Aim of Case Study
The aim of this case study is to find that how Business Information system are used to generate profitability and efficiency in the organizations. In today world when the organizations are competing with each other neck to neck , Information system can act as a competitive advantage in business , although the information system are not competitive advantage in themselves , but they act as a catalyst in achieving various business advantage . Today's system like Enterprise Resource panning software stream line the working of the organization and introduce best practice in the organization. In this study we analyze Pine Country Resort located in the hills of Manali (India)
To prevent businesses from wandering apart, it is important to put into practice a Business Information System that will incorporate e-business and e-commerce operations to use the right technology to drive the business. This strategy is elaborated using a case study of Pine Country Resort.
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Pine Country Resort is a new comfort resort in Manali. Located near the bustling Mall Road, Pine Country overlooks the watercourse know as the river Beas , surrounded by pine and cedar trees , which offer you a grand escape into the breezing and peaceful valleys of the Himalayas. The ambience of this resort is one of the archetypal wooden cottages which are sprinkled into a community of its own. It is an ideal location for honeymoon couples, families and tourists, who will find it as the ultimate retreat for comfort and peace along with luxury.
There are a number of important issues which will be analyzed in this article, all of which try to find out the reason to go for IS system or not and how it is going to help the Pine Country Resort. And how the management of the resort ascertain, how they can employ a business information system also known as BIS by using strategic method to give them the competitive advantage over their rival or competitive businesses.
The method of enquiry in this case is the general discussion with the management through mail and the secondary research done on the internet to understand the business dynamics of the local market. With the ever increasing inflow of the tourists the operational effectiveness is causing problem for the management. The wide type of services and tour packages provided by the company and the logistics involved in them is creating problem for the Pine Country Resort and thus to improve the efficiency and effectiveness, the resort management decided to go for the enterprise resource planning (known as business information system) and thus to integrate various operations like booking, inbound and out bound supply chain management, payroll and human resource management system. ERP help to automate end to end business processes and thus broaden those processes to the entire production ecosystem, which include partners, customers and suppliers. Information System use to increase the employee's productivity and give them insights which are required to make business decisions that set the organization apart from other business and their competitors. Information system's function of transformation, automation and sharing common data across the organization help in the integration and effective decision making by the management and thus act as competitive advantage.
The case will study the various factors associated with the implementation and the advantage generated through the information system.
TASK 2: In this section we will try to do various studies and analysis using the general procedures of management analysis like SWOT and PESTL analysis to find the various environmental factors which are affecting the Pine Country Resort.
Strengths: The Company is well established and located in the hot tourist location of Manali, which is the main strength of the company.
- The Resort is open all year round, unlike many other hill location, thus they have an increased turnover.
- An adventure club has been made for the new generation and adventure tourists. Differential booking schemes have been placed, such as different tent pitch scheme, to attract customers in the slow season.
- The Resort has been granted permission to expand their business by building log cabins to improve their total annual revenue.
- The peak season for the business is when children have school holidays and summer season. The reason is lack of marketing about the adventure and winter sports, which may a possible disadvantage. Resort is open all year around, but is not creating profit all year round.
- Opportunity for the business is to sell souvenirs and local handicraft of himachal in the small shop that they have, which will increase sales and profitability of the company will also increase as the traditional items can bring good margins.
- The alliance with the adventure tour providers and international tour agencies can increase their profitability and can create business in the slow season also.
- The manual booking system is also creating problem and thus automated booking with the help of website can help
- The company does not have working website to promote the resort and thus creating website is also an opportunity.
- One threat outlined in the business is that it may lose customer details as they have a manual system.
- Lack of effective software control over inventory and supply chain often causes loss of inventory or shortage. Human errors are also causing loss and since the location of resort is in hilly area thus the inventory and supply chain management is main problem.
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Political: There is no obstacle in term of political issue in front of the Pine Country Resort.
Economic: Resort need to consider the factors like interest rates, inflation and possible trends. Also the initial investment required for the automation and the break even along with the ROI need to be justified with the help of the Cost-Benefit analysis, and ROI road map.
Sociological: Pine Resort need to analyze their target market's habits, wealth distribution and lifestyle, which may affect the current pricing.
Technological: Technological factors will permit the business to become more effective by using an online booking system and the website will allow them to communicate effectively with consumers and promote the resort. The online booking facility can be incorporated to increase the business revenues.
Legal: Legal factors are very important. Health and safety, employment, and competition laws should not be broken.
Environmental: Energy consumption levels and waste disposal which are connected to the natural environment should be taken care for . This will ensure the sustainability of the business.
Task 3: Analysis of IT Systems & Process
Implementation of hardware, software and communication is very essential for resort to gain a competitive advantage. A firm can only have advantage when it has the facility to protect itself against competitive forces and has the potential to secure its consumers. This can be achieved by providing the consumers of resort with fine and superior services at a lower cost and by using differentiation to provide improved services so that customers believe that it's worth a premium price. Thus, in order to accomplish its objectives, the utilization of the management philosophy such as the six C's concept, competitive strategies and a tactical opportunities matrix is important.
Software Technologies: Resort requires variety of software technology in order to improve their competitive advantage all over the business. The different types of software that resort could accept are ERP systems like SAP, Oracle or others. ERP permits a firm's functional units to converse directly with each other and thus brining outcomes that are quite valuable to the firms overall process. If information system only streamlines tasks, manage data and changes the procedures which people use to do their work, it is unlikely to provide long term competitive advantage. To promote a constant competitive advantage, firms must be able to use ERP in distinct ways or in ways that allow the firm to achieve unique outcomes. Firms that have environment that best suit ERP system implementation in terms of culture, structure, and process can achieve long term strategic advantage from implementing the ERP
Value Chain Analysis
Inbound logistics: This operation takes time and disrupts the administration of day to day work and mistakes can be easily made. Resort orders its products through manual system which can be replaced to automation by using ERP system and monitoring can also be done with the trend analysis.
Operations: The operation is basic, involving providing good service to its clientele. Which includes providing the tents and rooms for people to stay in, guided tours, and offering the information. The basic hospitality facilities are provided like food services, cleaning, room services and taxi services.
Outbound logistics: It consists of the service provided to the clientele. It involve the tour packages , rafting and other adventure sport services including tracking and mountain climbing, For this purpose the services are outsourced . The ticket booking and all other value added services are also outsourced.
Sales and marketing: Resort does not advertise much, which is an issue because to increase sales, marketing is essential. The business is good in peak season when the possession rates an average of 97%. But in the dry seasons, they need to promote to show that they are open all year round and best packages are there during this time. To increase revenue, resort should focus on winter season sports to attract new clientele.
Resort currently works with an old method where all sales are written manually in a ledger. They need to upgrade and install an ERP, which will save time and documents can be backed up and filed away automatically. The sale team could focus on the website. This will be valuable as it will advertise new events and attract new customers.
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Task 4: The analysis is done on the basis of different management methods to find the effectiveness of proposed system.Six C is a concept that is used by companies when implementing or determining the implementation of an information system.
- Cost Reduction: It is the key driver for the introduction of new systems here we can say that by the introduction of information system the total cost of procurement and management will be reduced as the cost of error and losses due to incorrect inventory can be reduced. The manual labor involved in the process can be removed.
- Capability: The information system will provide a new ability to achieve something that has not before been possible as the ease of operation with best management practices can be implemented. The IS will bring the best hospitability and supply chain management practices with it.
- Communication: Important aim of a e-business is improving intranet-based internal communication between departments and external communication with customers, suppliers and other partners which can be achieved through the ERP System.
- Customer Service: They can be improved by implementing "customer-facing" systems and online reservation facility and thus they can be directly used by the customers. Various value added service like taxi booking can also be introduced.
- Control: Monitoring can be enhanced through better information delivery for management and various alarms can be implemented for critical events. A sales manager can have weekly reports on the performance of sales force has better position to exercise control. The trend analysis will help in better planning and utilization of the resources by decreasing the gaps and helping in planning and budgeting.
- Competitive Advantage: Since information system gives Pine country resort; the edge over its competitor by the benefits above, a competitive advantage is achieved.
After pine resort adopts the accounting system, it would help in keeping a high level of control with ERP accounting module. A website would be a major advantage to Pine Resort, since a website would save cost on staff. If they introduce online booking, it would save time for clientele and money as well as help clientele to book in advance. The website can be easily assessed and updated immediately for the new events and promotion. This will mean less public calling for bookings or to question because all the information will be available on the website. Online booking is normally available all day, so resort will be able to accept bookings at all time which also saves time and money and act as competitive advantage. Website would help possible clientele to get an idea of what the resort services are , and the feedback on the website will help in building brand of the company. Resort can also implement HRMS i.e. Human resource management system and it will be beneficial to both employee and the management for better working environment. It will help in better planning of the work force. Thus it can be inferred from the case that the Information System will help the Pine Country Resort in achieving competitive advantage by making it more efficient.
- Mike Newman(2008).ERP Systems and competitive advantage:University of Agder
- Amol Gore(2008).Exploring competitive advantage through ERP System.University of OULU