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Izhar Group Marketing Analysis
Citation preview
Strategic IT Management
Final Project
IZHAR GROUP of companies
Written By:
Kamran Ahmed Khan
ID # 053621-015
Date
May. 20, 2006.
IZHAR GROUP of companies Page 1 of 16
Table of Contents PAGE
Executive Summary 3
Business purpose of the Company 4
Company Mission Statement and History 4
Past and Present Performance 5
Structure analysis 6
Strategic vision 7
Information needs of the company 7
Operational needs 7
Managerial needs 7
Strategic needs 7
Industry analysis 8
Porter’s five forces model 8
Company analysis 8
SWOT Analysis 8
Strategic opportunity matrix 9
Value chain analysis 10
Recommendations 11
Alternatives 11
Comparative analysis of alternatives 11
Portfolio management 12
Implementation strategies 14
Tactical plans 14
Operational plans 15
Change management 15
Conclusion 15
References 16
IZHAR GROUP of companies Page 2 of 16
EXECUTIVE SUMMARY
The Information need of the company is that, company is using different software in
different departments. Which is not providing enough information to middle and Top
management to increase company’s efficiency and Performance. It is recommended that
this new ERP System will integrate all departments of head office, with their suppliers
and customers. New application will also be integrated with all factories and major sites
through extranet technology. With this ERP System, middle and Top management will be
able to get enough information on daily basis in different formats. New application will
provide new reports (designed using Crystal Report). These reports are not available in
current system, which will increase Top management decision-making and as a result it
will increase whole productivity and profitability of company.
IZHAR GROUP of companies Page 3 of 16
BUSINESS PURPOSE OF THE COMPANY
MISSION STATEMENT
To achieve client’s satisfaction by providing task specific, time efficient, cost effective
engineering products and services with continuous improvements in workmanship and
specifications.
HISTORY
Established in 1960 by the Chairman Mr. Izhar Ahmad Qureshi, a reputed name in
Engineers’ community of Pakistan, IZHAR has become one of the leading construction
GROUPS. With its broad and rich experience, high standards of
technical performance in the numerous major construction projects of various types, ranging
from Civil Works, Housing and Urban Development, Heavy Industrial Construction, Defence
Oriented Projects and Sophisticated Engineering Construction, IZHAR has earned an
outstanding recognition from the nation.
IZHAR is always ready to carry out any construction project of any size at any time
anywhere, with its best services and performance for its clients in the region. “Time to
contact IZHAR is when you have started thinking of your project”. Our variety of experience
stretching over 45 years, equipped with dedicated and motivated team of professionals,
provides you complete turnkey construction solutions.
Our professional staff and hardworking experienced crew work with our clients assuming a
tight schedule, economical construction and above all quality workmanship throughout the
entire project. We are capable to take up large projects of any size with proven track record
and pioneering innovative role in revolutionizing the construction environment in the
country.
IZHAR GROUP has following divisions.
Izhar construction private limited
IZHAR GROUP of companies Page 4 of 16
Izhar concrete private limited
Izhar steel private limited
Izhar housing
PAST AND PRESENT PERFORMANCE REGARDING IT
As already described that company was established in 1960. At that time there was no
concept of Information technology in Pakistan. As the time passes on company keep on
bringing changes for development. When the Information technology emerged in our
country, company decided to shift from its manual operation to automated operation using
Information Technology to improve its efficiency, performance and for customers’ maximum
satisfaction.
FINANCE
In 1992, company shifted from its Manual Accounting system to DOS base Accounting
Software, which proved to be very helpful in improving company’s efficiency. In 1995,
company felt that this DOS base software is not very fast and user friendly. So company
decided to use GUI (Accounting Software designed in Visual FoxPro), which was faster and
very user friendly as compare to DOS base Accounting software. In 2003, company decided
to transform from its present Accounting Software to new Accounting Software (Accounting
Software designed in Visual Basic-6 on front end, Access on back end and Crystal Report 8.0
as reporting tool), which was faster and can manage more data as compare to previous
Softwares. Company is still using this Software.
HUMAN RESOURCE
Human Resource department was also working manually, but in 1992, using Information
Technology this department was also shifted to DOS base payroll system and then to GUI
(Payroll System designed in Visual FoxPro) like Accounting Software in 1995. Company is
still using this Software.
IZHAR GROUP of companies Page 5 of 16
PURCHASE AND SALES
Purchase and sales department were working manually till 2003, then company decided that
it is necessary to transform these two departments from its manual operations to Automated
operations, this decision increased the efficiency and performance of these two departments
and also over all performance of the organization.
PRODUCTION, DESIGN AND CONSTRUCTION
Company was using old methods of production and designing for more than three decades
since its inception, but thanks to Information Technology that provide some latest soft wares
like CAD CAM, STADD-III (Structural analysis and design) and prima Vera (Project
planner). With the use of these Soft wares company has increased its productivity and able to
respond quickly to its clients.
INFORMATION TECHNOLOGY
Considering the importance of this department a proper IT department was established in
1995, although company was using DOS base soft wares since 1992. Now this department is
most valuable among all departments because Software Engineers are developing more
efficient and user-friendly soft wares. With the help of reports (MIS) generated from these
Softwares Top management is able to make quick and good decisions.
With the use of Information Technology over all performance of company has increased and
right now company is in this position to complete all tasks quickly and efficiently, which was
not possible when company was operating manually.
STRUCTURE ANALYSIS
Top management is responsible for decision making in organization. Decision making
process is based on MIS and also forecasting. Management information system provides
reports to top management; those are very useful in understanding current position and future
scenario, which is very useful in decision-making process. Thanks to information Technology
IZHAR GROUP of companies Page 6 of 16
that provide computer-generated reports and enable them to make quick and effective
decision-making, which is beneficial for the whole organization. As far as forecasting is
concern it is totally based on experience and in depth knowledge of the situation.
STRATEGIC VISION
Strategic vision includes both technological and organizational factors. It must consider the
organization’s maturity and sophistication. Intelligent IT executives do not attempt to
transform organizations from relative technological immaturity to maturity in one planning
cycle. Company will start transforming from its current application to new application step by
step.
INFORMATION NEEDS OF THE COMPANY
OPERATIONAL NEEDS
Although most of the company’s operations are automated but many things still need to be
done, like integration of different departments like Finance, Human Resources, Purchase,
Sales, Marketing, Production, Design and IT.
All above mention departments are within organization, besides this company also need to be
interlinked with their suppliers and with the suppliers of suppliers for bringing effective
changes in procurement and production operations. If company is interlinked via wired or
wireless technology with its suppliers, it will reduce lead-time and cost due to on time
delivery of raw material. Company also needs to be interlinked with their customers for quick
response to their demands/orders and useful feed back for improvement.
MANAGERIAL NEEDS
Although current system is doing well but managers need more information to improve
efficiency and productivity of their departments. Managers’ need is to integrate all
departments, suppliers and customers.
STRATEGIC NEEDS
IZHAR GROUP of companies Page 7 of 16
Current system needs to be integrated with other departments because it is very difficult for
top management to get required information and to get comparison of other departments for
decision-making purpose.
INDUSTRY ANALYSIS
PORTER’S FIVE FORCES MODEL
RIVALRY: Rivalry is very high in this industry, because there are many competitors in the
market with high productivity and Goodwill. Competitors are using Information technology
advantage to boost its productivity like CAD CAM, STADD and integrated systems.
SUBSTITUTE: IZHAR Group is also providing substitute products like Pre-cast concrete
roofing and Pre-engineered steel building, so company has competitive advantage over its
competitors.
BARRIERS: Entry barriers are medium in this industry. With a skilled team and medium
investment anyone can enter in this industry. Exit barriers are medium because firms can
wind up their business easily due to less initial investment.
BUYERS’ POWER: Buyers power is very high in this industry because it is a highly
competitive market. Buyers can bargain and can select lowest bid out of many options.
SUPPLIERS’ POWER: Supplier power is very low in this market because there are many
suppliers in the market and firms can purchase raw material from any supplier at lowest price
with high quality.
COMPANY ANALYSIS
SWOT ANALYSIS
STRENGTH: Strengths of company are its Goodwill, Professional managers, skilled labor
force, Professional and experienced staff and huge reserves. Organization has dedicated &
motivated team of professionals and has great success in innovating new products in the past
and will continue like that in future.
IZHAR GROUP of companies Page 8 of 16
WEAKNESS: Company’s main weakness is that, it is not using full advantage of Information
Technology. With the use of Information Technology Company can perform well in future.
OPPORTUNITIES: Organization has great opportunities all over the country like cities,
villages and industrial areas. Company also has opportunities in neighboring countries like
Afghanistan.
THREATS: Competitors are great threat to company, who are delivering quality work and
producing quality products/work using latest technology.
STRATEGIC OPPORTUNITY MATRIX
The senior IT executive are going to develop an ERP system which is equally important for
strategically and operationally, and vital over a long term. This ERP system will provide
strategic competitive advantage in addition to supporting important operational function.
10 3 2
Strategic value
4 1
0 Operational Value 10
The senior IT executive plots this new Application at “2” because it is highly important for
strategic and operational needs.
COST AND BENEFITS
Program User IT Strategic TacticalName Sat. Sat. Importance Importance Cost Benefits
New ERP 8 9 9 9 1 Million 2 MillionSystem
IZHAR GROUP of companies Page 9 of 16
This program is relatively new and is anticipated to be of great strategic importance. Both end
users and IT department are quite satisfied with its current form. It is anticipated that new
system will give high future payoff.
VALUE CHAIN ANALYSIS
Primary Activities
The Value Chain
Support Activities
INBOUND LOGISTICS: Bringing material into business from suppliers without using IT
advantage.
OPERATION: Converting material into final product/service using CAD CAM, STADD-III
(Structural analysis and design) and prima Vera (Project planner).
OUTBOUND LOGISTICS: Shipping out final product to the customers without using IT
advantage.
MARKETING AND SALES: Marketing and sales of product/service. To inform buyers
about products and services, induce buyers to purchase them, and facilitate their purchase.
SERVICES: Includes all the activities required to keep the product or service working
effectively for the buyer after it is sold and delivered.
PROCUREMENT: Is the acquisition of inputs, or resources, for the firm.
IZHAR GROUP of companies Page 10 of 16
Inbound logistics
Operation Outbound logistics
Marketing
and salesServicesOutbound
logistics
Procurement Human Resource ManagementInfrastructure technological Development
HUMAN RESOURCE MANAGEMENT: Consists of all activities involved in recruiting,
hiring, training, developing, compensating and (if necessary) dismissing or laying off
personnel.
TECHNOLOGICAL DEVELOPMENT: Pertains to the equipment, hardware, software,
procedures and technical knowledge brought to bear in the firm's transformation of inputs
into outputs.
INFRASTRUCTURE: Serves the company's needs and ties its various parts together, it
consists of functions or departments such as accounting, legal, finance, planning, public
affairs, government relations, quality assurance and general management.
RECOMMENDATIONS
ALTERNATIVES
1) Doing nothing (Status quo). Just keep on doing what company is doing right now.
2) To integrate all departments of head office to facilitate Top Management in quick
decision-making process and development.
3) To integrate all departments of head office, as well as to integrate all supplier and
customers.
4) To integrate all departments of head office, as well as integrate all supplier and
customers and also integrate factories and major sites via extranet technology.
COMPARATIVE ANALYSIS OF ALTERNATIVES
First alternate is not feasible because in future scenario only those organizations will
survive, who will respond quickly to their clients and will give their customer a required
satisfaction. If company will follow Status quo policy, it will leave behind from their
competitors. In this situation it would be very difficult for organization to survive in the
highly competitor market, which is using latest technology for competitor advantage.
IZHAR GROUP of companies Page 11 of 16
Second alternate is feasible as compare to first because it will help out Top Management
in quick decision-making process. When all departments will interlink, it will increase the
efficiency of organization.
Third alternate is basically a Value Chain concept. In which we will interlink all
organization departments as well as all suppliers and customers via wired or wireless
technology. It would be difficult for organization to train employees, how to work as a
chain with their suppliers and customers. After training and hiring some senior
professionals company can over come this problem and can attain a comparative
advantage.
Fourth alternate ERP system is little expensive and required more training, but it’s the
Best alternate to increase the efficiency and performance. If all factories and sites are
integrated with head office, it will be very easy for the
middle and Top management to check the performance and efficiency of each factory and
site on daily basis. On the basis of daily reports Top Management would be able to
understand the problems on daily basis and solve them quickly to increase over all
performance of company.
PORTFOLIO MANAGEMENT
DEPRECIATION AND OBSOLESCE
As the business conditions are changing because we are going to interlink all departments
of Head office, suppliers, customers, sites and factories. So company has to change its
Application system because current system is not suitable for handling huge and complex
data. In new ERP system we will use Visual Basic.Net on front end, SQL server 2000 on
back end and Crystal Report 11.0 as reporting tool.
DEVELOPING NEW SYSTEM
IZHAR GROUP of companies Page 12 of 16
In order to understand that current system is getting obsolete and cannot manage huge and
complex data. It would be very costly if company will go for enhancement of old system.
Company should develop a new system. New ERP system will manage huge and complex
data because company is going to interlink all Head office departments, its suppliers, its
customer, sites and factories using both wired and wireless technology. Company has
skilled software developers and programmers; those understand the current system very
well and can develop new system up to Top management requirements. To develop a new
system huge long-term investment is also required because company is going to invest on
software, hardware, communication links and training of not only their own staff but also
suppliers and sub-contractors. Company is going to develop new software on the basis of
value chain concept.
DATA RESOURCES
In order to develop new system, database need to be very reliable. The database provides
the lifeblood that sustains organization’s daily operations. These data resources, their
database management systems and the hardware on which they reside are vital and
critical adjuncts to the application portfolio itself.
SATISFACTION ANALYSIS
New ERP system will have good documentation; develop in modern language, user
friendly, trouble free and well architectures.
10
A
User satisfaction C
B
0
0 IT Satisfaction 10
IZHAR GROUP of companies Page 13 of 16
Programme “A” is representing a new ERP system development, which is lower than
10,10 because of changes in business condition during system development.
TRENDS IN RESOURCE APPLICATION
The next Figure shows the development of funds over time in maintenance, enhancement
and new development of application. Resources devoted to new application decline over
time as compare to maintenance and enhancement that increase over time. That’s why
company has decided to develop new application, which will be beneficial for the
company in long run.
Total resources
ResourcesMaintenance and Enhancement
New Development
Time
IMPLEMENTATION STRATEGIES
TACTICAL PLANS
Tactical plans forms basis for assessing organization’s performance. They also provide
objective information for measuring the firm’s progress towards long-range goals.
Implementing of tactical plans consists of selecting hardware and software, installing
hardware and software systems, training of users and IT people, converting from previous
processes to new procedure and establishing measurement systems. They also provide
what kind of training is required to over come resistance of new technology. Managers
IZHAR GROUP of companies Page 14 of 16
must schedule these activities, assign human and material resources and develop detailed
budgets to complete the plans.
OPERATIONAL PLANS
Operational plans add detail and direction to the organization very near term activities on
day-to-day and week-to-week basis. Implementation of Operational plans include,
identification of hardware and software vendors, setting vendor criteria, developing space
alternatives and developing system analysis of current procedures.
CHANGE MANAGEMENT
Change management is a management technique for planning, coordinating, handling and
reporting system changes that could negatively impact service delivery. Changes can
involve modification of hardware, software, operating system changes, equipment
relocation, network and environmental changes. The objective of change management
process is to ensure that system changes are implemented with minimum or acceptable
risk level. IT and client organization must follow a planned approach to change
implementation that minimize problems and achieve desired service level during
transition.
CONCLUSION
As already mention in Information needs of the company that company is using different
software in different departments. Which is not providing enough information to middle
and Top management to increase company’s efficiency and Performance. It is
recommended that this new ERP system will integrate all departments of head office,
with their suppliers and customers. New ERP system will also be integrated with all
factories and major sites through extranet technology. With this integrated System,
middle and Top management will be able to get enough information on daily basis in
different formats. New application will provide new reports, those are not available in
IZHAR GROUP of companies Page 15 of 16
current system, which will increase Top management decision-making and as a result it
will increase whole productivity and profitability of company.
REFERENCES
www.izhar.com
Discussion with department heads of the company.
IZHAR GROUP of companies Page 16 of 16