IT and IS management is generally regarded as one of the key aspects of business performance. The management strategy, which is applied for managing the informational aspect of business, plays an important role in improving the competitive advantage of the company, as well as customer satisfaction, corporate productivity and profitability. The IS and IT management strategy, which is applied in Hewlett-Packard company is based on the principle of managing a joint hierarchical database, which presupposes the precise division of the IT and IS aspects for better control of the sphere. Moreover, IMS principles are applied considering the extensive transaction processing capacities, which are aimed at improving the actual importance of IT management in general, and granting the stable IT development of the company. The paper aims to analyze the strategic implications of information technology in this company over the next three years. IS management was selected as the key aspect of IT performance, and the sub-strategies, which will be applied, entail outsourcing, ASPs, Business Process Reengineering, ERP, Website Development, and application of GNU projects in informational activity of the company on the example of Linux.
Brief Background of the Company
The key principle of the IT and IS management strategy, which is applied by the IT management of HP company is based on the principle of joint management of various consoles. Thus, Linux, Unix and Windows operating systems are managed from a single console. Additionally, the IT management system, applied by HP management is designed to manage the platform of web services, offered by the company. However, the online services, offered b the company is developed and managed jointly with the partner of HP Company – German web developer SAP company. In general, the key principle of IT management strategy presupposes the production of IT products, comprising all the stages of IT management and software development: from creation to deletion of any project.
The innovative approach of IT management in HP company presupposes running of IT sphere similar to running business spheres of the company’s activity. This approach is aimed at improving the IT performance of the company in general. All the IT departments are subjected to regular certification, thus, the business approach of IT and are management is based on the constant qualification improvement and attestation of the workers. Additionally, Open View service desk software is used for managing documentation, which allows the company to implement improved documentation control functions, and the more effective work performance. This approach is mainly focused on performing help-desk tasks.
The key feature of the IT management strategy in HP Company is the adaptability of the tasks and approaches. As it is stated by Currie and Galliers (2008, p. 671):
Adaptive management breaks the cycle of endless maintenance costs, so CIOs (chief information officers) can once again invest in innovation. Management services like ITSM (IT Service Management) can help our customers create a lean, responsive IT operation, while management software provides the key to linking business processes and applications down into the raw hardware.
In the light of this statement, it should be emphasized that the adaptability of HP’s strategy is similar to the strategy of other companies, which aim to lower the costs of IT management, and create the utility-based service. In order to achieve the maximum performance effectiveness and minimize the costs of IT management, the company had to implement the principles of cooperation and outsourcing. As for cooperation, HP has cooperated products with Dell, and the joint IS management of these two companies is aimed at developing Microsoft-based software.
Current Business Issues
The business aspects of IS management in Hewlett-Packard Company are closely associated with the aspects of technological performance and improvement. In fact, the key matters of business issues are linked with cooperation, and outsourcing. In fact, the company had to implement the business process reengineering principles for improving the web services of the company, which are the key aspects of IS management. By Earl (20055, p. 141):
Information System Management is a planned system of the collecting, processing, storing, and disseminating data in the form of information needed to carry out the functions of management. In a way, it is a documented report of the activities that were planned and executed. A marketing information system consists of people, equipment, and procedures to gather, sort, analyze, evaluate, and distribute needed, timely, and accurate information to marketing decision-makers.
Hence, the business approaches, which are applied for the IT management strategy in HP Company are based on the matters of changing IT environment, and applying the principles, used in other companies. As for IS management in general, the scheme of decision-making is as follows:
In fact, this scheme is applied in HP – SAP cooperation, thus, these two companies have an opportunity to manage the IT environment of the business sphere.
Considering the principles of EPR, applied by HP Company, it should be emphasized that HP plans several acquisitions, in order to unite the IS and IT management efforts, and improve the experience exchange progress with other IT management teams.
The EPR principles, which are applied by the company are as follows:
- IS management system is integrated and operated in real-time
- All applications have direct access to a joint database to prevent redundant data
- All the modules are synchronized and have the same interface
- Managers have an opportunity to access any information in the database and the system as a whole
Additionally, the EPR system, applied by IT management team in HP Company is based on the standard business process, associated with application of standardized processes. In fact, it means that the company aims to improve the IT management system by applying standard principles, and adopting innovative approaches to the processes and tasks, which are regarded as innovative. Thus, by the research by Shi (2007), it should be emphasized that EPR project, applied in HP, requires thorough analysis of the implementation track. Additionally, the provided services should have better communication within the local area network. This improvement will allow the Company to assemble various modules of IT and IS management strategy into a single approach, as well as use the systems with the maximum effectiveness. Thus, as it is emphasized by Shi (2007, p. 281):
An ERP system either can reside on a centralized server or be distributed across modular hardware and software units that provide “services” and communicate on a local area network. The distributed design allows a business to assemble modules from different vendors without the need for the placement of multiple copies of complex, expensive computer systems in areas, which will not use their full capacity.
Therefore, the company needs skilled IT management teams in order o implement the EPR project effectively. However, the key aspects of IT management, applied by HP Company, fully correspond to the generally accepted EPR features, which are as follows:
- Selecting the approach
- Implementation planning
- Personnel training
- System Testing
- Project implementation
- Service delivery
Offered Solution for Further Improvement
In spite of the successful development of the IS management strategy, the company needs to improve the IT performance for more effective project development and cooperation with other companies, engaged in the joint IS management with Hewlett-Packard. The problems, which may be faced, are the extensive outsourcing of customer care tasks and communication, as well as weak involvement of human resources in the technological process of production manufacturing. On the one hand, this automation provides the opportunity for quicker production, on the other hand, there is no opportunity for better control. Thus, the strategic principles, which should be implemented, entail the necessity to control the customer care tasks accomplishment, improvement of business processes. The key requirement of the improvement is the necessity to relate the business processes with the costs and resources involved, thus, minimizing the rates of outsourced performance. Additionally, the redefinition of business process and reassessment of possible business risks for more effective accomplishment of the tasks will be required. Thus, the minimized outsourcing practices will provide the opportunity for better control of task accomplishment; however, it will initiate additional risks, associated with restructured resource allocation. Moreover, the reimplementation and upgrade of technical resources will be required. The improvement of the existing IS management strategy is regarded as controversial (Damare, 2008), as the necessity to decrease the outsourcing practices in IS management, which entail debugging and testing of HP software products, may worsen the quality management approaches. However, the key benefits of the offered recommendations are as follows:
- Improved financial accounting and financial reporting, caused by the restructured resource allocation and human resource management
- Opportunity of instant financial control is the key benefit of decreased outsourced performance
- The company will have an opportunity to improve accountability in general, and provide auditable accounting
- The IT costs will be essentially reduced, and the ERP solution will provide the opportunity for automatic upgrades
- The integrated process of financial control is more effective in comparison with the adopted financial division approach.
Thus, the company will have an opportunity to improve the ERP process, and implement the diversified financial control system by reallocating the human and financial resources. In accordance with Betz (2007, p. 145):
The process usually starts with a consultant studying the company’s business processes and making recommendations as to relevant features/integration required in the ERP application. The business then either has the ERP software written from scratch or – to save reinventing the wheel – uses large modules of standard ERP software with many custom modifications.
The three main forces, which will drive the company’s performance after the strategy reformation are:
- Evolution of information technologies in general, and the improvement of communication process within the company
- Globalization of markets, along with the increase of sales rates and improvement of customer care policies
- Development of advanced manufacturing and logistics technologies
These three driving forces of the strategic implications will improve the business performance of HP. However, it should be emphasized that actual importance of the recommended improvements is explained by the creation of competitive advantages on the market of software control systems. Thus, as Earl (2006, p. 311) emphasized in the research:
Every market-leading enterprise will have at least one core competency – that is, a function they perform better than their competition. By building an exceptional management information system into the enterprise it is possible to push out ahead of the competition. MIS systems provide the tools necessary to gain a better understanding of the market as well as a better understanding of the enterprise itself.
Recommendations for the Executive Committee
The recommendations for the executive team will be closely associated with the necessity to improve the communications with customers, and decrease the IT costs and expenses. The former recommendation will be executed by the website development, the latter – by using GNU projects, and free operational systems, such as Linux and other Unix-based OS. It should be emphasized that considering the importance of communication with customers, and users of online products, the website development will improve the communicational process, as well as decrease the necessity to implement the outsourcing principles of business performance. On the other hand, website development is closely associated with the importance of the improved brand positioning, as customers and target audience require constant reminding of the brand’s existence. Thus, it may be joined with the rebranding and promotion strategies. As for the aspects of strategic implications in the sphere of IT management, actual importance of website development may be explained by the improved communication with suppliers and customers. (Betz, 2007)
As for decreasing the IT costs, use of free OS is one of the most widely spread solutions. In fact, Linux and Unix-based operating systems are free, and the aspects of network security will minimize the risks associated with virus attacks and data losses. Thus, using Linux systems will help improve the IT security aspects of IS management, and decrease the costs, associated with IT security, licenses for operational systems and necessity to adapt the equipment for various systems, as Unix based systems can operate with Windows file systems, while Windows is not able to operate with nix. Consequently, the IT management strategy will be simplified essentially. In fact, this recommendation should be implemented with the thorough consideration of personnel qualification, as Linux is more complicated in operation and adjustment, thus, the skills of the team should correspond to this step.
Finally, it should be emphasized that strategic implications in the sphere of IS management within the HP company should be regarded from the perspective of a globalized economy, and the necessity to improve the communication process with customers. Originally, the outsourcing strategies are aimed at improving this communication, on the other hand, the refusal from these strategies may provide an opportunity for better financial control. Better financial control will help to reduce the IT costs and expenses, associated with customer care policies. Moreover, the company needs to restructure the IT management system by using GNU projects and free operational systems.
- Betz, F. (2007). Executive Strategy: Strategic Management and Information Technology. New York: John Wiley & Sons.
- Currie, W. & Galliers, B. (Eds.). (2008). Rethinking Management Information Systems: An Interdisciplinary Perspective. Oxford: Oxford University Press.
- Damare, B. (2008). Workplace Learning to Improve IT Project Management: The Los Angeles County Department of Mental Health Uses Integrated, Strategic Training to Mature Its IT Management. The Public Manager, 37(4), 45
- Earl, M. (Ed.). (2006). Information Management: The Strategic Dimension. Oxford: Clarendon Press.
- Earl, M. J. (Ed.). (2005). Information Management: The Organizational Dimension. Oxford: Oxford University Press.
- Shi, W. (2007). Introduction: Public Information System Management and Information Policy. International Journal of Public Administration, 25(5), 589