INFORMATION TECHNOLOGY THE NEXT FIVE YEARS The Post-Graduate Diploma in Strategic Business Information Technology
Table of Contents I. Introduction 4 II. Modes of Enquiry 5 A. Simple 6 1. Inductive-consensual 6 2. Analytic-Deductive 7 B. Complex 8 1. Dialectic 8 2. Multiple Realities 9 C. Innovative 10 1. Unbounded systems thinking (UST) 10 D. Conclusion 11 III. External Environment 11 A. The IS Strategy of British Airways 12 B. Socio-political Factors 14 C. Technological Factors 15 D. Economic Factors 16 E. Geographical Factors 17 F. Effects on Strategy Planning and Design 17 IV. Impact on IS Strategy 18 A. Privacy Issues 18 B. Data Accessibility 19 V. The Next Five Years 21 A. IT Plan Installed 21 B. Ticket Distribution System 22 C. Outsourcing of Competitive Services 22 VI. Conclusion 23 VII. References 24
I. Introduction
In the current setting of globalised and internationalized systems of commercial affairs among businesses, firms are often subjected to situations wherein they have to contend with circumstances provided by internal and external factors from the industry they operate. Tools and other theories to deal with such circumstances have been developed through the years. Among these tools is the strategy provided by information systems. These are the tools used by a company in order to make sound decisions for the organization. It is the collection of relevant information that provides them the tools needed to deal with a specific situation which they may encounter in whatever aspects of their operations. (2002) The key word in this discussion is basically the term “relevant” information. The use of this information may possibly spell the success or failure of the operations of a business.
Information, thus, may well be the top asset of an organization in these contemporary times. (2002) It is the management and usage of this asset that helps a company in realizing its organizational goals. Information on certain aspects of the business like those in accounting, products, suppliers, and competitors are among the things that an organization have to take into consideration. This study will be looking into the system as well as the strategy that entails in managing such information in the company. Actions like the methods of inquiry with regards to the acquisition of information will also be considered. In this manner, a particular case will be analyzed in this context. Specifically, the case of British Airways will be taken into consideration. In order to fully understand the importance of information systems (IS) on a company, the study will also take into account the effects of factors that inevitably affect the conduct of operations by the said company. With all these discussions, the paper will then present a set of arguments regarding the possible future of information technology (IT) in the coming years. The said arguments will be in line with the preceding discussions and case study of the effects of the internal and external factors influencing the IS strategy of organizations in general.
II. Modes of Enquiry
As stated in the introductory part of the paper, information is probably the most important asset of a company. In keeping with this premise, the acquisition of this information is similarly important. The following discussion will describe and critically analyze the modes of acquiring such information through enquiry: simple, complex, and innovative.
A. Simple 1. Inductive-consensual
This system is characterized by the process of inferring a general conclusion with a set of information presented to an organization. (1995) Normally, this is basically among the most uncomplicated manner of inquiry considering the outcome of this system is most probably based on the accessible data that an organization has acquired. The most recognizable examples of this simple enquiry system would be the “Delphi” model. (1995) This model basically intends to look at a specific problem in a single perspective and deliver a single ultimate solution.
In looking at the said model, and mode of inquiry for that matter, it is basically a system that exhibits an empiricist system. Given the characteristics and advantages of using such a system, there is indeed several attributes of the process that are likely to provide pitfalls for an organization. One such problem, and maybe the most important thing to note, is that the attribute of the said system of only considering a single perspective and looking for a definite answer. That would be possible in an ideal environment; however, reality does not really permit that kind of smooth sailing for organizations. Questions regarding situations in which organizations encounter are basically complex and entail several views of the issue. To this end, once could surmise that this system is only effective on a limited number of situations. Being a simple and basic form of enquiry probably entails that it could only be effective in simple and basic issues for the organization. Moreover, this also shows that the system is framed in a narrow-minded character of looking into problems and consequently caged in a limited form of thinking since it only deals with “well-structured problems.” (1995) However, this does not mean that the system provided by the Delphi or Inductive-Consensual approach is not really effective and should be discarded as an irrelevant method. Analysis and proper examination of the data collected by an organization is still important, it is just that in the actual setting, things are not as simple as it merely entails a single best solution, especially if there is some uncertainty regarding the biases of the analysts and accuracy of the data.
2. Analytic-Deductive
The system provided by the Analytic-deductive model reveals a rational model of inquiry. The basic assumption on this kind of system is that indicates that every human problem could be converted into a formula wherein specific situation aptly apply. (1995) Similar to the preceding mode, this system assumes that there is indeed a single “truth” or a number that would solve a particular problem.
In this manner, it is seen that both the previous and this system holds somewhat similar weaknesses in such a way that it holds a single solution as key of the problem. It similarly disregards any question that does not pose any sound attributes. Those lacking of “logical consistency” are readily discarded. (1995) It appears that the two believe that the world is built on a collection of plain actions and pieces that could be disassembled and rebuilt to rectify issues that it encounters. To a certain extent, the said system entirely takes on an indicative approach in its inquiry that it disposes the possibility that there may well be other conditional circumstances that would affect the situation. This basic flaw of the simple systems discussed here are attempted to be rectified by the complex systems discussed in the following parts.
B. Complex 1. Dialectic
The presence of conflict serves as a “guarantor” for this system. (1995) In keeping with the discussions of the preceding parts, it appears that the “truth” in this system is contested by a couple of factions with differing views. The system is characterized in such a subjective way that the data presented in this context is caused to undergo several other interpretations with reference to the viewer of the said data. To a certain point, the data in this system does is not used in a manner as to resolve an issue or a set of issues, it is used to present the differing views of the parties involved.
Similar to the setting in courtrooms, the idea in this system would probably take on a really complex process since the concept of the “truth” is contested, not actually how to resolve a problem. In this system, it appears to be time-consuming and virtually pointless since after all is said and done, nothing is resolved, and instead a problem is essentially ascertained. So basically, this system is used to make sure that there is a problem. And given that the “truth” is subjected to several interpretations, the actual outcome of the process may well be uncertain considering it is openly subjected to biases of the decision-makers as well as the possibility of defective information used in this context.
2. Multiple Realities
This mode of inquiry presents a considerably complex system as compared to the previous types. The premise in this context is that the model and the data are inseparable aspects of a problem. It is somewhat a more comprehensive type of process since it consists of a “range of representations” and a complementary “range of solutions.” (1995) This means that the perception of the observer, the data set and the model, is presented and considered concurrently with the other existing sets that presents other views and understandings of the problem. And to a certain level, the observer is immersed in the observation process. In this manner the observer is given a broad and more comprehensive view of the situation and the attached circumstances that entails from other perspectives.
In looking at this picture, the system of multiple realities presents the observer with a more objective stance by presenting a set of other data set derived from different perspectives. The problem in this scenario is that there is still a possibility of the observer’s bias to be present. Moreover, there is also the possibility that the number of perspectives and data set provided may well create an overload of information to the observer. Irrelevant information as well as those considered to be false may mislead and eventually change the conviction of the observer which may result to disastrous outcomes.
C. Innovative 1. Unbounded systems thinking (UST)
This system is an incorporation of all the IS systems that has been presented in this discussion. In this system, it assumes that everything interacts with everything. (1995) This means it favours none of the previously discussed systems, instead the process is presented in a manner that every system is used appropriately in this extent. The key word in this system is “unbounded,” which means that this is not governed by any model, theory, or belief of any individual or set of people. By this, it possesses the simple and complex attributes of the previous systems. It presents an idea of truth in the first two systems; and it recognizes the concept of conflict and the presence of other perspectives as presented by the subsequent systems. Though it could be seen that the shortcomings of the said systems may well be complemented by each other, the concept of unbounded system thinking is considerably new. Being an innovative however presents the possibility that there are unforeseen pitfalls in this process.
D. Conclusion
The systems presented in this part of the paper reveals the existence of inquiry systems that are available for the observer. These are systems that could eventually resolve problems for organizations. On this context, it appears that the UST appears to be an ideal system to use in this study. Though there are still reservations on whether there are possible unforeseen pitfalls in using such system, it would show a basic understanding of both simple and complex systems available to the observer.
III. External Environment
The external environment of an organization has a significant effect on its overall operations. To a certain extent, this is a cliché. ( 2000, ) It is the manner in which the organization deal with the environment which it operates on establishes its resolve on its market orientation. The past and existing literature has established several accounts on how companies prevailed over such changes in the environment. In a certain point, it is in the environment of the organization that spells how they will develop eventually in their operations. Organization’s capacity for innovation also depends on how they deal with such pressures from the said environment. (2002, )
This part of the paper is going to analyze the effects of the external environment of a company with its IS system. The company of focus is British Airways. Recent changes have been noted in the information system of the said airline company. After taking note of the said system, the paper will also look into the factors that might have affected it such as socio-political, technological, economic, and geographical aspects of surrounding British Airways. After the said discussions, the possible effects of the said factors and a conclusion will be taken into account by the researcher.
A. The IS Strategy of British Airways
British Airways is among the companies that have the largest fleets in the European Region. ( 2002) On its most recent years of operations, it is operationalising a program dealing with “Three Cs”: company, customers, and competitors. The company is placing its attention on a more recent model of dealing with customers, total customer satisfaction. This means that the company is not only involved with the design, manufacturing, and actual provision of the services. They have also included in their concern the post-sale services and recognition of quality and safety of their product and services. (1993) This indicates that British Airways recognizes the fact that ensuring that every protocol carried out during the provision of the business in not sufficient to ensure the satisfaction of the clients. Ensuring total customer satisfaction compels them to ensure quality even after the clients have left their establishments and aircrafts. This is done by continuously ensuring that the market knows the level of safety, comfort, and high level of service quality given by the organization.
British Airways similarly takes into consideration aspects regarding their company. They have invested a great amount of funds to deal with research and development (R&D), product modification, and advertising attributes of the organization. (2002) In analyzing this course of action taken by the company, it would appear that these would help in acquiring the paramount quality in terms of the available products in the market. Though it is expected that such a huge investment would entail an initial downturn for the company, this would merely be short-lived. The long-standing results would entail profitable outcomes. Similarly, with the increased development in the said areas, considerable number of the consuming public would be able to take benefit of the said improvements. This will consequently help in building the market share of the organization.
On the part addressing its competitors, given that they have carried out specific advancements with regards to research and development, the company created an initiative to register their products and services n patents. In doing this, the company’s practices and products would be less likely to be copied and imitated by other players in the industry. Otherwise, they will face charges from the national government. ( 2003)
B. Socio-political Factors
Given that the majority of the flights of British Airways is based on the European Union, major changes in the socio-political environment of the said area may considerably affect the industry. For one, there was an abolition of the duty-free in the region. (1999) This means that there is a decline in the sales of duty-free products within the region. Similarly, there has been a surge with regards to the price of airport landing charges. (2002) This indicates a considerable effect on the low-cost airlines that British Airlines are operating. Though it not really clear whether the company would shift the excess charge to the consumers, it would be less likely for the company to shoulder the increased expenses. Another issue is the installation of hush kits in aircrafts. This is a result of an EU directive indicating that every aircraft have to install such a device in order to meet the noise requirements of the member states. (2001) This is not discounting the pre-exiting effects of the 911 attacks where racial profiling and other surveillance have triggered anxiety to the travelling public. These factors have affected the airline industry in general.
C. Technological Factors
In the said industry, the internet has become one of the major factors in the sale and bookings of airline tickets. The internet has been considered as among the low cost medium to which bookings and ticket sales among airline companies employ. (1997) The use of the internet has also enabled these companies to easily tap the international market given the range on which internet access is able to provide. Moreover, the connected industries like tourism have similarly benefited in the use of the internet as a medium for travel access. (2001) Capacity of the Internet to store and communicate data throughout the world has significantly changed the way flights determined as well as the level of competition among the other players in the airline industry. With existing method of tying-up with tourism organizations, airline companies are now competing in a level to which service and costs are among the basic attributes sought after in the market. This means that the greater access of the buying public to the said airline companies by purchasing tickets and booking flights has given them considerable power in the industry.
D. Economic Factors
As stated in the earlier factors of the paper, the recent rise of terror attacks and the past September 11 attacks have made the passengers wary of accessing airlines and employing aircrafts as their main mode of transport. Unlike the earlier decades where hijacking an aircraft is and demanding for ransoms are more prevalent, the recent attacks in the United States have triggered panic and provided a realization that terrorism has gone to a level where aircrafts are used as weapons for destruction.
Other economic factor that may be considered in this part is the continuously erratic character of oil price. Since airline companies rely mostly on the petroleum products for their operations, they are at the mercy of oil companies all over the world. A simple change in price could entail millions of losses for airline companies. This is especially true in the European region where flights are relatively covering short distances. On this context, airline companies could not afford to change their ticketing charges irregularly to compensate for the losses in oil. There are other competitors other than those in the airline industry: trains and rental cars provide similar transportation services. If the airline companies may opt to increase their charges, they may lose consumers who are less inclined to fly.
E. Geographical Factors
The European region, being the predominant market to which British Airways cater, encompasses thirty-nine countries. ( 2001) It is connected by the huge Alpine mountain chain including the Pyrenees, the Alps, the Carpathians, the Balkans, and the Caucasus. Along with this mountainous terrain is the European plain that stretches from France to the Urals. It is a highly industrialized region along with a highly developed transportation system. (2001) Inland water transportation is also made possible by interconnected river ways and canals. With its great ports, the said region relies heavily on foreign trading.
F. Effects on Strategy Planning and Design
The key components accountable for course-plotting the firm to success are numerous. The reforms in the company have been instrumental in this undertaking. The investment in modern passenger aircrafts, equipment for online reservation schemes are the important components of the reforms. The development of the culture within the business was similarly a pinnacle event in predicting the airline goals. With a support of great marketing plans and marketing mix, British Airways has been capable of keeping away from the other players in the industry to heights of quality services to its clients.
IV. Impact on IS Strategy A. Privacy Issues
One impact on IS strategy of the external environment is the more on the ethical issues on privacy of the passengers. An important task of the European Union, Given that it is the primary market of British Airways, is to guarantee the free flow of individuals across borders. The EU therefore functions a part in the assurances and processes instituted to administer and supervise border traffic. A noteworthy piece of this movement started with the Schengen Agreement in 1985, and has consequently carried on with the organization of new practices and schemes. (2003) The Schengen Information System (SIS) started in 1995 and was perceived as payment tools for the elimination of internal borders connecting France, Germany, Luxembourg, and the Netherlands. (2003) It allows Member States to acquire data with regards to specific categories of individuals and property. Member States add by appending information on individuals wanted for seize, individuals to be positioned under surveillance or exposed to particular checks; persons to be denied entry at external borders; and missing or stolen articles. The information strategy of British Airways is therefore compelled to adhere to such directives and in the same time guarantee the confidentiality of the data they have acquired from the passengers.
In reply to the terrorist attacks in the U.S. in 2001, the EU chooses to put into practice a Visa Information System (VIS). ( 2004) VIS would cleave to personal data on each visa candidate to an EU member state together with their nationality at birth, reasons for denial, and connections to other requests. It will be an essential catalogue that is balanced by national systems that jointly connect border checkpoints of every state. It is intended to administer biometric information. There is a possibility that the fingerprints could be employed for other functions, and could similarly bring about stolen identities. By itself it should be revealed that biometric information should not be kept in the central database except on occasions when it is completely essential. Rather this paper suggests that the biometrics be held in reserve simply on a chip on the visa itself. Similarly, there is also the issue on the centralization of biometrics for the reason that the admission to the VIS was informal and extensive. Ever since the London bombings in 2005 the impetus has developed for extra databases and trailing devices. (Spies, 2005) The UK administration of the EU has been demanding for an expansion of the admission rights to VIS, authorizing law enforcement agencies all over the EU to have a right to use all the information held there.
B. Data Accessibility
It is not clear whether the all employees of the British Airways have access on vital information of the company. However, it could be ascertained that there are a number of individuals who could access these information. The worse case could reveal that British Airways would be at great risk with regards to the leaking of information external of the company. This information could be used against the company by other players in the industry where British Airways partakes in. The worse part is that every employee of the said company is able to carry this out without any restriction or any form of sanction once they are caught. To boot, there are several hundreds of employees that could be suspected once vital information indeed leaked outside the company. And this is situation where the said company incurs a great liability. In this context, the keeping of the trade secrets of British Airways, is compromised. According to the case of Forster v Suggett [1918] 35 TLR 87, a trade secret could be classified as a “technical, scientific, secret formula or design.” This means that the stated future projects could be leaked out from the said company. The intricacies of the said future plans of the prospective projects listed in the portfolio of British Airways may be at risk of being given to people outside of the firm. Moreover, the case of Lansing Linde Ltd v Kerr [1991] IRLR 80 similarly stated that trade secrets are information that are considered as a highly confidential which could also take the form of a “non-technical” nature. According to the said case, such information, if leaked to the other players in the industry, may trigger an actual and considerable damage to the firm, in this case British Airways.
Another issue that may arise in this context is the format used by British Airways in its operations. If it uses an open source format, it the work is accessible to everyone who uses the same application as that of British Airways. (2002) This implies that after a project is done, then the project becomes public and free. This presents a new problem in the context of the intellectual property. In this situation, there is a considerable amount of risk for the company with regards to the loss of Intellectual property, provided that British Airways continues to use an open source in their codes.
V. The Next Five Years In this part of the study, the effects of information technology (IT) on the industry to which the analyzed company is included will be discussed. This paper contends that there will be three major effects of IT in the airline industry: the permanent installation of IT plans, improved distribution system, and outsourcing several airline services. A. IT Plan Installed Companies in this industry will be installing an Information technology plan as a part of their annual planning process. The emergence of such information systems as a major part of the operations of the airline industry has revealed its potential to help companies emerge as top players in the industry. The use of IT will help managers and vital decision makers of the firm to create the appropriate course of action by facilitating information throughout the organization. Operations in production, marketing, customer relations, distribution, finance, human resources, and network processes are among the basic areas to which an organization would be able to streamline its functions with IT. ( 2002) Nonetheless, the success of an IT plan installed in the airline industry, or any other industry for that matter, depends on the attitude of the decision making entities in the individual companies towards the use of IT in the decision making process. (2000) It has been noted in several studies, as it has been established in the discussions above that the emergence of IT has enhanced the operations of firms to a level much higher compared to earlier decades. From the basic use of these IT processes and installing the appropriate IT plan, the firm would be able to generate sensible and the best possible policies for their organisation to implement. (2005) B. Ticket Distribution System
The speed of transaction provided by the internet will be providing the competitive advantage for industries in the airline business. ( 2003) Though there are several other conventional processes of ticket acquisition and booking methods, such as through phone calls and travel agencies, the internet medium appears to be among the cheapest modes of accessing the services of airline companies. ( 1997,) In this manner, convenience is generally given to the clients.
The trend towards e-marketing has been the fad among companies wanting to acquire a broader market share. Recent innovations such as the “e-ticketing” have also emerged as on of the most convenient form of ticket distribution for the airline industry. (2003) These types of systems employ the use of the World Wide Web for wider coverage and expediency in terms of booking flights and purchase of tickets.
C. Outsourcing of Competitive Services
This paper has constantly preached about the advantages of IT development in a company, especially in the airline industry. However, this would entail considerable costs and expenses for the company, unless it would decide to outsource its IT services. Outsourcing is a fairly regular method that has been introduced in business in recent years. It could provide several advantages for the firm’s operations. ( 2003) In a similar manner, outsourcing the IS needs of the company could well spell the future success of the operations in the airline industry.
VI. Conclusion
Information system is integral to the business of British airways. Running an airline is based on a high amount of information content. Information systems play a critical role in such key functions as the passenger reservation systems; yield management systems and flight operation. Apart from the above-mentioned examples there are various other fields in which information systems play a vital role in British airways. Some of them are very useful in terms to know the financial status of British airways, the future investment etc.
British airways can be broadly divided into different levels of information systems within the organization. Some of them, which are mentioned above, are Strategic level information system. This information system is used to take strategic decisions to aid in forecasting the budget for the company. Decisions include review of financial statements and estimations of future profits and costs and thus helping them to budget for the next few years.
VII. References
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