so as to develop a smooth flow of operations. The leaders play a crucial role in the
strategic planning. They are required to be present and engaged at the right time with right
people and apart from that, the other significant factor is their ongoing leadership responsibility.
They are also known as strategic thinkers which prove beneficial in the process of strategic
planning. Vision, mission, and values provide guidance to strategic thinking (Galliers and
Leidner, 2014). Strategic thinking and consequent alignment of the actions and that too with a
clear vision of future can be considered as an antidote for a set of predictable environmental
changes that undermine the details of strategic plans. Ultimately, strategic thinking is concerned
about the course over time in-spite of the diversions caused by unexpected circumstances.
Lack of consensus: The strategic planning process is a vital aspect of the planning process and if
the business corporation is serious about the implementation of the plan, then an excellent
product is imperious. The process of strategic planning is concerned about consensus building. If
the process is executed correctly by the strategic planners of Wesfarmers then it will aid in
promoting the communication, collaboration and enhances participation within the organization.
It also assists the entity in disclosing conflicts, dealing and tackling with the inevitable struggle
made with the political authorities (Greenblat 2015). Whereas a true consensus has been
observed to be concerned about the issues with the stakeholders that are unrealistic, involving
everyone through interviews, focus groups, research, open forums, and the like is considered as
significant if the seniors expect them to implement the plan. And such an involvement of the
individual is time-consuming. Moreover, the individuals can also lose interest or become delayed
in details and also feel unheard. Yet the results of this consensus building process reflect the
antithesis of the plan designed by the committee or the administrator of the entity.
Issues with execution: The greatest issues which can be faced by the strategic planners of
Wesfarmers is the execution process, that is putting the plan in right place. Most of the times the
efforts and attention are made focused on the development process of and after the planning
process the team thinks that their work is through. But in reality, the core operations are initiated
after the implementation of the plan (Kavanagh and Johnson, 2017). Actual attainment of the

Strategic Information System
goals strategies, objectives in the plan is the point of the entire process and this is well known by
the effective strategic planners.
Critical evaluation where IS aids an organization in attaining competitive advantage
Attaining competitive advantage has been considered as one of the crucial tasks for any of the
business corporation. And there is number of approaches and mechanisms which can be adopted
by the manufacturing firms and that will be proven beneficial for sustaining and attaining
competitive advantage (Morecroft, 2015). Earning the position of competitive advantage in the
business environment is one of the integral factors for any of the business firm that aids the
enterprise in sustaining the business in the market. The below presented is the critical evaluation
of how the information system will be proven beneficial in attaining the competitive advantage:
Attaining competitive advantage means the business entity is having access to some resources
that others are not having and are also able to use those resources more effectively. This will
enable the business entity is generating higher rate of revenues, growth profitability and an
increase in efficiency will be observed. Long run results will also be experienced the hike in
stock market valuations as compared to the competitors (Morecroft, 2015). One of the most
effective approaches is Michael Porter’s competitive forces model that can be adopted by the
business firm for describing the competitive forces that shape the fate of the enterprise. The
following are the main components of the model:
 Traditional competitors: The existing business entities that are already sharing the
market space.
 New market entrants: The start-ups or the new entities have the diverse range of
advantages such as no limits or making use of old equipment’s, high motivation level.
There are some disadvantages such as such as less expertise and little brand
acknowledgment (Pearlson, Saunders and Galletta, 2016). Moreover, there are some
entities that have lower barriers while entering the market that is, the manufacturing firms
will have to pay fewer expenses while entering the market.
 Substitute for the products and services: The substitutes are the alternative options that
can be chosen by the consumers over the brand if there is an increase in the price. For

Strategic Information System
instance, the rise in the price of the electricity made the consumers to switch over the bio-
gas and solar energy as a substitute.
 Customers: It has been observed that there will be a rise in the power of the consumer if
there is an ease in switching to the competing brand or also if they can influence the
business or its competing brand for competing on the price alone in a transparent
marketplace where there is a little product differentiation and all the prices are known
instantly (Peppard and Ward, 2016).
 Suppliers: A varied range of suppliers with a firm will enable the entity to have a greater
control in relation to the prices, quality and distribution schedules.
Porter’s competitive forces model
A determination to the strategic position of the entity and also its strategies is done. This
determination is done not only by competing from its traditional competitors but also by forces
that are the new entrants, substitute products, customers and suppliers in the business
environment (Peppard & Ward, 2016). The below presented are the four generic strategies which
can be adopted by the manufacturing firms for managing competitive forces and each of which
often is enabled by using information system and technology:
Low-cost leadership: Under this approach, the manufacturing firms will quote the products and
services at a low price in order to establish the brand name and equity in the market. According
to this, the business entity can make use of information system for developing and achieving
lowest operational costs and lowest prices (Rainer et al., 2013). For instance, a supply chain
management system can be incorporated for bringing an efficiency in the customer response
system for directly linking the consumer behavior to distribution, production and supply chain
aids in a decline in inventory and distribution cost.
Product differentiation: Under this strategy, the business entity develops a distinct image of the
brand name or the product for promotion in the market. As per the given scenario, the
information system can be used for enabling the new products and services or can also bring a
change to the customer convenience in consuming the existing products and services. For
instance, Wesfarmers can make use of mass communication for offering tailored products by

Strategic Information System
making use of same resources as mass production and providing the customers as per the
different specifications.
Focus on market niche: The business entity can make use of this management system to enable
a specific market focus and also serving this narrow target market better than competitors. This
system offers a wide support to the strategy by producing and analyzing the information for
developing finely adjusted sales and marketing techniques (Realitysoftware 2017). For instance,
Wesfarmers can make use of customer information system with detailed data for the customers
who are actively visiting the stores for serving them tailored services and also reward the
profitable customers with better and improved quality of services.
All of the above mentioned are the strategies which are the examples of an information system.
All the mentioned strategies are aiding the business firm in attaining the sustainable advantage.
Approaches adopted by Wesfarmers for developing innovative uses of information system
The below presented are some of the approaches which can be adopted by the business
organization for developing innovative uses of the strategic information system:
Developing barriers to the new competing bands: According to this approach, Wesfarmers can
make use of strategic information system for serving the products and services that are difficult
to replicate or are also used in the highly specialized markets (Sarker, Xiao, and Beaulieu, 2013).
And this approach will be proven as an innovative concept and will also be proven beneficial for
the business corporation. By making use of this approach the firm will be preventing the entry of
the competing brands as they will find the expenses for making the implementation of the similar
strategy very high.
Generating database to improve marketing: The information system adopted by Wesfarmers
will be aiding the business in attaining the position of the edge over their competing brands by
the generation of data or information and that will bring enhancement in the sales, productivity
and marketing strategies (Altamony et al., 2016). The existing data is treated as a resource by the
systems. For instance, the business corporation may utilize the database for monitoring the
purchases made by the customers and also for identifying the various segments of the market.

Strategic Information System
Locking in customers and suppliers: This approach has been considered as another significant
method by which strategic information system will be innovatively proven beneficial for the
business entity (Aslan, Stevenson and Hendry, 2015). According to this concept, the consumers
and the suppliers are offered such benefits that will stimulate them so strongly and it will be
proven difficult for them to switch over the competitor’s brand. For instance, Wesfarmers may
develop any such information system which will provide the number of benefits to the customer.
Such as reliable order filling, minimization in the transactional expenses, increase in the
management support and faster delivery services.
Minimization of the costs of the products: Strategic information system will aid the business
firm in bringing the decline in various operational and transactional costs. The decline in
transactions will stimulate the prices of the products and the same will be decreased in
comparison to their competitors (Cao, Nicolaou and Bhattacharya, 2013). And here the
information system will be playing an integral role through which the survival and growth of the
business entity in the competitive environment will be ensured. For instance, the business firm
can lower down the prices of various products by offering discounts on bulk purchase and that
will bring an increase in the sales.
Leveraging technology in the vale chain: According to this approach, the business organization
will be pinpointing specific business practices in the business where the competitive strategies
will be best installed and also where the information system will be having the greater strategic
influence (Chofreh et al., 2014). By making use of this approach it has been identified that
information system can be utilized to its best extent for attaining the competitive advantage by
making identification of specific, critical leverage points.
Managing to outsource in Wesfarmers
The below mentioned are some of the core functional areas which are required to be focused by
the directors of information system so as to manage the outsourcing within the business
corporation:
 Cost management: Cost has been considered as one of the biggest reason that has been
observed for choosing to outsource as a strategic option. It has been noted that the
outsourcing enables both the client and the service provider an equal opportunity of

Strategic Information System
earning the considerable amount of profit (Paginas 2018). And therefore it has been
considered significant for both the parties analyze the scope and expenses of the
outsource projects and operations before they are signed the agreement.
 Communication management: Developing a right and appropriate communication
channel ha been considered as an absolute necessity for the success and growth of any of
the business purpose (Costa et al., 2016). The process of communication should be
offered due significance right from the initial step that is the negotiation stage, with
importance being placed on a guaranteed communication system, regular contact between
the client and the service provider, regular feedbacks should also be regularly given by
the clients and recognized by the service provider.
 Performance management: Performance management in the concept of outsourcing
comprise of both project quality and adherence to the time or the deadlines provided in
the contract. A regular check or monitoring should be executed by the client so as to
establish the quality of work should vary and an increase should be observed as compared
to the previously established parameters (Eden, Sedera, and Tan, 2014). Monitoring of
the adherence to the deadlines should be done by the client and accountability reports
should also be demanded non-compliance of the same.
 Risk management: Risk management has been considered as a significant factor as any
other aspect of the business relationship. Analyzing both sides of the outsourcing process
and also studying the various risks involved in the operations and also developing a back-
up plan before signing the agreement. And this will bring the risk factor to the minimum
level.
 Knowledge transfer management: There should be a complete transfer of data and
required information with a correct level of transparency in all the areas that are related to
the project. This will aid the business entity in bringing improvements in a production
process, improved timelines, and also there will be an increase in the overall quality of
the outsourced project or operation (Ha and Ahn, 2014). One of the most significant steps
in the process of successful knowledge transfer management is close monitoring at
regular intervals.
 Relationship management: Establishment of the strong relationship between the client
and the outsourcing service provider should be developed and this has been considered

Strategic Information System
as a significant element for the success and growth of the project (Hunton, McEwen and
Wier, 2015). A relationship can be effectively maintained and managed by
communicating regularly and continuous and appropriate transparency and also by
displaying right proportion of flexibility.
Strategic information system adds value to the business organization
One of the biggest tries of each and every business organization s that they strive to be the
market leader in their given industry and there is some factor that is held liable in hindering the
goals and achievements (Kermani and Rouhani, 2014). And in order to tackle these situations,
the business can make adoption of some strategies that will lead the business corporation to
competitive advantage. The information system is one such strategy that can be implemented
within Wesfarmers. The below mentioned are the fundamentals or the roles through which it will
be identified that the information system positively works by adding value to the business:
Information storage analysis: In the initial stages the business corporations do not manage their
information and data manually in the registers and hard copies. By making use of the strategic
information system Wesfarmers can utilize the sophisticated and comprehensive databases that
can contain confidential data about the company. These information systems analyze, store and
update the data that can be utilized by the business corporation for solving the problems or
conflict situations faced if any (Kurbel, 2016). Also, integration of data is made possible by
making use of these systems from various sources that are inside and outside of the company.
This will also keep the entity updated in terms of internal performance and external opportunities
and threats. And by analyzing all these statements it can be observed that the information system
adds value to the business.
Assistance in decision making: The long run success and growth of the business firm is made
relied on the adequacy of its strategic plans. The managerial staff or the management team makes
the utilization of the information systems for formulating the strategic plans and thus making the
decisions for the firm’s success and development. Moreover, the business firm can also make use
of the information system for evaluating the information from all the sources. This includes data
from various sources such as external references, for instance, Reuters or Bloomberg that will
enable the information about the general economy.

Strategic Information System
Internal control strategy
The process or the procedure of the internal control can be termed as the practice within the
business corporation so as to ensure that organization makes the fulfillments and attains the
target s set in the strategies (Pohjola 2018). Moreover, the process is also concerned about
identifying the use done by the entity of the available resources, economically and the data in
support of the management decisions is reliable. There are some other aspects that are ensured by
the internal control system, such as risk management, custody of the client’s assets and
safeguarding the property in an adequate manner. And hence it has been proven that the internal
control system is required as an essential system for any of the business entity. The below
mentioned are components of the good internal control system:
The managerial staff should have the high level of integrity and ethical values and also they
should be committed to assiduously performing prime internal procedures.
The governance committee should have more hands-on oversight involvement in the business
practices. Moreover, some of the board members can perform monthly entity level controls such
as inspecting and approving supporting documentation for checks written (Laudon and Laudon,
2013).
Some of the major control procedures can be performed by the management staff and authorities
for overcoming the lack of segregation of duties. Suggestions for reviewing the accounting
systems reports and inspections and scrutinizing of the documents for selected transactions and
other overseeing periodic counts is done by COSO..
Conclusion
After summing the above-executed analysis it has been executed that the business corporation
can make use of various systems and mechanisms for bringing improvements in the operations
and functionalities and that will lead the business corporation towards success and growth. The
selected sector for given scenario is manufacturing and chosen organization is Wesfarmers and
the above business report is made focused on the use of the strategic information system. The
report has been discussing the issues faced by the strategic planners. The further report is made
concentrating on the critical evaluation of the effectiveness of the IS strategy for the attainment
of the competitive advantage. Moreover, the business report also comprises of the approaches

Strategic Information System
which have been adopted by the business corporation for developing the innovative use of
strategic IS.