Information System Planning For Sustainability

Published Date: 02 Nov 2017

In recent years, there has been a shift from using Information Systems (IS) to achieve operational activities to strategic use for competitive advantage. The word strategic is used because IS is used for more than just the internal operations to achieve competitive advantage. Organisations do not use IS for just administrative purposes but also for customer service and accounting activities among others (Skinner, 2003). Information Systems provides room for flexibility and gives the ability to respond dynamically to changing competitive environments. Using IS to gain wider and larger improvements aids competitive advantage within the environment the organisation operates (Roberts and Wood, 2002). IS enables strategic planning and enhances an organisation’s market share. However, organisations can evaluate the effectiveness of their IS in terms of values (tangible and intangible), profit generated and how sustainable the information systems are. This paper analyses the importance of IS in organisations, using TESCO as a case study and states ways in which organisations can incorporate sustainability agenda into their information related strategy.

SECTION ONE: Critically Evaluate the Importance of Information Systems in Organisations.

Information Systems

Information System (IS) can be defined in terms of two perspectives: its functions and structure. Functionally, it is technologically implemented for the purpose of storing, recording and distributing information, making it available at all times and easily accessible to authorised persons. To get the best of information systems, an organisation states its objectives, functions and determines its processes. The processes are examined for their needs and data classes are identified. By incorporating similar data classes, software and databases are then developed to suit the processes identified. Structurally, information system is made up of models, data, people and technology all put together to serve organisational purposes or functions (Xu, 2000; Lederer and Sethi, 1988). Information systems are not limited to just the technical aspects such as computers and software, but also includes the people, information and processes of the organisation. Organisations have to be swift in adopting new technologies in order to be competitive in a continuously developing business environment. This is where IS comes in (Nickerson, 2000).

It is one thing to have IS and another to implement it strategically to get the best out of it. Strategic IS implementation entails recognizing organisational opportunities and problems, recognising the resources needed to enable IS to be applied successfully to these opportunities and problems and creating plans and procedures to allow IS to be applied successfully (Hann and Weber, 1996). Also deciding the objectives for organisational computing and identifying potential applications or software which the organisation can use should be considered in order to implement IS effectively. It is necessary organisations identify the relevant scope of IS and define key activities that require IS (Skinner, 2003). For instance, an organisation is made up of departments handling sales and marketing, customer relations, accounting and finance, manufacturing and production operations. In order to be effective they make use of information systems.

An organisation and its Environment

The environment an organisation functions in can positively or negatively affect its business success rate. The environmental factors are of two types: internal and external. Internal factors are situations or events that occur within the organisation and can be controlled. Such factors could be employee morale, top management commitment, organisation culture and availability of resources (Skinner, 2003)

External factors are those that occur outside the organisation and are beyond their control. External factors include social, legal, customers, suppliers, economic, political and technological factors (Montalvo, 2012). Irrespective of how efficient an organisation’s information systems are, if adequate plans are not made to protect the organisation from such factors they may fail. Be it internal or external factors, the organisation must be aware of these factors to implement strategies that are flexible and willing to change so as to respond to them in an appropriate way while still being ahead of competitors.

Importance of Information Systems

The importance of IS have different meanings to different organisations. As stated earlier, organisations have various department, decisions critical to their well-being relies on the flow of information from one level of management to the other. This information needs to be processed and accessed at the right time and in an orderly manner. The use of information systems designed specifically to suit the organisation’s processes can help achieve this goal (Pant and Ravichandran, 2001). Skinner (2003) stated that information systems are created to achieve certain purpose. They are expensive and complex, and the value derived from it is solely dependent on how it is used across various organisational context. Values can be considered in terms of being tangible and intangible.

Tangible values directly support production, delivery of goods, services and revenue. (Allee, 2011) described tangible value as being contractual or mandated. That is, part of the goods or services paid for and normally expected. Tangibles include contracts, receipt of orders, business transactions required to execute core organisational services. For example, stationaries, computer equipment and office furniture.

Intangible values are values not directly paid for or contractual, but are still crucial to support business processes and transactions. Intangible values include information exchange, favours and customer satisfaction (Allee, 2011). For example, TESCO hired a company called DunnHumby to assist them examine their databases to find patterns that will help them come up with a successful marketing plan. Within three months, TESCO realised the expertise Dummhumby was bringing to the company because of how successful they were, (Kotler et al, 1995).

Most times, the reason why information systems fail is because the relationship between IT investments and business goals they are supposed to achieve are not properly defined and well communicated (Skinner, 2003). In order to identify the importance of IS, in the U.S, a survey was conducted in 8 different organisations. Middle-managers were questioned about their information systems and based on average ratings, five common factors to measure the importance of were realised. They are: timeliness of output, accuracy of output, how reliable the output is, the realization of user requirements and how confident the employees are of the systems (Li, 1997). The importance of IS cannot be over emphasised enough. Information systems when used in innovative ways can enable organisations generate new products, change the basis of competition, build barriers to new competitors, save time, effort, cost and change the balance of power in supplier relationships (Lederer and Sethi, 1998).

Types of Information Systems

The following type of information systems aid organisational processes:

Office Automation Systems (OAS)

OAS is an information system that uses computer software, hardware and network to facilitate communication and enhance interaction among employees. They help individuals perform tasks such as recording keeping, scheduling, writing and calculations electronically. For example, a registration department can use AOS to post meeting schedules on the internet and email employees when the schedule is updated (Biscom, 2000).

Transaction Processing Systems (TPS)

TPS is an information system that captures and processes data gathered during the day-to-day transactions in an organisation. They are computerised systems that perform and record daily routine transactions necessary to conduct business. Transactions includes processing pay checks, printing invoices and reservations. Examples of TPS include payroll system and production instructions (Biscom, 2000).

Management Information Systems (MIS)

MIS is an information system that generates accurate, organized and timely information to enable managers make decisions, supervise activities and track progress. MIS are sometimes integrated with TPS. For example, to process a sales order, TPS records sales, enable updates on the customer’s account balance and make the decision from inventory. Related management information systems can extract and summarize information from the TPSs such as reports that highlight daily sales activities, inventory items that needs reordering and list of customers with past due account balances. MIS enables managers to monitor and direct organisational processes to provide accurate and pre-specified reports (Biscom, 2000).

Decision Support Systems (DSSs)

DSS are interactive information systems that provide information, models and data manipulation tools to help make decisions. DSSs enable top managers make quick decisions when the need arises. For example, a need might arise for a sales manager to state how high to set annual sales quotas based on increased sales and lowered product costs (Biscom, 2000).

Executive Support Systems (ESS)

ESS is an information system used by senior managers to make decisions that support long term plans of an organisation. Information is usually presented in the form of graphs and charts that show current trends, ratios and managerial statistics (Biscom, 2000).

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Fig 1. Types of Information Systems

Case Study – TESCO Plc

TESCO plc. is a large British based international grocery retail chain with over 6,700 stores and over 520,000 employees serving millions of customers weekly (TESCO plc, 2013). Information in TESCO flows through the frontline – middle managers to the managing director, based on information received they make decisions (Kumar, 2011). With such huge statistics, there will be numerous operations going on that require IS to serve them efficiently. Based on the types of IS mentioned above, TESCO has IS deployed to suit their processes as an organisation.

Human Resource operations

In their human resource (HR) department they use Oracle HR systems, an MIS system that keeps them updated on changes in employee preferences for their personal and work contact details such as bank and tax contribution details. Employee presence or absence is automatically processed to enable the HR personnel work out their salary and any tax contribution they owe. They can also find out the number of hours employees have worked over a certain period and retrieve monthly reports of expenses compared to costs. (Kumar, 2011; Sysrepublic 2007).

Manufacturing and Production operations

For their manufacturing and production operations, a TPS system called Oracle BI application directly sends event-based and scheduled alerts to users email through mobile devices to help prevent issues from becoming serious. For instance, when overtime levels at a plant is faced with the risk of exceeding budgeted levels, the Oracle application sends alerts to the production plant manager who makes quick decisions based on the alerts to correct the deviation and analyses other ways to pay overtime such as hiring contractors or more full-time workers (Kumar, 2011; Sysrepublic 2007).

Customer Relations operations

In terms of customer relations, to keep up with customers, Tesco Loyalty Card was introduced in 1995 to manage relationships with customers and track their shopping habits to understand and meet their needs (Kotler et al, 1995). TESCO tech support was launched in 2008 to update customers with latest products and offer support, interact and get feedback from them. Based on the feedback they improve the quality of their service (TESCO, 2013).

Supply Chain operations

Being U.K’s largest supermarket chain, TESCO needed to improve their store operations, stock availability and also manage their supply chain. A Real Time Integrator (RTI) combined with Microsoft SQL Server and Microsoft BizTalk Server were the systems TESCO chose to handle such operations. The technology provided TESCO’s head office employees and systems a single, near real-time view of supermarket sales from all their store in a timely and orderly manner. With it, they were able to view sales data to understand customer behaviour, make quick and accurate decisions, manage stock in individual stores, and initiate responses to situations without manual intervention. (Kumar, 2011; Sysrepublic 2007).

SECTION TWO: Discuss the ways in which you would incorporate the sustainability agenda into an organisation’s information-related strategies.

The continuous growth of information technology for business use has drawn much attention to its environment and social effects. This growing impact has attracted organisations to the need to take up responsibilities by adopting sustainable information systems.

Aristotle’s Four Causes

Aristotle famously identified four kinds of causality that talks about causes of change, that is, what is responsible for something and explains the changes by which something came to be the way it is. The four causes are:

Material Cause – refers to the cause of something existing due to changes or processes made on its source. For example, a chair is made of wood.

Formal Cause – refers to the shape or form that something appears.

Efficient Cause – refers to that from which something came to be. For example, a chair is made by a carpenter.

Final Cause – refers to the aim or purpose for which a thing exist. For example, a chair was made to be sat on. (Protevi, 1994; Amin, 2006).

Viewing things from Aristotle’s perspective will help organisations be more conscious of the need for sustainability agendas. They get to understand how their information systems harm the environment if not properly taken care of. For instance, materials used to produce computers are highly toxic. If computers are not properly disposed of, after some time, the toxic substance released can damage the environment where they have been dumped. So, with this knowledge, producers build computers that last for a long time. Also, organisations will see the need to use these computers for a longer period of time and find adequate means to dispose them.

Sustainability Agenda

The sustainability agenda is all about organisations making commitments to incorporate environmental, economic and ethical factors into strategic decision-making and evaluating how they affect the business (Erek, 2011). A sustainability agenda in an organisation seeks to reduce their ecological impact while still making profits. It needs the collaboration of all stakeholders including suppliers, customers, government and employees. It requires organisations to adopt steps to mitigate risks and take advantage of opportunities (Rajagopalan and Goes, 2011). Some economic and environmental sustainability initiatives include: electronic Waste (e-Waste), an initiative to reduce the level of waste caused by highly toxic substances copper contained in electric appliances and IT equipment. Energy initiative to control power consumption on electrical appliances.

Green initiative (Green IT)

Green IT deals with tactical and strategic initiatives which reduces the carbon footprint of organisation’s IT operations, support greener behaviour by employees, customers, suppliers and ensures the sustainability of the resources used by IT (Hird, 2008). Green IT has been taken into consideration by companies with the goal of reducing cost and the environmental impact of information technology (IT) (Erek, 2011). Before launching green initiatives, organisations need to be able to answer question such as why are we doing this, how green are we currently and how green do we intend to be? (Hird, 2008). According to Verdiem (2009), creating a baseline, developing green objectives and implementing them are which organisations can adopt to incorporate sustainability agenda for their IT.

Creating a baseline

The first step towards drawing a Green IT strategy is to create a baseline of your organisation’s IT. It is imperative to have an understanding of the current carbon emission made by your organisation’s IT operations for the purpose of reducing and planning for long term energy needs. Understanding the current state will enable organisations track the elements of Green IT that are within their organisation’s control and those that are not and evaluate payback on any green initiatives that are stated (Verdiem, 2009 )

To begin the baseline, an energy consumption analysis should be made on IT hardware such as desktop, laptops, servers and network peripherals to create an estimate of annual energy usage. Ventilation, heating and cooling requirements necessary to operate organisation’s network should also be considered. Next is to catalog current hardware disposal practises. By doing this, managers will be able to account for how the organisation utilizes a certified PC who ensures that toxic and hazardous substances inside the PC or monitor are properly disposed. The last step in creating a baseline is to examine acquisition and hardware lifecycle (Verdiem, 2009). A study by the United Nations University showed that 1.8 tons of materials are used to produce an average monitor and desktop PC. Organisations should make it their business to know the average cycle and lifespan of their PCs and desktops to help them determine how to consider the environmental impact of producing a PC.

After creating the baseline, IT managers should know for instance, the print cartridges used annually, the power utilisation equation value for the datacentre, the percentage of desktops automatically switched off overnight, temperature to which the datacentre is cooled and the amount of cathode ray tube screens still in operation within the organisation (Hird, 2008; Verdiem, 2009).

Create and Implement Green Objectives

Once a baseline for your IT has been created, identify and focus on some green IT objectives. Some green practises organisations should include in their strategy include:

Power management

Power isn’t cheap and every organisation depends on electricity to power their computers, bulbs, printers, electrical appliances and datacentres. Datacentres use up energy the most and they need to be properly ventilated to prevent overheating which can damage equipment (Spafford, 2008). The way an organisation lay its data centre has a huge impact on the cooling system. To operate an efficient datacentre, virtualization is recommended. Virtualization is the creation of a virtual version of something such as operating systems, servers, network resources or storage device (Rouse, 2010). Green steps that can be implemented in the datacentre include identifying servers that are running, but not providing any services and re-use equipment that is no longer required, but still serviceable. Some major steps are:

Server virtualization

The equipment that draws power the most is the servers. The best way to solve this is through server virtualization. It involves consolidating multiple servers into a single server. That is, you have multiple, independent virtual operating systems on a single, physical computer (Spafford, 2008). By consolidating servers, the organisation reduces hardware space, saves operating costs and reduce energy consumption. For example, if your mail server consumes 560 watts of power, by consolidating it onto a virtualized server the old server will consume nothing because it is not being used (Velte, Velte and Elsenpeter, 2008; Hird, 2008).

Storage

Data is one of an organization’s priced asset and are stored in drives. Just like servers the drives cost a lot to buy, operate and cool especially if the organisation has many disk drives. Like server, drives can be virtualized. This reduces the number of drives in the datacentre, makes migrating data from one place to the other easy while maintaining access to data and reduces cost on power usage and cooling (Velte, Velte and Elsenpeter, 2008).

Management

Apart from the datacentres, the whole organisation uses power all the time. Other efficient ways to reduce energy consumption in organisations is to implement a network-level PC power management solution (Verdiem, 2009). This can be achieved by shutting down PCs after office use, setting monitors to standby after a few minutes of inactivity which can now be done by the use of software applications and remove active screensavers (EHealth Insider, 2012). For other electrical appliances such as printers, organisations can do the following: optimise power-saving sleep mode, reduce the number of printers and use networked multi-function devices to replace those left, reduce the number of separate electronic devices an employee has and apply timer switches to non-networked technology (EHealth Insider, 2012). For example, John Lewis Partnership (JPL) uses a software called Nightwatchman which saves them £100 thousand per annum to monitor their operating system for changes in the power state and reports the change so that they see exactly how much their desktops are costing them in electricity consumption (Hird, 2008). Also where lightening is concerned, organisations can consider implementing a plan where the lights automatically goes off when no movement has been detected for a while.

Extend the useful use of IT hardware – as much as replacing existing hardware with energy efficient ones seem like a good plan, what the plan fails to consider is the impact manufacturing has on the environment. The amount of raw materials used to manufacture the average PC is equivalent to that used to build a mid- sized car. While the mid-sized car lasts approximately 10 years, most PCs last an average of three years. So by extending the use of PCs in your organisation, the environmental footprint can be significantly reduced. When the PCs eventually get to the end of their life cycle in your organisation, getting involved with PC recycling programs that focuses on donating them to charities in developing countries or reselling them (verdiem, 2009).

Conclusion

This paper evaluated the importance of information systems in organisations using TESCO as a case study. Generally, the importance of IS is to enable organisations save time, resources, effort, money and aid facilitate decision making processes. Individually, organisations can realise the importance and value if carefully applied to specific purposes and the outcome is satisfactory. Also sustainability initiatives to aid leverage the impact of technology on the environment was discussed. Organisations should recognise that going green is a process and can’t happen overnight. Steps mentioned to initiate the process includes creating a baseline and implementing objectives to kick-start the process.

Companies are investing huge sums of money introducing information systems hoping to make business processes and information sharing more efficient. With the support of well-defined business goals and high level commitment from top executives and managers, IS when deployed, can provide measurable business value. As organisations enjoy the benefits of using IS, measures should be put in place to control the amount of damage they can cause to the environment by participating in sustainability initiatives, that is Green IT. Apart from saving the environment which in most cases seems to be the motive for sustainability initiatives, the thought of saving lots of money and reduce the amount of space needed for servers through virtualisation is enticing. They should incorporate the sustainability agenda in their strategy in a logical manner that ensures that the efforts are sustainable. Also, to remain sustainable annual reviews should be made to know where the organisation stands and how to move forward if issues occur.