The typical focus on production activities, together with their limited investment budgets, often leads SME entrepreneurs to exclude Information systems (IS) issues when ever planning organizational development. As a result, SMEs usually devote scarce re-sources to the IS department and, whenever they do, IS staff competence are strictly narrowed to technical issues (Palvia, 1996; Soh, Yap Raman, 1994; Zinatelli, Cragg & Cavaye, 1996). The consequent lack of internal expertise limits ICT specification and selection policies (Monsted, 1993; Schleich, Carney, & Boe, 1990), and inevitably leads SMEs to develop an IS, which is inadequate to the organizational needs (Cragg & Zinatelli, 1995; Lai, 1994; Lang, Calatone & Gudmundson, 1997). The fast pace of ICT innovations amplifies the issue of the worth of IS management. Among SMEs, it is definitively questionable whether IS has been developed according to efficiency and effectiveness requirements, and whether it is aligned with the business strategy. Even more critical is the question whether anyone in the company does consider at all IS efficiency, effectiveness and strategic alignment as issues.

LSB does not seem to differ significantly from this general picture. Like many other SMEs in the fashion industry, LSB management seems extremely concerned about production activities, while leaving only marginal attention to the influence of ICT applications on the company strategy.

Nevertheless, a lot of research has been devoted to the topic of IS effectiveness at the strategic level. More precisely, two main key issues are highlighted in the literature:

  • IS strategic alignment is claimed to be verified when business strategies are enabled, supported, and stimulated by information strategies (Broadbent & Weill, 1993), or, from a different point of view, when choices within content and process dimensions of IS planning are mutually supportive, the two dimensions themselves are harmonized in a manner that is consistent with competitive strategy (Das & Zahra, 1991);

  • IS organizational support is defined as "the adequate IS support to organizational goals and activities at every level" (Lederer & Mendelow, 1989; Woolfe).

In order to analyse such key issues within LSB, a "business process-based" analysis has been adopted. This approach is coherent with a lot of empirical results. A process-based approach is claimed to be more adequate to support any managerial activity, since it should help addressing a number of common organizational problems, such as fragmentation or the lack of cross-functional integration (Galbraith & Kazanjian, 1986; Garvin, 1998; Harrington, 1991), while enabling individual workers to identify and anticipate new business opportunities (Brooke, 2000; Davenport, 1993). In particular, a process-based approach seems to properly fit SMEs, where employees carry out inter-functional tasks and do not have a precise formalization of roles (Dutta & Evrard, 1999).

In this case study, we suggest a qualitative assessment of IS strategic alignment and IS organizational support of each process. From the methodological point of view, this choice is widely recognized by the literature. Kaplan and Duchon (1988) performed a detailed analysis of research in the field of IS that made use of an interpretive approach and qualitative methodologies. More recently, a relevant number of studies underline the intrinsic interpretive nature of IS; interpretive methods of research in IS show to be effective since they attempt to understand phenomena through the meanings that people assign to them (Boland, 1991; Kaplan & Maxwell, 1994; Orlikowski & Baroudi, 1991).

Basing on this general theoretical framework, this case study aims at questioning whether an inadequate integration between strategic business planning and IS management could lead to reduce IS organizational support (Luftman, Papp, et al., 1999; Teo & King, 1997; Teo & Ang, 1999), and, finally, to affect overall company performance.

In particular, the case analysis could address three main research questions:

RQ1: Is the IS strategic alignment verified within LSB? Or, in other words, does the IS provide an adequate support to the information requirements of the strategic processes?

Step 1: LSB's strategy analysis identification — the main strategies of LSB have been settled by the means of direct interviews with both the CEO and the top management.

Step 1: LSB's processes identification — a set of strategic processes has been identified through direct interviews with the CEO as well as with managers and operatives. The detailed identification of the information flows has been achieved by the means of direct interviews with the persons in charge of each process. Each process has been represented through data flow diagrams (DFD). Finally, interviews with top level managers have led to identify the most strategic processes.

Step 1: Determination of the information requirements of each process — DFD has also allowed highlighting the specific information requirements related to each activity carried out within a process.

RQ2: Does a possible lack of IS strategic alignment and IS organizational support lead to decrease the effectiveness and efficiency of a process?

click to expand
Figure 6: The Steps for the Assessment of IS Strategic Alignment

And, as a consequence at the corporate level:

RQ3: Does a possible lack of IS strategic alignment and IS organizational support lead to decrease the overall company results?

The lack of IS strategic alignment in a business process does not necessarily represent in itself a problem. In fact, it is necessary to highlight how such lack is related to IS organizational support. The case study provides a description of the main issues arising in each of the strategic processes, highlighting the possible gaps between the existing and the needed IS organizational support. This information should be used as a basic input to assess how IS management can affect business performance, at the process level and finally at the corporate level.

LSB Business Issues

From the strategic and organizational point of view, LSB is quite similar to other medium-sized companies. The explicit strategic orientation refers to a few main objectives while the whole business is driven by a number of non-formalized strategic choices.

"Collection Development/Trade Fairs/ Order Gathering" Cycle

Within LSB, all the operative, organizational and strategic choices are strictly conditioned to the peculiar time constraints that characterize the high quality shoe industry as well as the whole fashion industry. The "production/commercial" cycle is strongly affected by the seasonal factor that requires the firm a very rigorous compliance with the time schedules for both the design and engineering of the product and the purchasing of raw materials.

In fact, as a final step of this cycle, all of the main companies of the shoe industry attend the trade fairs scheduled according to a timeline that can not be changed by a single company. During these fairs, LSB agents perform a "sale by sample" and collect the majority of all the sales orders. Obviously, the more complete the collection is (i.e., the shoes models being suitably priced) that LSB is able to present at the fair, the better the results will be.

Built to Order Production

LSB aims at reducing the leftover stock by producing the shoes only after receiving the confirmation of the orders, which are gathered during the trade fairs or during the rest of the year by the sales agents.

Consequently, the handling of goods refers almost exclusively to products that are already sold and waiting to be shipped to the property shops or to firms holding a sale concession.

Centralized Management of Purchasing

The purchasing phase is entirely performed by LSB internal staff, and a particular attention is paid to the purchasing of leather. The high strategic importance of this process makes LSB take care of this task for its external workshops, too. Such a choice is mainly due to the need to avoid the risk of unacceptable differences (in terms of the tone of the leather) for the same model produced by different external workshops.

Centralized Management of Relationships with Partners

LSB manages the relationships with its foreign branches, sales agents and shop directors by means of procedures marked by both a very high centralization and a reduced operational and organizational autonomy. The relationships with external workshops are carried out in the same way.

Non-Formalized Strategies and Contradictions

Everyday, LSB entrepreneurs take decisions at the operational level that have an impact on the company strategy. Certainly, each of the following issues represents a subject requiring a deep evaluation of the opportunities and identification of the corresponding implementation practices. Like many other medium-sized companies, LSB top managers struggle in a dilemma between the actual consistency of declared strategies and the effectiveness of the efforts aiming at making such strategies explicit.

Outsourcing Part of the Production

Most of the decisions made on this subject are strongly related to the insufficient production capacity of the internal factory. Thus, LSB could consider a specific production activity as strategic, and, at the same time, decide to outsource it because of the inadequacy of its production plants.

Qualitative Standard Preservation

This topic is usually an expression of a strategic issue, and its fulfillment should be normally achieved by the implementation and management of a formalized quality control system. So far, such a system has not been implemented in LSB, yet. Thus, the quality issues can be defined as a critical success factor, but, at the same time, LSB does not promote any strategy supporting the product quality. As an example, a third-party manufacturer located in Romania provides LSB with the assembling of uppers. It would be reasonable for LSB to perform a rigorous quality check and a precise cataloguing phase of the defective parts, particularly because of the peculiar geographic position of the partner which does not allow a continuous interaction. On the contrary, this external workshop is not subject to a severe quality control procedure; it is treated exactly like the Italian ones, often located nearby LSB.

Rise in Productivity

LSB top managers have always stressed out the need of boosting productivity, keeping at the same time the high qualitative standard. To achieve that aim, LSB should have at least renewed its machinery. Instead, no action has been actually undertaken in that direction; moreover, the skilled personnel have diminished from 115 to 86 units.

Annals of Cases on Information Technology
SQL Tips & Techniques (Miscellaneous)
EAN: 2147483647
Year: 2005
Pages: 367 © 2008-2017.
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