We define information technology (IT) to include not only computer technology (hardware and software) for processing and storing information, but also communications technology for transmitting information. Advances in computer and communications technologies have enabled firms to pursue IT investments. This will help them to gain maximum advantage from their knowledge assets-to leverage the knowledge of individual employees to the benefit of other employees and the organization as a whole.
Businesses have strived to achieve a competitive advantage in the past by competing in one of two ways:
1. By Cost- by being a low-cost producer of a good and service
2. By Differentiation of a product or service- by competing on customer perceptions of product quality and customer support services.
Information technology is an integral part of many companies day to day operations. By the 1990’s, applications of IT were widespread and sophisticated enough to enable firms to compete in other innovative ways. Whereas in the past firms had to choose between a low-cost and a differentiation strategy, today IT enables firms in some industries to compete on both low cost and product differentiation simultaneously. Further, some firms are attempting to compete not only on both low cost and high quality, but also on the ability to make highly varied customized products. Referred to as “mass customization,” IT is used to rapidly link processes and work groups in order to produce customized products that are exactly what a customer wants.
Evans Consoles, a Calgary based manufacturing firm, is a prime example of how, and where information technology is implemented and utilized in terms of strategic advantage and strategic plans. Founded in 1980, Evans is recognized worldwide for its expertise in the design and manufacture of technical furniture, desks and computer consoles for specialized environments such as data and control centers, trading floors, command centers, computer floors and other technology-intensive work centers.
Over the years, Evans has built an international reputation for reliable project management, innovative product design and superior quality through more than 2,000 high-profile installation’s. Such high profile installations include customers as NASA, FedEx, EDS, AT&T, IBM, Dow Chemical, Shell, United Airlines, FAA, and Deutsche Telekom. (See photo exhibits for examples of products and installs)
Evans overall corporate strategy is to provide high quality customized products at a competitive price to customers all around the world. As a part of this, IT has been implemented in order to facilitate the efficiency and effectiveness of the organization.
With Evans corporate divisions and processing plants being dispersed over 4 locations around Calgary, IT has become a necessity.
Information technology can be aligned with Evans’ corporate strategic plans from the first to the final step/process. To begin with, the majority of Evans existing or new clients are on a global scale and communication is vital since the products being built are on a custom basis. Evans need to stay in constant contact in order to build a rapport and ensure that what they are building is satisfactory for the customers needs.
This is where the use of e-mail and video conferencing comes into play. Evans has the ability to communicate globally with little effort or cost. This can also help increase global sales and help Evans become the global leader.
Being able to reduce travel costs saves Evans and its customer a great deal of time and money, and in turn enables them to produce the desired product within less time.
When the projects are ordered, either FAX or e-mail depending on the size of the project receives them. This saves both the client and Evans money and time for shipping of blueprints. Plus, if there are any discrepancies or misunderstanding, it is a simple and painless procedure to rectify the situation because of the fast means in communicating and sending documents electronically.
Communication is a large part of Evans IT strategic advantage. Most customers demands are on a time basis and Evans needs to fulfill these wishes to their best fashion. In doing so, Evans as a company needs to be able to communicate at high speeds so no process is held up. This would be the purpose of the Evans office automation.
There are five steps involved with automation; the first is making sure that everything is coordinated. The various islands of automation must be made compatible. The second step puts emphasis on the on the information requirements- as in the problems being solved. Using an Intranet and a Local Area Network (LAN) connected to several hubs for each corporate location, Evans is well equipped to internally pass information along at high speeds. Applications such as electronic mail, video conferencing, word processing, spreadsheet documents, voice mail, along with document preparation, storage, and sharing are all available to employees over these systems.
Electronic data interchange has been implemented in the IT structure to allow Evans with quick and easy transfer of business documentation electronically, without manual intervention. Such paper documents as purchase orders, order acknowledgements, requests for quotations, quotes, shipping notices are now done over the computer to alleviate both time and distance. Evans incorporated such a system into their IT strategic advantage for the following reasons.
1. For faster speed of doing business. Business data is sent, received, evaluated, and processed in a fraction of the time normally associated with business processes.
2. Reduction in required working capital. Reductions in resource commitments for both inventory and accounts receivable yield improvements in working capital.
3. Cost savings. Purchase order processing costs are one key source of cost savings. Some of these costs savings are due to the elimination of data entry errors that result from the re keying of data as they pass from organization to organization.
4. Improved customer/supplier relationships. Firms are increasingly dependent on each other to achieve competitive advantage, and EDI creates partnerships between customers and suppliers and other strategic partners. EDI is often the first IT link between business partners and can form the beginning of a new kind of buyer/customer relationship.
5. Enables international trade. The primary benefits for Evans here are related to international communications networks eliminating delays in paper flows and the transit of goods and information due to geographic and national boundaries.
The third step to automation is the training and education of employees. Evans offers on site training or the possibility to take courses at their expense. Since technology is so widely used in the organization, it is imperative that each employee be able to function at the same level, so not to slow any process down. In looking at the last two steps, evolution and redefinition, this can only take place as time goes on for Evans. It is inevitable that new ways of communicating and sharing date will be available, and it is up to the IS division to see whether or not it will fit within their IS and corporate strategy.
Processing, designing, and building also play a major role in IS strategic plan and advantage for Evans. With technology, Evans has found ways to improve the quality, performance, and look of their products. In doing so, they have attracted new clientele that has resulted in some major contracts such as NASA!!!
Evans engineering departments, depending on the style of product that the client desires, plays a significant role in the planning and designing of the product. Engineers use both Computer Aided Design (CAD) programs along with visual imaging software in order to meet desired designs of the customers. The use of CAD programs at Evans enables them to analyze and investigate a wider range of design alternatives. CAD’s also help to produce top quality specs with a minimal amount of time or money spent.
These are the purposes of Evans strategic plan and advantage. By using the visual imaging software, the client also has the opportunity to view the final product without having invested all of its time and capital. This is part of Evans strategic advantage in that they try to keep a high profile with their customers. Since all of Evans engineering and designing departments are not in the same building, the use of LAN’s is a viable way to ensure speedy communication and confirmation of the client’s orders.
Yet another part of the Evans strategic advantage with the use of IT is their production machinery that rely on CAD blueprints. These machines, that cut and mold the products according to the specs of the design, use blueprint data as a guide or a map of what to do. This ensures flawless precision that is important in developing a high quality product, gaining a favorable reputation, and keeping customers happy. Their machines also fit within the strategy as they reduce the amount of waste and time necessary for each product. This creates faster turnover time that in turn generates greater sales and revenue because of the ability of Evans to handle more clientele.
These machines are tied into the Manufacturing resource planning (MRP) system that Evans has installed. Comprised of three major components; the master production schedule, material requirements planning, and shop floor control, this system enables Evans to increase efficiency and overall effectiveness. The master production schedule component sets overall production goals based on due dates and size of project. The MRP component then develops a detailed production schedule to accomplish the master schedule, using production capacity, inventory, and lead-time data.
The shop floor control component releases orders to the shop floor based on the detailed production schedule and the actual production accomplished thus far. It is at this point that the blueprinted information of the business is passed along to the employees who enter it into the machines for production purposes. Each unit is then put together by hand but can be checked according to data specs and read outs.
Data warehousing is another part of the Evans IT strategic plan. Within this system, Evans enters and records information concerning all areas of each individual project. Such things as materials used, processing time, time allocated for each step, employee time allocated, and which division of the production was being used are all monitored. All this is done and entered in IBM’s Oracle software.
Within this system, the user can produce customized reports from the data warehouse to fit what managers need. At Evans, this is done on a weekly basis in order to verify the time and money invested in each project and to ensure that they are not over budget or running behind. This is a key component to the IT advantage in that it helps managers manage each project individually without loosing track of any specific detail.
Executive information systems are systems that deliver on-line current information about business conditions in an aggregate form easily accessible to senior executives and other managers. It is designed to be used directly by these managers without the assistance of intermediaries. EIS functions as a hands-on tool which focuses, filters, and organizes an executive’s information so they can make more effective use of it. At Evans, this information is accessible depending on the organizational position in which you sit because of password blocks.
It is part of their IT strategy because it allows users to examine data without having to ask for it, therefore alleviating time waste, and promoting management to act in the best of their division. Such things as performance analysis and management reporting are looked at and assessed from current to previous years. Other things that are brought into play are an alert to important news items, and on-screen calculation of trends, ratios, and new versions of data. With the use of charts, maps, or queries, the information can be viewed according to the preference of the user.