Introduction
Strategic information systems have been largely utilized in the corporate world ever since time immemorial. However, the emergence of information technology has revolutionalized information systems and has impacted heavily on individuals, organizations, and societies (Galliers and Leidner 1).
Information technology has become a necessary condition for any business to survive in the market and companies are continually seeking information technology-based information systems to help them gain competitive advantage (Galliers and Leidner 1). With progress in time, information technology has reached greater heights in terms of efficiency, reliability and profitability.
Different levels in management hierarchy are utilizing information technology with the main aim of increasing business efficiency as well as ensuring strategic management of organizations (Galliers and Leidner 1).
Since the managerial tasks are increasingly becoming complex, the need for advanced information systems constantly arises which aims at shifting the information systems from structured routinized support to unstructured complex enquiries serving at the highest levels of management (Galliers and Leidner 1)
National Grid Company, an international electricity and gas company based in the UK and the United States is a gas and electricity distributing company that serves millions of people situated in Great Britain and the Northern part of US in a fast, reliable, and efficient manner (National grid par 1).
The company owns the high voltage transmission network that is spread across England and Wales and is also in charge of the system that operates in Great Britain.
In addition, the company owns the high-pressure gas transmission system in Britain hence delivering gas and electricity to millions of consumers across the country (National grid par 4). National Grid in the United States delivers electricity to over three million people spread across the North-Eastern part of the United States.
The company embraces information technology as a means to implement its daily activities. However, the dynamic nature of information technology results in uncertainties in the business environment limiting its predictability. National Grid has to identify the relevant information which is essential for appropriate decision making in the company.
Through information technology, this information can be recorded, synthesized, and disseminated in a fast and efficient way. Since the company’s effective decision making is aided by availability of accurate information, the company heavily invests on information technology as a means to achieve this end.
Advances in technology have further aided the development of corporate databases, which serve to provide the company management with information about the business (Galliers and Leidner 11). National grid’s data structures are a reflection of the company’s interpretation and association of data, which reflect the persisting interrelationships in the company.
Strategic information needs of National Grid
Assuming that UK based and US based National grid companies utilize different strategic information systems, the two companies need to synchronize their systems for national Grid Company to efficiently reap benefits associated with strategic information systems. It has to employ information systems that coordinate both vertical and horizontal interaction in both companies that are situated in different countries.
The operating environment, as well as the nature of products that national grid company offers to consumers i.e., gas and electricity requires timely, efficient and effective information systems to aid in service delivery, customer and internal management, as well as the decision making process.
In order to meet these needs, the company needs evaluate its information management needs to assess whether or not the existing information systems meet the intended purpose of strategic information systems.
To assess the effectiveness of the existing information systems, National grid should ensure that the existing systems facilitate derivation of the information required by various stakeholders and its presentation in a meaningful and systematic fashion to its users in convenient time.
The information generated by these systems should be relevant and should assist the organization in decision-making process that will enable National Grid to achieve its objectives among which are; improvement of customer safety and the company’s operational performance, being able to deliver strong, sustainable regulatory and long term contracts which yields high returns, modernization and advancing the transmission and distribution networks, Expanding the company’s capability and reaching for higher levels of efficiency, building trust and transparency as well as positively shaping the energy and climate change agenda in both the UK and the United States (National grid par 6).
The cost of sustaining the information systems should be justifiable and should not negatively impact on the profitability and financial performance of the company. National Grid needs to weigh the benefits associated with information system development and compare them with the costs associated with the same in order to establish whether the development is justifiable.
In addition, the company should also consider the alternative opportunity cost associated with development of information systems. The information generated by the company’s information systems should serve the needs of its end users and should also be distributed to the appropriate audience (Pashke, Pashke &Twargowski par 9).
The management systems should see to it that the frequency of data preparation and generation should be appropriate and the level of data preciseness should conform to usage requirements (Pashke, Pashke &Twargowski par 10).
National Grid should ensure that its reporting format is appropriate for the intended user and should reliably serve its intended purpose. In addition, the range of data confidence among the management should be sufficient to justify adoption or utilization of a particular information system (Pashke, Pashke &Twargowski par 13).
Through the existing information management systems, National Grid avoids generation of unnecessary information and management reports. Further, the company should minimize its data duplication by centralizing data report preparation. However, a significant amount of information duplication is necessary for a certain level of management efficiency, especially if the company integrates its two branches.
Overly detailed data and information systems overwhelm the decision makers, therefore the company should simplify the management systems and data to enhance the user’s ability to digest and utilize the information (Pashke, Pashke &Twargowski par 15).
Strategic information systems of National grid should also ensure that data is availed to the decision-makers in both regions on timely bases preferably before hand to assist in decision making and the report should be formatted in such a way that they serve the end-user needs (Pashke, Pashke &Twargowski par 18).
Recently, National Grid Company US adopted the ZEMA suite enterprise data management solution with an intention of supporting and improving the US energy procurement operations (Anon par 1). The company utilizes the system to gain a centralized source for its market data, which is essential for its market data which is essential for strategic decision making.
The system further provides the company with advanced automated analytics and data modelling and risk management system. The company replaced the data management systems to derive benefits associated with ZEMA, such as risk monitoring, improved information systems and better integration (Anon par 2).
If National Grid UK adopted a similar system the company would not only reap similar benefits as those being accrued by National Grid US, but would also promote cohesion and coordination of management strategies in both regions.
Strategic information systems and ebusiness planning activities
Over the past few years, global interconnectivity has been enhanced by improved communication, especially through the internet. In fact, the internet has played a major role in facilitating business associations and marketing strategies.
The National Grid Company is no exception in utilization of the internet and automated means of communication to facilitate distribution of its products to the consumers in both regions where it operates.
In this case, we assume that the company has already shifted its management systems from classical systems and is leaning more towards ebusiness. This is necessary for the success of any large international corporation like National Grid.
The beginning of ebusiness has its roots traced back to the establishment of interactive websites, which created opportunities for people to send and receive information from a company’s web server (Pant & Ravichandran par 1). Most companies have adopted this method due to technological advancements, which has continually made the internet a more preferred choice of information systems in organizations.
Use of the internet for enterprise applications has led to the establishment of a new of a new breed of information systems referred to as ebusiness information system (Pant & Ravichandran 85). This refers to computer applications that use the internet technology and its universal connectivity among other capabilities of the browser to integrate businesses within and beyond the enterprise to global levels.
Ebusiness information systems in National Grid company allows transactions to be conducted in an integrated manner and enlarged information space by eliminating the constraints that are presented by the presence of diverse computing platforms, networks and application (Pant & Ravichandran 85).
The internets technologies allow automation of inter-organizational processes and allow the company’s personnel to interact with the company’s information systems in an interesting and cost-efficient manner. This makes the ebusiness information systems a key strategic component of any organization. However, it is vital that organizations plan carefully while designing ebusiness systems.
This is because these information systems differ from classical inter-organization information systems in significant ways and need to be approached more cautiously. This risk is further elevated by limited research existing in the field of ebusiness system planning making it all the same a more risky option to venture into.
The existing information planning models were developed before the advent of the internet, it is not surprising that these models should fail to put into consideration the internal forces that shape the company growth and successes amidst a dynamic and ever-changing economic climate hence in most cases fails to address the information planning needs of e business (Pant & Ravichandran 86).
The existing models are widely classified into impact models which focus on the potential impacts of information technology on organizational tasks and processes and utilize this to identify opportunities for deploying information systems and alignment models which focus on aligning information system plans and priorities with organization strategy and business goals (Pant & Ravichandran 83).
The activities of National grid involving marketing, delivering, and support of products can be presented in a value chain. However, the company has shifted its approach from the value chain into value hubs where the linear value chain perspective has evolved into emarket places.
This is primarily due to competitive pressures to respond to direct selling strategy as well as maturation of the internet and internet and internet-related technologies (Pant & Ravichandran 86). The company preference of ebusiness information systems can be attributed to the transaction cost theory, which explains the economic of information and information systems within the organization (Pant & Ravichandran 87).
According to this theory, despite the assumptions that transactions through exchange mechanisms are homogenous, real-life transactions are more complicated and involve real cost that the organization has to incur (Pant & Ravichandran 87).
National grid operates within the energy market and serves as a negation to the energy market in the sense that the company replaces the market coordination with coordination executed through explicit command and control. The markets reduce transaction costs as the people dealing through the market do not need to negotiate and execute individual contracts.
In addition, integration of organizational and inter-organization processes significantly reduces the cost of transaction (Pant & Ravichandran 87).
Information technology has the ability to considerably lower coordination costs while ensuring that the associated transaction risk is not elevated hence prompting National Grid to increase its efforts of integrating the two regions rather than concentrating on vertical integration of single firms.
The potential for lowering costs of technologically based information systems provide national grid with a reason to adopt ebusiness information systems in order to survive in the economy.
Network externalities explain how the value of a product or service increases as the number of users increase (Pant & Ravichandran 88). The more the number of people using the electricity and gas distributed by National grid, the more likely it is to attract more consumers. As more people interact via ebusiness information systems, the higher the value that the system achieves.
Higher value will be achieved by ebusiness information systems that relate global communities to customers (Pant & Ravichandran 89). Information is a key agent that serves to maintain cohesion among the two organizations hence it must be handled effectively. Through information, national grid is able to coordinate its distribution channels in both countries as well as the supply chains.
Whether information is utilized for purposes of control or coordination, the company formulates it in such a way that it serves its intended purpose for the good of the company. Information management needs of National grid are shaped by the business needs to integrate its processes in the two countries, exchange of information in a timely manner as well as creating positive network externalities (Pant & Ravichandran 90).
In its attempt to integrate its information systems in both regions, the company needs to conceptualize the process in terms of the extent in which the ebusiness information system integrates with systems and processes across its value chain as well as the horizontal link whereby the UK has to link with the US in support of the business model.
However, the complexity of information systems increases as the integration continues to advance and upon the integration of information systems in the two corporations, the company should be prepared to handle the costs and other challenges associated with complex systems.
Knowledge management and customer relationship management
National Grid Company carries out quarterly surveys in order to establish customer satisfaction (National grid par1). In these surveys, the company aims at establishing consumer level of satisfaction from emergency response and repair as well as other consumer demands. The company in turn utilizes the information to make necessary adjustment regarding customer satisfaction.
In the company’s gas utility businesses, the annual survey and customer satisfaction ratings in the 2008/2009 registered decline in business during the year.
The company consequently planned to implement initiative that improves customer satisfaction through putting more emphasis on communication and price, corporate citizenship, automating bill payment and collection, improving gas and electricity quality, promoting reliability and safety among the customers as well as improving customer operations (National Grid par 5).
Reliability and service issues are the major components that determine consumer satisfaction. The company heavily invests on enhancing reliability in order to improve consumer perception and satisfaction and aims at achieving the first quartile performance in customer satisfaction surveys by the year 2013
National grid treats its customers appropriately and ensures that the communicate clearly and precisely while ensuring that interaction between them and the customers is straight forward while their main focus involves customer service and operational excellence (National grid par 1).
The company’s transmission customer service principally facilitates establishment of new connections as well as maintenance of the already existing customers (National grid par 2).
The company achieves this in conjunction with the independent system operators situated in the regions in which they operate. In addition, the company ensures that it delivers high-quality service to its consumers by ensuring that it adheres to the standards defined by the country’s regulators.
Conclusion
Strategic information management systems are key determinant of a company’s performance on almost all areas. Companies, therefore, need to adopt the appropriate systems to ensure that their operations are efficient. Introduction and advancement of technology have facilitated improvement in corporate strategic management systems.
In fact most corporations refer information technology as a necessary evil whereby companies have to adopt it despite the risks associated with it. Companies should not only develop strategic information systems that are fast efficient and have the ability to handle complex tasks, they should also be user-friendly and should allow the users to utilize them in an interactive and simplified manner.
Companies should also deal with the negative effects associated with technologically based strategic management information systems to ensure that the company does not incur losses and costs associated with the occurrence of such effects.
As an international corporation, National Grid has adopted the advanced technologically based strategic information management systems and reaps benefits from this, especially due to its large scale nature of service provision. The company should further aim at integrating the information systems in all the areas in which it operates in order to reap benefits associated with economies of scale.
However, this process requires a lot of effort to deal with increased complexities. Further, the company utilizes information derived from surveys to make adjustments that ensure that the company achieves higher levels of efficiency and customer satisfaction.
From the discussed case, it is evident that strategic information systems are an important component of any business operations and companies should invest in efficient information systems to promote their performance in the economy.
Works Cited
Anon. National Grid implements ZEMA suite replacing incumbent competitive solution, Power group Inc, 2009, ZEMA website.
Galliers, Robert & Leidner, E. Dorothy. Strategic information management: challenges and strategies in management, Burlington: Butterworth-Heinemann, 2003. Print.
National Grid. Our vision strategy and objectives, our customers-customer service and network reliabilities, National Grid, 2010, the national Grid official website.
Pant, Somendra & Ravichandran, T: A framework for information systems planning for ebusiness, MCB university press, 2001, Logistics information management PDF publication.
Pashke, F. Gregory., Pashke, D. Fargo & Twargowski. Evaluative criteria for management information needs, Vanamburg group Inc, 2008. The CPA journal (a publication of the New York Society of CPA’s).