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Nestle Company’s IT Governance and Decision Making Case Study


Introduction

Nestle has been operating in the global market for quite a while, gaining the reputation of worldly renowned entrepreneurship and becoming the household name for millions of people all over the world. However, as society progresses to the next stage of development, the company must keep pace with it. Particularly, the issue regarding the use of IR governance as the approach for making the firm more efficient and increasing customer satisfaction rates deserves to be brought up. Although the current state of IT governance in Nestle can be interpreted as bearable, the company still needs a creativity and agility-based framework that will help it improve its current rates, primarily, the derived value.

Objectives

Among the essential objectives that Nestle will have to attain, the identification of the dents in its current IT governance framework and the effects that the problems with the latter have on the firms’ success, especially the increase in derived value, need to be identified. In addition, the tool for assessing the progress made by the organization will have to be introduced into the evaluation process. Although CORBIT helps locate the crucial factors in a rather efficient manner, it does not permit evaluating the situation in detail.

Moreover, the identification of the IT governance strategy to be used in the company is going to be a crucial step on its way to global success. Creating the IT governance framework that will help the firm process data faster, respond to the needs of its stakeholders and maintain the company data safe will contribute to a significant drop in the derived value rates, attract more customers, and avoid suffering severe losses.

Strengths

Identifying the company’s strengths, one must give it credit for being open to innovations and new challenges (“Nestle Global” par. 1). In addition, the leadership strategy adopted by the company leader invited opportunities for a fast change and the renovation of the frim’s operational frameworks (“The Nestlé Management and Leadership Principles” par. 3).

Weaknesses

A single look at Nestlé’s current IT strategy of governance will show that the firm is in desperate need of a global IT renovation. According to recent reports, the entrepreneurship has suffered a harsh blow from one of its partners, Peters Ice Cream, which terminated its operations with Nestle: “Peters Ice Cream will have no second chances when it breaks away from former parent Nestlé’s global SAP system, as it pushes to stand up a completely new IT environment by August 1” (Crozier par. 1).

The lack of a proper IT governance strategy that will help the firm coordinate the key processes across its global supply chain and meet the demands of its customers leads to a major drop in quality and a range of losses inflicted by an increase in the derived value rise.

Risk factors

A closer look at the risk factors above will reveal that the largest threat faced by the company at present concerns the mismanagement of data due to poor use of the existing IT data transfer tools as well as the danger of information leakage (i.e., data theft committed by cyber criminals).

Effects of IT Governance

IT governance, in its turn, will help not only mend the holes in the current security system of the organization but also prevent further instances of information mismanagement from occurring. Particularly, the IT governance framework will create premises for enhancing awareness regarding the subject matter. As a result, it is expected that the staff will become aware of the essential security management steps that have to be taken to store and transfer data properly.

Derived Value

According to the existing records provided by the company in question, the derived value of Nestle may be reduced significantly. The specified objective can be attained by suggesting a different mode of data transfer by introducing the corresponding IT tools and creating a more balanced IT governance strategy.

The above steps are curial as the speed and efficacy of data transfer define the course of a company’s development and success rates in the global economy to a considerable extent. For instance, the use of the latest IT innovations will help identify the possible hindrances in the transportation processes so that the raw materials or the end products could be delivered in a manner as efficient and expeditious as possible. At this point, the significance of maintaining the product quality rates high needs to be mentioned.

With the adoption of the IT Governance system that will help trace every process occurring in the system of the company’s Global Supply Chain, the threat of the product being deformed and the raw materials suffering serious damage will be reduced significantly. As a result, the shipment value, which is related directly to the derived value, can be reduced significantly. Indeed, according to the existing definition. The derived value is defined by the shipment-related expenses to a considerable extent (Lami, 2014). Therefore, by preventing accidents that may possibly occur in the process of shipment, one is likely to reduce the derived value of the product significantly, therefore contributing to the increase in the firm’s success in the target market.

Next Steps

Seeing that the introduction of CORBIT into the framework of the company’s operations is likely to bring its efficacy rates up, it will be necessary to introduce an evaluation system into the company’s framework based on the changes that the CORBIT strategy has allowed for. Particularly, it will be crucial to make sure that the firm adopts the IT governance strategy that can coexist with the rest of the corporate processes.

Therefore, Nestlé should consider developing the IT governance framework that is linked directly to logistics-related issues. Thus, the environment, in which the entrepreneurship and the IT department can cooperate so that requirements could be located and controlled as demanded by the CORBIT system (“IT Governance: Developing a Successful Governance Strategy” par. 2), can be created.

In addition, seeing that CORBIT will take the firm to the next level of information management, it will be essential that the issue of information security should be addressed. There is no secret that cybercrime rates are very high in the realm of the contemporary global market (“Case Study” par. 4). Recent studies show that, despite the introduction of harsher penalties for the people stealing companies’ data, the threat persists and is getting increasingly high, especially with the development of the so-called crypto viruses (“ Ransomware’ a Growing Threat to Small Businesses” par. 2). Therefore, the design of an elaborate strategy aimed at preventing the instances of security breaches in the organization must be viewed as the next reasonable step to take. Once the IT processes are secured, the governance process can be executed successfully.

Works Cited

ISACA 2015, Developing a Governance Framework for the global support organization at GlaxoSmithKline, Using COBIT. Web.

IT Governance: Developing a successful governance strategy 2005, Web.

Lami, Ivan. Analytical Decision-Making Methods for Evaluating Sustainable Transport in European Corridors. New York, NY: Springer, 2014. Print.

2016, Web.

The Nestlé Management and Leadership Principles 2015, Web.

2015, Web.

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IvyPanda. (2020, July 27). Nestle Company's IT Governance and Decision Making. Retrieved from https://ivypanda.com/essays/nestle-companys-it-governance-and-decision-making/

Work Cited

"Nestle Company's IT Governance and Decision Making." IvyPanda, 27 July 2020, ivypanda.com/essays/nestle-companys-it-governance-and-decision-making/.

1. IvyPanda. "Nestle Company's IT Governance and Decision Making." July 27, 2020. https://ivypanda.com/essays/nestle-companys-it-governance-and-decision-making/.


Bibliography


IvyPanda. "Nestle Company's IT Governance and Decision Making." July 27, 2020. https://ivypanda.com/essays/nestle-companys-it-governance-and-decision-making/.

References

IvyPanda. 2020. "Nestle Company's IT Governance and Decision Making." July 27, 2020. https://ivypanda.com/essays/nestle-companys-it-governance-and-decision-making/.

References

IvyPanda. (2020) 'Nestle Company's IT Governance and Decision Making'. 27 July.

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