Analyzing Digital Transformation's Impact on Competitive Strength

This report examines the strategic management of information systems and the impact of digital transformation on a business's competitive strength. It analyzes various digital technologies, including internet marketing, cloud computing, ERP systems, and business process reengineering. The report highlights how these technologies can be used to improve core business functions, manage data effectively, and gain a competitive edge. The study focuses on Barker and Stonehouse, a UK furniture retailer, and discusses the challenges they face in adopting digital technologies. It also explores solutions using Kotter's 8-Step Change Model and emphasizes the importance of digital advancements for innovation, customer satisfaction, and market expansion. Furthermore, it covers the benefits of cloud computing for data storage and security. The report concludes with recommendations for businesses to successfully integrate digital strategies and achieve sustainable growth.

Strategic management of information systems
(To analyse the impact of Digital Transformation on
competitive strength)

Executive summary
In competitive world, none of the entity can successfully survive in the marketing without
bringing innovation and digitalized advancement in their operations. It has totally changed the
way in which business operates and run their functions. The current research aims at
investigating the impact of digital transformation and examines that how it contributes towards
competitive strength of the firm. The research focused key consideration on the major
technologies including ERP, Business Process Reengineering, IS/IT system, Internet marketing,
Total Quality Management and internet marketing. With the use of such advanced technologies,
Baker and Stonehouse will be able to manage their core functioning and SDLC can be used to
design new systems. All the systems serve as tools, which enable firm to retrieve customized
reports and helps in informed business decisions. Technological advancement helps in building a
unique position in comparison to the other firms and achieve sustainable growth.

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
Critical analysis of different types of digital technologies.....................................................1
Internet marketing..................................................................................................................2
Cloud-Computing...................................................................................................................4
ERP System and Change management...................................................................................4
BRP system............................................................................................................................5
IT and SDLC..........................................................................................................................6
Funding method......................................................................................................................7
Corporate budget....................................................................................................................8
TCO........................................................................................................................................9
Total Quality Management...................................................................................................11
Kotter’s 8-Step Change Model for Leading Change............................................................11
CONCLUSION..............................................................................................................................13
RECOMMENDATIONS...............................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
The strategic management information system is type of information systems that are
developed to respond to corporate business initiative. To the organization, they are intended to
provide competitive advantage. At a lower cost, they may deliver a product or services that are
different from other company's product. On a particular segment of market or on innovation
strategic information system mainly focuses. Today more and more companies are making use of
information system in order to expand their business on a broader platform. The use of digital
technology such as laptops, social media sites will help company to develop innovative products
and also to gain more customer-satisfaction.
Barker and Stonehouse is a medium-size furniture retailer in UK (Barker and Stonehouse,
2017). The wide range of high-quality furniture is been provided by this company such as sofas,
office furniture’s, dining tables etc. In order to gain competitive advantage and also to make
innovative products the company has decided to make use of digital technology in the business.
This report will conduct research on the topic strategic management of information system. This
report will examine the impact of digital technology on the business. In this report the issues that
is been faced by the company in context of digital technology will be presented. The appropriate
solution to the problem in terms of kotters eight step plans will be represented in this report.
Critical analysis of different types of digital technologies
In today’s world, digitalized technologies and all its facets gains crucial importance for
the businesses to make better and informed business decisions (Intelligence, 2014). Most
successful organization depends on technology for all the aspects of their businesses. In order to
response to corporate initiative of business strategic information system are been developed. In
the world of information technology, strategic information management is a salient feature. The
businesses and organization are provided help by strategic information management in order to
store, transfer and process information that they create and receive. The strategies of business are
been implemented by strategic information system (Miller and Loorbach, 2014). These are
mainly computer systems. To the strategic opportunities of business the information services
resources are been applied. The products and business operation of the organization are been
affected by the computer system. The information system is the support activities for the
business. The operations are been mechanized for between efficiently, control and effectiveness
(Tao and Li, 2014). On the other hand, strategic information system are essential part of the
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bushiness and the growth and profitability of the company is been affected by them. The new
businesses and the new markets are been opened by information systems. The competitive stance
of the business is affected directly thus giving competitive advantage against rival company or
competitors.
Internet marketing
The positive impact on the business can be made by making use of digital technology
such as Internet marketing, mobile phones, computers, laptops etc. By using all this technology
all the needs of the customers can be discovered and based on it, develop its products. Today
more and more companies are making use of digital technology in the business in which they are
operating. In order to reduce cost of business the businesses can make use of digital technology.
The back office function such as record keeping, accounting and payrolls are being automated
due to use of business technology. In order to develop a secure environment to maintain private
information of customers or business owners of business make use these technologies (Tabassum
and Mathew, 2014). The process of communication can also be enhanced by making use of
business technology such as e-mails, websites and personal digital products. With consumers of
customers, they will help to make combination effective. By making use of electronic
communication, companies may also receive more feedback from customers. In a real-time
format, these methods will allow companies to reach to the customers by making use of mobile
devices. Through the use of technology, business can increase the productivity of employees. In
business, function owners of business can also implement digital technology in order to decrease
the amount of human labour (Kivunja, 2014). Using technology the business can also select to
expand its operations. The new economic market can be reached out by companies due to use of
technology in a business. The business can grow its market by selling is product to a regional,
national market. In order to reach out nee market internet advertising can be used by companies.
Barker and Stone is well-known furniture retailer in UK. This company provide furniture
such as sofas, beds, dining tables etc in UK. But in this company the digital technology is not
been used in order to expand or grow their business. Due to these issues are been faced by this
intercompany this company the records of customers or employees are stored manually rather
than making use of computerized system (Fernando, Loke and Rahayu, 2013). All the details of
customers or employees are maintained in a register rather than in a business storing it in
computer. Due to this a lot of time is been taken to find out each record of customers or
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employees and also updation in such records is also not so easy. As each record, need to be
found and then updation can be done. Also in case of any fire or theft there are high chances, the
records can be damaged and also there is no such backup that is available.
In order to grow or expand their business this company is also not making use of internet
marketing. Due to this the sales of the company is decreasing. In today's world Internet
marketing plays an essential role as it aligns the way in which the purchasing decisions is been
made by consumers. Through use of internet marketing the company can build relations with
customers, The company is also facing issues regarding communication. As it is not using
technology such as video-conferencing, mobiles etc in order to communicate with pole that are
residing in other countries or places. Due to this the company is not been able to grow its
business on a larger platform.
To conduct its marketing or to develop the products of furniture this company is also not
making use of online social media such as Facebook, Twitter, blogs etc. Due to this they are not
able to find out the likes and dislike of the customers. They are not aware about expectation of
customers in context of the products there company is manufacturing. So, due to this the less
customer-satisfaction is there. Also the marketing that or promotion that is been done by
company in order to sell out its product to the target market is very little. They are not making
use of online advertisements or websites of the company in order to make customers aware about
the products that is been provided by this company (Polášek, Bureš and Šimon, 2015).
In this company the digital technology such as social media sites etc are not used by
Barker and Stonehouse due to this the innovative products are not been developed by the
company and also the sales are also reducing. The company is also not providing an option of
selling its product online to the customers. The tradition methods are been followed in the
company in which the customers has to vista the stores in order to purchase furniture products. In
comparison, with rival companies they are providing online shopping option to customers. The
customers are preferring to purchase the products from other company as it gives and easy
purchasing option where they can buy the sofas, beds etc sitting from home. Rather than visiting
the store. So , all these issues such as communication, manually storing records, not making use
of internet marketing and social media sites to do promotion of the products are been faced by
the company. The innovation is lacking due to not making use of digital technology in the
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business. The innovation in a business can be done by making use of digital technology such as
internet marketing, websites, blogs etc.
Cloud-Computing
Today more and more companies are making use of digital technology in order to reach
out to the target customers and expand their business both globally and locally. In order to
maintain the records system of the employees and the customers the company can make use of
cloud computing rather manually marinating it. The advantages of storing the records on cloud
are many. Barker and Stonehouse can save a lot of time in string the records in the cloud. All the
records of the company that is related to customers or employees can be stores on the cloud. The
company need not to take any stress of the updating as automatic updating is there in cloud-
storage. The employees can access the data or information any time and form any place. The
only requirement of cloud -storage is Internet access. The flexibility is given to the employees by
storing the data on the cloud as by sitting at home also they can see the records. Also in case of
any fore or theft there will be no issues as the data is stored on cloud. Also it is an energy -
efficient ways as all the information about the company will be stored on one cloud .The issues
regarding backup will also be solved as the records are there on the cloud. By storing data on
cloud, the owners of business can also gain competitive advantage. By making use of cloud-
storage, the cost of external hard drivers or backup tapes can be eliminated. The company can
also store the sensitive information on cloud, as the unauthorized users are not able to access
files only the authorized users are given the right to access the files on the cloud. In a way a lot
of time and cost of the company will be saved by string its records on cloud and also the security
that is been given by cloud is also excellent. The flexibility is given to employees to work from
home and enhance there will be more satisfaction among employees and they will be staying
connected to business.
ERP System and Change management
Enterprise Resource Planning (ERP) is a business automaton software which integrate
multiple of activities into one application and helps all the departments in information sharing,
communication, retrieving reports, data analysis and stronger decisions. In today’s complex time,
ERP is of great use for the companies to manage their core business functions and activities. The
system integrates all the organizational processes and functions of the enterprise such as finance,
human resources, goods manufacturing, human resources and other key activities. In the opinion
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of Leon (2014), shared database is the major benefit of the ERP system that facilitate companies
performing multiple functions run by different divisions. It will enable Barker and Stonehouse to
streamline key operations including, sales, finance, HR, procurement, manufacturing, service
delivery, inventory management, supply & distribution management and others.
Likewise, Pai and Rane (2014), reported that ERP is beneficial for the companies in
maximizing their production, cost minimizing and save time. Contrary to the convention method,
modern ERPs assist companies in customer resource management, human resource management,
financial accounting preparation and supply chain management. It allow all the department of
Baker and Stonehouse to manage synchronised reporting rather than maintaining separate
records, spreadsheet and databases. It save costs and time because manually data keeping
activities takes lengthy time and employ number of workers. Thus, sound implementation of
ERP helps in automated reporting and customization with strong security.
On the critical note, Bansal (2013), argued that although, no-doubt, ERP is of great value,
still, its practical implication is too complex. The biggest challenge is firm incur prohibitively a
high up-front cost to implement ERP system in their business. Being a medium sized enterprise,
it not will be easy for Barker and Stonehouse to generate huge fund to place such system. Its
sound implementation also is a time-consuming process to purchase software, change existing
infrastructure, staff training and others.
However, on the other side, considering changing social preferences and expectations,
ERP can be used for change management. Evidencing the findings of Leon (2014), demonstrates
that Barker and Stonehouse can use cloud ERP for remarkable consumer service management by
setting off-site call centres, create satisfaction matrix, devise user-centred policies and exceed
their expectations higher. it find out changing user preferences and make rationale plans and
decisions accordingly for the managing changes.
An adverse opinion was given by, Intelligence (2014), stating that sharing information
across different departments may have an adverse impact on the functions. Moreover, it requires
migrating existing dataset to the ERP software, which is quite difficult and consume excessive
money, time and resources.
BRP system
Cleansheet design and system design are the two different approaches of system design.
Former is the process of developing a new system using only key necessities or requirements.
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Intelligence (2014), said that clean sheet design is extremely helpful as it offer flexibility as well
as creative space for the innovation. However, the method discourages arbitrary constraints
which may leads to compromise and premature commitment resultant inherently non-
optimizable system.
Contrasting this, Sallis, (2014), reflected that system design is considerably important
during conceptual & preliminary design phases. It includes selection and integration of various
sub-sets and allows synergies between all of them. It requires a multi-disciplinary team that is
expertise in the technological advancement and system-designing field. In this, component
designing offer opportunity to reduce energy consumption. System optimizing is another
approach which is mainly helpful during system designing stage that compares modification in
subsystem against changes placed in service provision and functionality of the system.
IT and SDLC
(Source: GUPTA and LAXMI, 2015)
In competitive world, many-times, firm need to develop and design newer software as per
their need. In the opinion of GUPTA and LAXMI (2015), SDLC (System development Life
Cycle) is one of the great tool and widely applied method in order to design contemporary
information system. It includes planning & selection, analysis, system design and
implementation as major activities or phases. Barker and Stonehouse can build their own web
store using SDLC cycle. Tabassum and Mathew, (2014), reflected that the ability to successfully
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obtain, organize and interpret criticial business data is the key of business success. SDLC is the
methodology which will enable firm to reap the benefits of information utilization to maximize
its capacity. It is the central of efficient information system and helps in designing high-quality
software. In this, system integration allow firm to integrate various components such as hardware
and software to work together with visual programming features and promote innovation and
creativity for digitalized transformation.
\
(Source: Ambler, 2016)
However, on the critical side, Sanaei and Buyya (2014), the key success of the SDLC
approach depends upon the talent and technical capabilities of people. It is because, system
design with innovative features require profound digitalized skills and knowledge, thus, lack of
these will not assist firm in designing high-quality software.
Funding method
Barker and StoneHouse is generating a total revenue GBP54.3m of and pre-tax
profitability of GBP3.2m and gross margin of 46.9%. It operates in highly competitive industry
which can strengthen its competitive position bringing innovation and digitalized advancement.
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In order to invest in digitalized technology, firm has various choices to gather money that are
access fund through bank borrowings, investing available retained earnings and issuing more
shares in the market. However, every method has different implications, like borrowing provide
tax shields by deducting interest charges to know pre-tax profit, however, bring fixed burden
because instalments are paid periodically as per the loan schedule. Unlike this, share issue helps
in accessing huge capital but dilute ownership or stake rights to shareholders as a result;
flexibility or control over business decisions is minimized. On the other side, ploughing back the
retained earnings is helpful as it does not bring any fixed financial burden, but, all the profits
cannot be reinvested because securing some profit proportion is necessary so as to meet sudden
financial turbulence due to volatile market. Thus, it is better to use a combination of equity and
debt sources and create a right mix of both to meet financial requirements.
Corporate budget
Budgetary targets:
Sales growth : 25%
Gross profit : 18%
Pre-tax profit : 12%
The use of advanced technology is expected to drive growth in sales by 25% through the
use of new software and advanced data analytics software and systems. Internet marketing will
be a major contributor towards sales maximization through appealing consumers on
technological platform. Considering the market changes, inflation and other factors, it is
expected that net increase in gross profit will be approximately 18% from the current level.
However, as investment in Information System, Information Technology and ERP incur cost,
therefore, it is expected that pre-tax return of the company will be increase by 12% or above.
Thus, increasing the profitability will enable firm in achieving its target successfully and boost
competitive position to a major extent.
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TCO
(Source: The Evolving role of Information System and Technology in Organizations, 2017)
The evolution of advanced information systems (IS) and information technology (IT)
comprises three major eras including data processing (DP), management information system
(MIS) and strategic information system (SIS). DP is a system that helps automating the flow of
information and business processes which helps improving operational efficiency to a great
extent. MIS, on the other hand, is helpful for the policymakers and decision-makers to use IS to
acquire necessary reports and analyze it for the sound business decisions. Lastly, SIS helps
maximizing competiveness of the firm by altering business nature through IS/IT investment. DP
and MIS are the major contributors towards achieving SIS objective.
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(Source: Sallis, 2014)
(Source: Sallis, 2014)
In current times, Barker and Stonehouse need sophisticated data analytics software which
enable business to collect, examine and present comprehensive information. The coming of “big
data” shifted MIS focus towards discovering new knowledge or insight. DSS (Decision support
system) is one of the advanced tools that examine unseen pattern, relationship and future insight
and helps top-level managers devising correct plans. With the context to the case, Barker and
Stonehouse can use it, in which, MIS provide comprehensive details, DP provide accurate and
realistic data and SIS link both of them to the customers through devices like mobile, internet
and others and helps in efficient processing. Such technology-based system helps in effective
integration, delivering new products and developing new value preposition. Technology enables
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establishments connecting with the consumers helps in knowing their desires, delivers services
accordingly, and strengthens competitive position.
Total Quality Management
Quality is an important facet of business success, because without delivering high-quality
furniture items to the consumers, Barker and storehouse will not be able to retain in competitive
market. Here, quality must be considered in the consumer point of view rather that business
point. Total Quality Management (TQM) is the great technique of delivering quality items to the
firm focusing consumer satisfaction (Dale, 2015). It includes various initiatives such as
employee training, upgrading software and computer, integrating quality into design, process
improvement and others. According to LUCA (2014), Business Process Reengineering (BPR)
can be use for radical designing that maximize effectiveness and efficiency using clean sheet.
Moreover, Business Process Improvement (BPI) is another technique that focuses on the
incremental improvement in the business functions focuses on root causes and strives for
quantitative outcome (Esbenshade and et.al, 2016). Barker and Stonehouse can use these
techniques to pursuit business excellence. BPR can be used by the entity as long-term
organizational change strategy incorporating both incremental improvements as well as radical
innovation in order to manage changes. It really helps towards bringing innovation to maximize
competitive strengthens of the entity (Jiméne and et.al, 2015).
Kotter’s 8-Step Change Model for Leading Change
This model can be used by the company in order to overcome the issues that is been faced.
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(Source: Kotter's 8 Step Process, 2017)
A sense of urgency is been established- There are an opportunity for this company to expand its
business on a broader platform by targeting new customers. They can make use of digital
technology such as social media sites, cell phones, laptops, e-mails, instant -message, internet
marketing, online advertising etc in a business in order to gain competitive advantage and also to
develop innovative products (Dodgson and George, 2015).
A powerful coalition is been formed- In order to bring this change in the company the strategies
will be made to bring a change. The employees and staff will be given training in order to make
use of more and more digital technology as both time and cost can be saved by using them in a
business.
The vision is being created – The online stores, company websites, page on Facebook, twitter,
implementation of cloud-computing to store records etc will be done in order to achieve the
target of business.
Communication the vision -Through meetings, presentation etc the new vision that is made by
the company to over come the issues by making use of digital technology in a business will be
communicated to the staff that is working.
Empowering others to act – All the risks will be encouraged in order to bring a change. All the
barriers that will be coming in between of implementing Internet banking such as marketing
complexity, face-to face contact is limited etc will be removed.
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Illustration 1: Kotter's 8 Step Process.

Plan for short term wins – The employees who are working to bring a change in the business
need to be rewarded by giving them bonus or by appreciating for their hard work. This will
increase the employees turnover and also productivity will increase (Dinh and Wang, 2013.).
They will feel motivated and encouraged as their hard work is been appreciated by the company.
Both intrinsic and extrinsic rewards can be given to employees for their good work.
Consolidating improvements and producing more change – The appropriate polices that fit in
to bring a change in the business will be sued such as security related to digital technology etc
will be used. In order to implement this change the people will be hired and appointed who have
little experience in Internet marketing and also about how to use e-mails and who can develop
more innovative and creative websites of the company.
Instituting new approaches – In this company the new approaches such as cloud-computing for
storing data , use of internet marketing, ERP, Business process reengineering etc can be used to
bring a change in the operation of business (Arbace and Scopigno, 2013).
CONCLUSION
Thus summing up the above report it can be concluded that positive impact on the
business can be created due to use of digital technology by the company. The company will able
to develop innovative products and also will gain competitive advantage. The various issues such
as in storing records, decrease in sales and fewer customers- satisfaction is been faced by the
company. But by making of internet marketing the purchasing decision of customers can be
discovered and also by using social medial sites and online advertisement the promotion of the
products can be done. The Kotters model will help in order to bring a change in the company.
RECOMMENDATIONS
As per the findings, it become clear that there are number of opportunities available to the
Baker and Stonehouse to expand their technology base so as to stay competitively strong in the
uncertain market. In this regards, company is particularly suggested to use TQM as a tool for
quality management through business process reengineering. However, in order to strengthen its
decision-making system, it needs to integrate data processing, MIS and SIS for the digital
transformation. SDLC can be used by the establishment to design new function and systems and
enable firm to maximize its competitive position to a great extent. Besides this, Internet
marketing can be used as a marketing strategy by the firm to promote their goods and services on
online platform and thereby attract more people all around the world.
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Online
Barker and Stonehouse. 2017. [Online] Available through:
<https://www.barkerandstonehouse.co.uk/>
Kotter's 8 Step Process. 2017. [Online] Available through:
<http://sites.psu.edu/global/2016/12/04/organizational-change/>
The Evolving role of Information System and Technology in Organizations, 2017. [PDF].
Available through: < https://www.esmt.org/sites/default/files/peppard-c01.pdf>.
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