Information System Of Aalsmeer Flower Auction Business Essay

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Aalsmeer Flower Auction is located in Netherland, offers a central marketplace for the global growers, wholesalers and exporters of the flowers and plants. There are new developments in auction market which threat the comfortable position of the Aalsmeer Flower Auction (AFA) in market because alternative flower market is driven electronically. Retailers ask the Aalsmeer Flower Auction (AFA) to refresh the products and provide more verities. They too ask for the multiple deliveries and smaller quantities for every week. Size and power are increased due to merger and acquisition among the retailers. Netherland also become the center for the pricing, packaging and other needs of the flower market. It is known that Aalsmeer Flower Auction (AFA) has a great strength to defeat these hurdles after studying the case. It requires the restructuring of the organization by making alliance with other market. These changes and new developments have forced the Aalsmeer Flower Auction (AFA) to reach them in a way to sustain its business. In this paper the information requirements of the board and putting forward new information system and strategies for its business. New appropriate methods to develop the information system are used to develop the new system according to requirements changes in flower market. Effectives of this new system for employees of Aalsmeer Flower Auction (AFA) and end users also will be focused.

2.0 Information System

Most organizations use the information technology and information systems to carry out their business electronically and accomplishing the new efficiency levels, profitability and competitiveness. Information technology is used as a tool by the managers at the different levels for decision making and tactical support. It does not only refer to the dogma of technology but it provides the principles for its management and implementation. It ensures the cost reduction by the providing the reach for-off locations; offering the new products and services' changing the ways of operation and workflow and restructuring the jobs.

Distribution and cut flower distribution are very successful sectors of the Dutch economy (Haak, et al., 1992). This flower industry consists of more than eleventh thousands growers and nearly 5000 buyers. Growers are facing many challenges in a competitive environment where as growers in Kenya, Israel, Spain, Colombia and India are paying lower labor costs, low trade tariffs and cheaper air transport charges. In response of these changes growers are shifting to work as buyers. Buyers and sellers face many uncertainties when they trade the goods. These uncertainties have arisen due to inability to forecast the future predictions (Williamson, 1985).

2.1 Importance of IT: Firms activities are assisted by the identification and development ways in form of machines, software and other form of technologies. Due to continuous development in IT the companies are enabled to face the challenges of competition. Competition is affected by the ways of information provision and strategies affected by the competition (Curtis and Cobham , 2008). Cost of activities of each information component is reduced for example inventory record is updated by the use of inbound logistic activities as IT provides the information on receiving the goods.

2.2 Financial Planning: Information technology is used to gather the information depending upon firm's activities to generate the forecasts and predicting the future performance. Specific customer needs are increased by the product differentiation in effective use of IT.

3.0 More Valued Chain Model: A value chain model is more effective in business when information systems have strategic impacts and competitive strategies are best applied (Porter, 1985). Companies use the information technology to achieve the competitive advantage by identifying the specific leverage points. It is clear in this case that support activities at Aalsmeer were affected by outsourcing the IT to IBM. Porter has identified that to manage the linkage and perform the particular activities is the main source of competitive advantage.

AFA needs the value chain to be redefined in the organization. When the new system is invented the non valued added chains are removed and new value added activities are added into the organization. The reduction of transaction cost is main objective of new developed system as the activities like pushing the flowers cart around the auction are not so much beneficial.

Figure1: Industry Value Chain

3.1 Management effectiveness: In the organization the management is responsible to make the decisions because the now the auction facilities are available through the e-commerce as communication and electronic connections are set up already. Now the information will flow directly from the buyer to seller very easily.

3.2 Staff effectiveness: It is known that people in an organization are the main elements and make the differentiation between the success and failure of the firms. For the AFA people employed need the knowledge to use the new Information System. Information System Personnel are those who manage, run and maintain the systems. As the new Information system is implemented in the AFA so staff must have the required knowledge to operate the system. The staff employed at AFA must be competent who can run the system perfectly.

3.3 Exchange organization analysis

Convergence of IT and telecommunication, availability and proliferation that amount the data transmitted from the sites. The impacts of the electronic market are rapidly increasing and its effectiveness depends upon its design and make.

4.0 Information Systems and Organization's strategies: industry is composed of the firms and question arise that how and when the firms compete with other firms in the industry. Porter's five forces are used to analyze the strategies at industry level. As the Aalsmeer has now reached at its global status and number of customers is multiplied. Company needs to keep the all information managed to sustain the financial portfolios, storage facilities and channels thoroughly. It will be done through the available outlets via electronic media. At the click of the button the e-trading services move and bring the buyers and sellers together. Being an IT consultant and having knowledge about the Information System: information system can improve the communication searches and reducing the transaction costs by monitoring and sorting the information capabilities. Purchasers get advantage of production economics which are available in the markets. With the development of Information System of AFA, it is not necessary to have a big space for transact flowers and flowers too do not need to be kept in AFA warehouse. Customer loyalty can be increased by the detailed information of flowers, current status and delivery dates. Switching to an Information System AFA will be able to study the trends in auction market; enabling the AFA to forecast and predict the most required varieties of flowers. For example Wall Mart has the information about the regions in countries; increasing the inventory level according to requirements and improving the profitability (Stair & Reynolds, 2010).

5.0 System Theory and Development: Business processes are analyzed and improved by the means of powerful system and theory. System theory is the study of the interactions within system. Organizational problems and opportunities are the main causes behind the development of Information systems. The distinct activities of system analysis, design, programming, testing, release and its maintenance provide the structural kind of problems solving techniques. For Aalsmeer Flower Auction there are many possible models which can be checked for the development of new information system at company. Water fall model is replaced by the SDLC model which was developed by the National Computing Center in UK in1996.

What is system theory? It describes the process as the normative systems structures. Proposed software at the AFA will keep the track record of its users and it will be stored in the form of the AFA's processes and procedures. AFA regards the knowledge management which is another form of system to be developed. Such kind of systems creates the knowledge for the system and delivering it to its appropriate users (Raymond & George, 2007).

6.0 Software Development Life Cycle: SDLC Model is recognized when system requirements and designs are determined and completed then commences the development phase. Additionally project management and change management inputs are more effectively used to ensure that project development is not by chance rather it is fully managed.

6.1 Phases of the SDLC Model: Software development needs a lot of work of planning, implementation and testing. A perfect system meets the requirements of the customer of AFA that is tested and passed the quality analysis. There are several SDLC models and each has its own process. For the development of software for the AFA following phases are there for development.

Analysis of software elements: This is stage where the evaluation of the current system is completed and deficiencies are identified. This phase also includes the interviewing of the customers and end users of the system.

Specifications: the system requirement are defined and written on the paper. Deficiencies addressed need the specific proposals of the clients.

Architecture of Software: It can be called as the designing phase which is presented to AFA and include the Physical construction, operating system, programming, security and communication along with the hardware.

Coding: Software engineers and programmers write the code and diagrams to develop the project.

Testing the Project: Code written for the project is tested and likely to be linked the codes written by the different programmers.

Documentation: User Manual of the system is presented with reference for the future maintenance and enhancements.

Training and support: the client is given training to use this project.

Maintenance: regular check of the system is provided and bugs are removed when the software is developed and implemented in the firm (Jeremy, 2008).

Figure 2: System Development Life Cycle

6.2 Strengths and Weaknesses of SDLC Model: The documentation of the system is helpful and ensuring that all specifications of system are completed after the testing of the system. Staff of the Aalsmeer Flower Auction is well trained to use the system. This methodology is used for the purposes to prevent the missed cutover dates , unexpected high costs, and its benefits lower than expected ask to review its progress. SDLC model is presented with different stages including such as the Feasibility study, Investigating, Analysis, implementation and review & maintenance. This model is well tested and tried in very efficient way. This model is selected to avoid the high costs and lower expected benefits. The performance of the system is evaluated at the completion of every phase.

To test the success of the Information System AFA the De Lone and Mc Clean Model (1992) is used and this concept relates to the surrounding for its success. Information System developed for the AFA identifies the system and information quality, use, user satisfaction, individual and organizational impacts.

System Quality


Organizational impact



Information Quality



Figure3: De Lone and Mc Clean Model

This model has proposed that information and system jointly have an effect on the use and user's satisfaction and affect the success and organizational impacts.

7.0 Effectiveness of Information System: System security and customer's privacy are the vital important for the Aalsmeer Flower Auction. The system developed for Aalsmeer Flower Auction can bring many useful changes for the organization. Several important steps are covered during the development of Information System. When service of this Information System is distributed to end users its advantages are seen with in short duration of time. However disruption in these services may produce loss of million dollars for Aalsmeer Flower Auction.

Success of the Information System must be ensured by placing the system control, auditing and security. Business managers and end users see the inputs and oversights for the data security and administrative control. Administrative control includes the written policies and procedure in a proper format for operations and responsibilities in a new developed Information System. At Aalsmeer Flower Auction the security of the electronic communication is a major issue. Transaction through internet needs the security and reliability. Developers of the Information System have met the concerns about heightened vulnerability of this automated system. These concerns are the security issues, administrative errors and other disasters. Backup facilities of the system must be ensured otherwise the IT manager will face a big problem of backup data. Aalsmeer Flower Auction like many other firms functions on daily basis and Information System must have the backup facilities. An uninterrupted power supply is needed for the system's continuous working. Mainframe application or client/server systems for backup are required. Information System at Aalsmeer Flower Auction is tested and audited comprehensively for its effectiveness. The flow of system is understood to trace the transaction routes and perform the related functions. Aalsmeer Flower Auction management required integration of business processes, planning and decision making at all levels (Van & Berend, 1999). Balanced scoreboard is used to translate the organizational strategies into its objectives; then providing the metrics to control the execution of such strategies. Information System at Aalsmeer Flower Auction will not only provide the framework for the business strategies but also measuring the performing drivers like employee's training and investment in technology.

Information system developed will give desired functionality in the organization. For the supply of the goods, maintenance of the record and schedule requires the Supply Chain Management as a part of the Information System. SCM is helpful to manage the business relations at AFA with suppliers. SCM will provide the source of the information to suppliers, purchasing and logistics companies. When this system is fully implemented companies deliver the goods and services with respect to ordering, production and inventory levels (Laudon & Laudon, 2009). The Information system developed for AFA will help the managers to organize, source and schedule the products resulting in making and moving the goods and lowering the cost.

8.0 Conclusion: In this paper the design and development of an Information System for the Aalsmeer Flower Auction is described. It is much focused that Information System must be designed through the incorporation of the methods, policies and procedures to control the environment in AFA. Special attention must be paid to new developed system for system life span. This paper has covered the all aspects of software development (Information System) for AFA. Software Development Life Cycle (SDLC) is best chosen methodology for the system development at AFA. Its strengths and weaknesses are presented with examples to explore the importance and appropriateness for business firms. General and application controls combine together for the development of this system. General controls apply to all computerized application and consisting of software, hardware and manual procedures. On the other hand application controls are used for transaction and other processing in an organization. It is believed that IT has lowered the coordination Costs and enhanced the communication abilities. In today's business environment thriving is most challenging than ever before. At AFA the time is of most essence. Therefore the use of IT sourcing is a great idea in any business environment.