Essay on Management Information Systems
School Service Supply Inc. (SSS) is the statewide provider of school supplies. The company provides a wide range of materials and supplies to K-12 schools. SSS has a diverse network of suppliers and offers more than 88,000 SKUs to the schools. The company is the result of the unification of many regional suppliers. It should be noted that SSS does not supply textbooks and computers to the schools. SSS also has a wide sales and distribution network: there are 250 outside agents who cover all states and major areas; there are also 8 large distribution centers. The primary marketing tool of SSS is its large printed catalog.
There are different types of competitors for SSS. Although there are no direct competitors, large retailers such as Office Depot (and other furniture retailers), national manufacturer of low-end school furniture Virco and local suppliers target the same clients are SSS. Currently the market share belonging to SSS is only 15%. One of the deficiencies of SSS is its outdated information system: the company uses different software and information systems for different processes (i.e. there are separate systems for ordering, forecasting demand, managing inventory, etc.). As a result, 30% of orders have errors – arrive incomplete, are inaccurate or late.
Strengths and weaknesses of SSS
SSS has several key strengths. First of all, the company is represented in all states and has many effective sales representatives. Secondly, SSS has an efficient supply chain which includes more than 8,000 suppliers. The number of SKUs offered by SSS is also impressive and exceeds 88,000 units. Furthermore, SSS occupies a unique market niche which is not addressed directly by the competitors. SSS emerged due to various mergers and acquisitions of regional suppliers; therefore, the company is composed of experienced businessmen with a good market understanding of at least their region or state. The company can further increase sales and leverage its strengths by contacting more schools, offering a convenient way of reviewing the items offered, providing discounts and bulk orders to their clients.
SSS also has a number of weaknesses. Its first weakness is the inefficiency of internal processes. In particular, 30% of incorrect or late orders is an indicator of poorly organized processes; such errors are likely to discourage customers. Secondly, SSS has inefficient marketing approach: it is expensive and inconvenient to market the items using catalogs nowadays. It seems that SSS is not represented in the web and hence more advanced school purchase agents simply have no information about SSS. The inefficiency of information systems in SSS is also a significant weakness: the company’s systems are outdated and are not communicating with each other.
Threats and opportunities of SSS
There are plenty of market opportunities for SSS. The company focuses on a particular market segment – schools, and currently reached only 15% of this market. SSS can establish contacts with the new customers and expand its business. Furthermore, SSS can include computers and textbooks as part of its offers. It might be efficient to offer turnkey solutions for classes and schools. It might be also efficient for SSS to get in touch with the providers of school software and to include software as part of their offers. SSS can collaborate with home schoolers and specialized schools. In addition to this, SSS can expand its market segment to include colleges and universities. One more opportunity is the use of online sales and creating a special website with interactive catalog of items offered by SSS.
The threat originating from internal sources is the decline of SSS’s reputation due to failed orders and the consequent decline of their market position. The biggest external threat emerges from competition, especially from large competitors such as Office Depot. Such competitors have more efficient operations and more sophisticated customer management systems, so they can easily enter the market segment where SSS is operating. Other threats include difficulty of competing with local “mom and pop” school suppliers because of the personal links existing between the schools and these suppliers and seasonality of sales.
Benefits of information systems
The use of a modern integrated management information system will significantly assist SSS in improving its market position. The use of integrated information systems in an organization has a number of advantages. Immediate benefits emerge from operational benefits – SSS will be able to enhance performance, to increase turnover and improve efficiency of managing inventory, will be able to manage customer relationships in a better way, etc (Stair & Reynolds, 2013). One more direct advantage of using one powerful information system will be the integration and alignment of all processes (Stair & Reynolds, 2013). Using such system, SSS will be able to synchronize the actions of its suppliers and sales representatives.
It is recommended to align the information system with organizational website and ecommerce opportunities. Customers will be able to place orders online or by phone, to review items offered by SSS, to post own reviews and share experiences. Sales representatives will be able to check the availability of items, offer bulk prices and form orders “on the go”. Furthermore, suppliers will be able to receive and ship orders instantly. In addition to this, the use of information system will help SSS to manage its logistics and transportation more efficiently: the company will be able to merge orders and deliveries when the inventory management systems of its distribution centers are integrated.
Creating a competitive advantage using information systems
In addition to operational benefits offered by the use of information systems, there also emerge tactical and strategic benefits (Sousa & Oz, 2014). Tactical benefits include increased visibility of business operations, improved forecasting, the opportunity to make preliminary orders and to negotiate different options of the order with the clients (Sousa & Oz, 2014). The availability of operational and tactical information creates a background for developing business intelligence. SSS will be able to set more precise strategic goals and assess its current and future market position with the help of information systems. Employees and senior management will be able to trace real-time information and therefore improve decision-making, formation of prices and interactions with the customers.
Using information systems, SSS can develop the following competitive advantages: optimize its costs and overheads, optimize the supply chain, make prices more competitive, enhance planning and forecasting, etc. Furthermore, the presence of information system will help SSS add new items to its catalog such as school textbooks, computers and even school software. Therefore, the implementation of a unified management information system will help SSS improve its operations, strengthen its market position and create competitive advantages.
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