P31164 Information Technology and Strategic
Management
Question 1
Challenges and Initiatives of UCB
UCB group is one of the largest companies in Belgium founded in 1928. In order to rule the worldwide business industry, the company has started focusing on certain products, which have high value in the market. In order to enhance business performance, the UCB group has taken many significant initiatives regarding the development of the IT system. However, the company has also faced multiple challenges in the process of business development.
One of the most successful initiatives of the UCB group is to standardize the desktop environment. A companywide standard hardware and software system has been implemented by the organization. Besides, In order to enhance the contract and data negotiation process, the company has given the responsibility to Michel Hautfenne.
His cost-efficient tactics have helped the company to secure 2.7 million Euros of annual savings. The company has also developed a new data center o ensure the data and physical security. There are multiple benefits of the new computer room such as data integrity in the time of catastrophic failure, mirrored servers, and redundant electricity.
In order to maximize the benefit of PeopleSoft initiative, Amy Barrett has been appointed as the director of corporate HR in 1997. Further, development of a baseline for the security policy of UCB is also a key initiative for IT development (Case Study). The list of security requirement of the company has been identified based on ISO 17799 Codes and ISO 13335 Guidelines of ISO (International Organization of Standardization).
Despite taking multiple initiatives, UCB has faced certain challenges that have affected its business development process. A key challenge for the company is the fluctuation in the market trends such as pricing and industrial activities. The fluctuation of prices of raw materials has affected the profitability of the company. Fluctuation in the worldwide industrial activities has also affected the profit margin of the company.
The instability in the international market has forced the company to develop innovative strategies (Case Study). Besides this, staff turnover has become a serious challenge that affecting the business development of the company. Different perspective regarding the guidance of quality assurance and job roles is a remaining challenge of the company. IT/IS system would be helpful for supporting the management team to deal with the issues.
Ineffective information technology is also a crucial challenge for the company that influencing the drug development process. Due to the lack of efficiency in information technology, UCB is unable to get enough information to develop a product. Issues with research computing are one of the biggest challenges faced by the company.
The IT director of the company has faced challenges regarding the management of responsibilities in research computing. The entire responsibility of internal job management has influenced the close corporation. It has created loopholes in the management system.
The details of the essential initiatives and challenges of the UCB group are briefly discussed in the below table.
| Essential Initiatives of UCB groups | Challenges faced by the UCB group |
|
Ø Standardization of hardware and software system Ø Cost efficient tactics made by Michel Hautfenne Ø Development of new data center Ø Appointment of Amy Barrett for improving PeopleSoft initiative Ø Development of baseline for data security is an important IT development initiative |
Ø Fluctuation of product price and activities in the business world Ø Issues with staff turnover Ø Ineffective IT/IS system of the company Ø Issues of responsibility management board of directors in research computer |
Table 1: Successful Initiatives and Challenges for UCB group
(Source: Learner)
Maturity Audit Framework
Audit Maturity Model (AMM) is an effective maturity audit framework, which is essential for the UCB group to assess the review processes and maturity audit regarding the capability of auditing and suggestion for achieving a higher level of maturity. The maturity auditing is done in five different levels namely Initial, Management, Compliant, Matured, and Optimizing (Domingues et al. 2016). Based on the level of AMM, assessment of the maturity audit of the UCB group is going to be done in this study.
The maturity model has been chosen for the project as it will help the organization to assess the present processes and development of effective implementation strategy for potential capabilities.
Figure 1: AMM Framework
(Source: DeSimone et al. 2016)
| No. | Capabilities | Level of Maturity | Actions | Rating (%) |
| 1 | The process of designing and building | Initial | Development of Implementation plan for IT infrastructure | 95% |
| 2 | Development of plan and gathering requirements | Managed | Development of implementation plan for network infrastructure | 60% |
| 3 | Risk management measures and development of technical solutions | Compliant | Development of policies regarding the new computer center, help desk, and security | 100% |
| 4 | Management of internal procedures | Matured | Development of organization-wide desktop environment and email-based communication medium | 75% |
| 5 | Analysis of Innovation and Research & Development | Optimizing | Introduction of hiring method based on emails. Investment of Research and Development department | 70% |
Table 2: Maturity Audit of UCB
(Source: Learner)
In the above table, capabilities of the company has been divided into five different categories namely designing and building process, plan development and requirement gathering, risk management measures, internal process management and R&D. Each of the capabilities of the company is further divided based on its level of maturity. Designing and building process falls under the initial level of maturity based on the AMM framework.
In order to bring the best from the capability, it is important for the company to develop an implementation plan for infrastructure IT system. Plan development and requirement gathering is under the management level of maturity.
Best of this capability can be achieved by developing implementation plan for network infrastructure. Risk management measures have been considered as the compliant level of maturity, which requires policy development regarding new computer center, helpdesk and security. Internal process management is the part of matures level of maturity in the present analysis.
It requires the development of email based communication medium and organization wide desktop environment. Finally, R&D has been chosen as optimizing level of maturity, which needs to enhance by the introduction of email, based hiring method.
Question 2
Challenges regarding the Cost Pyramid
One of the biggest challenges faced by the management of UCB is the decline in the profit margin. As mentioned in the Case Study, the fluctuation of the prices of raw materials is the root cause behind the issues of profit margin. It has also affected by the influence of the fluctuation of industrial activities around the world. The impact of the fluctuation of raw materials and industrial activities directly affected the level of transformation of the cost pyramid of the company. As discussed by Choudhury (2017),
the profit margin is the most essential aspect of the financial development of a company. A significant amount of investment of the company has allocated for the business transformation process. It has been found from the cost pyramid that the company has invested 10% of its total budget for business transformation. However, the fluctuation in the international market could have become a potential challenge for the company regarding business transformation. The creative value of UCB could have also affected by the impact of fluctuation of activities and prices.
The value creation of the company has also been affected by the introduction of close corporation measurements. At the initial level, it becomes a key challenge for the employees to adjust. Besides, the decision-making ability of the management team has also affected by the process.
As suggested by Danguy (2016), in order to ensure the success of the business, it is important for a company to focus on staff turnover. It is considered as a major factor that measures the efficiency of human resource management and management of overall activities of an organization. Besides,
the loopholes in the management process could have destroyed the business transformation process of the company. As cited by Ferreira et al. (2016), the management of the company should identify major loopholes to prevent failure of business transformation. Any kind of negligence in the process may lead to business failure.
The pyramid of cost has suggested that 6% of the total investment has been allocated for the Information System, Decision Support System, and Knowledge Management System (Case Study). The success and growth of a business rely on these factors of an organization. However, an ineffective information technology system could have destroyed the product development process of the company. According to Ferreira et al. (2017),
the IT system gathers a significant amount of data from the international market, which is essential for operation management. On the contrary, it also helps provide the required information to companies to develop innovative products and services. The lack of efficiency of the information system of UCB could have been problematic for the company.
Contribution to Innovation or Globalization
Globalization is considered the most important aspect that changed the face of business activities around the world. Allowing the companies to engage in activities in foreign countries, globalization has given birth to innovation. As mentioned by Jabbouri et al. (2016), globalization has helped the companies of different companies to share their knowledge and skills with each other. Based on the knowledge sharing process,
the innovation of multinational companies is increasing. Innovation or globalization is crucial for any company to gain a good position in the international marketplace. However, as per the studies of JosephNg (2018), the innovation of companies is dependent upon the research and development process of a company. A company experiences growth and success in a foreign market based on the coupling of innovation and globalization.
The impact of innovation can be seen in the management process of the UCB group. In order to ensure the efficiency of the internal and external business processes, the company has separated the business in three different segments namely, Pharmacy, Chemicals, and Films. The focus of each of the segments of the company is on innovation to ensure business development in the international market. The innovation and creativity of the company have been increased with the help of the IT/IS system.
In the early 2000s, the IT/IS system was extremely popular in the business world. Therefore, the company tried to improve its business development process focusing on information technology. It played an important role in gathering crucial data and information to develop innovative products and services as per the needs and demands of customers. In the case study of UCB, the use of innovation can be seen in IT infrastructure development, which was planned to become a key leader in the international market. The innovation of the company can also be seen in the development of a central computer room, email-based communication, help desk support.
Likely efforts in terms of Time and Money
| Remaining Challenges | Required Efforts | Money | Time |
| Issues with Staff Turn Over | Development effective HR policies with the help of IT/IS system | $ 3500 | 6 months |
| Issues of research computing | Identify of the major issues of UCB. The research computing can be improved with the help of training | $ 3000 | 2 months |
| Inefficient IT service | It is important to provide training related to IT/IS services | $ 5000 | 3 months |
| Fluctuation of prices of raw materials | Introducing cost control policies in the organization | Variable | Variable |
Table 3: Challenge Analysis
(Source: Learner)
It can be understood from the above table that five mentioned challenges of the company require to be handled by essential efforts. In order to overcome challenges of staff turnover can be overcome with the help of HR polices supported by IT system. Besides this, issues with research computing required to be identified and handled accordingly. The company is also facing challenges regarding IT service. In order to deal with the issues, it is important to provide necessary training to the staff. Moreover, cost control policies required to be handled to overcome the challenges of fluctuation of price.
Question 3
Cost optimization is a business-oriented process that focuses on the reduction of cost and develops disciplined spending. According to the studies by Klinkenberg-Ramirez et al. (2016), it prioritizes the best terms of business purchases and pricing policies to ensure business development. According to the Case Study, Vincent Damien has expressed that the focus of the cost pyramid of UCB is on optimized cost. Using cost-effective measures, the company has tried to enhance business profitability.
However, the needs and demands of the international business environment have changed drastically. Globalization and innovation have started influencing the business strategies of internal businesses. As suggested by Abrol et al. (2017), in the era of globalization, innovation has become the driving force of the international business. Therefore, most of the companies are adopting innovation and creativity as the most essential tool for enhancing the business development process.
However, innovation and value creation was not the priority of the UCD until the recruitment of Vincent Damien. Damien has found that cost-effective measurement is no more a crucial strategy to improve business activities. The company has divided into three different segments that can be controlled with the help of a cost optimization process.
He understood the need for innovation in terms of the IT/IS system for business development. Based on the understanding of the market trends and business requirements, it is important to acknowledge that Damien has correctly identified the requirement of information technology for the value creation of the company. As cited by Misik et al. (2017), the IT/IS system is essential for managing operational activities and manufacturing innovative products and services based on current market trends.
However, it is undeniable that a significant amount of risk is associated with IT system implementation.
One of the biggest issues that is faced by IT/IS system is security of data and network. The risk of data hacking has become challenging for small and big companions (Putra and Setiawan, 2020). The issues of data backup also cause negative impact on the operations of an organization. Apart for this, failure of software and hardware has become a common problem of IT/IS system.
However, as the companies have divided into three different segments of three different industries, it is important to include the IT system in the business operations. The urgency of inclusion of the IT system has identified by Vincent Damien for value creation and increasing the profit margin. Due to the absence of an IT system, a complication in the management process was increasing in the company. One the other hand, the handwork of the employees was going into vain.
Therefore, it can be said that Damien has done a great job by preferring value creation to optimized cost. Based on the above discussion, it can be said that value creation using innovation and creativity is essential in the present business world.
Therefore, it cannot be agreed with that statement that IT does not matter. According to the studies of Zaitseva et al. (2016), IT is the key component for increasing innovation of a company, which eventually leads to value creation. IT services help an organization to provide a high quality of services to clients and customers. Therefore, investment of a significant amount of money in the IT system is crucial for UCB, keeping present and future perspectives in mind. Inclusion of IT system supports and organization to build agility and smoothness in the operation processes.
A large number of employees were associated with the different subsidiaries of the company; therefore, the IT system would be helpful for managing them in an efficient way. The internal communication of a company is improved with the help of information technology services. Based on the mediums of communication such as intranet and internet, the interaction between the employees improves (Memon et al. 2016).
It also develops effective communication between the management departments of an organization. Therefore, identifying the needs of IT services, Damien has increased the potential of UCB to improve their internal and external activities. It can be concluded from the above discussion, the selection of an IT system for business development is a path breaking for the company.
Question 4
The in the budget plan of 2002 of UCB has included a range of different activities including 3R Portal, Knowledge Management, Extended Enterprise for Chemicals, Chemicals IT/IS, Transformation of Chemicals Sales, Validation Project, Transformation of Pharma Sales and Research Software Management for Pharma. 3R portal has been selected in the activities to ensure the smooth flow of information in different departments of the organization. At that time, the data-sharing system was not advanced;
hence, 3R Portal was selected. However, in the present times, the emergence of an advanced IT system has made the process of sharing information system easier than ever. In the present scenario, the Knowledge Management Information System (KMIS) would be a more effective tool for not only developing effective communication but also ensuring the security of important information and data (Benedicto et al. 2017). As cited by Raadabadi et al. (2018), the decision-making ability, knowledge sharing and communication among employees can be improved with the help of KMIS.
Therefore, MIS would have been selected instead of 3R Portal in the present scenario. In order to improve knowledge management practices and an advanced Knowledge Management System (KMS) would have been enlisted in the budget. Knowledge Management System has become a crucial aspect in the current business world to gain a competitive advantage. Using KMS, companies develop effective business strategies based on the information of present business trends and market demands (Santoro et al. 2018).
It also helps an organization to share knowledge and ideas with employees of working around the globe. As UCB’s business has divided into three segments, KMS would have been helpful for developing communication between employees of Pharma, Chemicals, and Films (Wang and Wang, 2018).
In order to authorize certain chemicals and drugs for research and development, UCB has added Validation Project in the budget list. However, in the present times, there are better options such as Two-Factor authorization is available for improving documentation and validation of projects (Cote et al. 2018). Apart from this, the customer support system would have changed to improve the value creation of the company.
As cited by Daniels et al. (2018). AI (Artificial Technology) is the future of technology department of companies around the world. AI technology has the potential to improve the customer service with the help of AI augmented email tagging and messaging. It is also necessary for addressing the queries of customer through chat bot assistance.
Question 5
Budget Plan with the committee
Most of the important activities that are connected with the budget plan would have encompassed efficient IT measures as well as its incorporation in the architecture of the company.
According to the case study, almost 30% of the allocated budget of the company is necessary for the strategic implementation of such extensive infrastructure of IT and all the related activities associated with it. The following list is being represented in this study to provide detailed activities and the expected outcomes within the sphere of a specific period and expected budget. The ID of these activities is also chronologically presented in this study.
| No. | Activity | Time Period | Budget | Expected Outcome |
| 1. | Implementation of hardware (Drives) | 2 Months | $ 3500 | Enhancement of operational efficiency |
| 2. | Implementation of software (KMIS) | 3 Months | $ 12000 | Enhancement of operational efficiency |
| 3. | Purchasing subscription of CRM software | 1 Month | $ 9000 | Increase accuracy of operation management |
| 4. | Investment on R&D for Chemicals and Parma | 1 Year | $ 2 million | Improve the level of innovation |
| 5 | Development of security protocols | 3 Months | $ 10000 | Improve risk management process |
| 6. | Skill development programs of employees | 1 Month | $ 5000 | Improve the level of productivity |
| 7. | Sales training programs for supporting Pharma and Chemicals sales force | 1 Month | $ 2000 | Improve the level of productivity |
| 8. | Maintenance cost | 1 Month | $ 10000 | Enhancement of operational efficiency |
| 9. | Review of current activities | 2 Months | $ 500 | Enhancement of operational efficiency |
| 10. | Development of the future plan | 1 Month | $ 500 | Improve risk management process |
Table 4: Budget plan
(Source: Learner)
Priority of activities
| Activities | Level of Priority (1-10) (Low to High) |
| Replacement of old equipment | 3 |
| Maintenance cost | 5 |
| Review of current activities | 6 |
| Implementation of hardware | 6 |
| Implementation of software | 7 |
| Purchasing subscription of CRM software | 8 |
| Employee training programs | 8 |
| Skill development programs of employees | 9 |
| Development of the future plan | 9 |
| Development of security protocols | 10 |
Table 5: Budget plan
(Source: Learner)
The above-mentioned list has depicted clearly that mainly both the measurement and assessment of risk are projected as high priority activities apart from the incorporation of automation within the sphere of the research plants. It is found that research plants are part of future activities because it is quite effective regarding measuring the market trend as well as the upcoming situation that can impact the existing market.
As per the viewpoint of Mohamad et al. (2017), every company needs to focus on all the aspects associated with future planning activities as an effective method of risk mitigation. Apart from that, the companies need to focus on providing training to the employees as one of the risk management activities for enhancing productivity as well as efficiency.
Added initiatives and representation of a plan
The biggest addition in this budget plan would be the incorporation of an MIS. However, the implementation of MIS in this plan can be critical for UCB. It is stated that MIS is quite beneficial to resolve extensive issues apart from enhancing the efficiency of the organization because UCB is known to deal with three majorly important industries. This plan would be provided to every executive member via email for review. Apart from that, a meeting would be arranged for a fruitful discussion regarding this plan.
References
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