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Over the years, organizations have realized that for a business to be successful, managing information system is a key to achieving the goals and profitability, as opposed to the past where organizations have only concentrated in managing their resources majorly; labour, raw materials and capital (Laudon &Jane, 2012). Any business entity today depends squarely on how well they manage their information system in order to sustain their major activities and functions, be it in a public institution or a private business. Today information system change is effected purposely for two major reasons; for solving business problems and for the technology management.
It is also important to note what people in the functional areas say; manufacturing, finance, accounting, human resource and marketing depend so much on the information system and any mismanagement of the same could hinder operations of any entity. Managing information system change should address the needs of the organization. In the light of the above, we will examine Pepsi Company which not only operates in the Middle East, but has gone international with so many branches all over Africa.
Nature of the organisation
Pepsi Company is a giant beverage Manufacturing Company, full of talented individuals and strong leadership. The company has expanded rapidly since its inception and has various branches all over the world, according to Saad Abdual, CEO of Pepsi Asia; the company’s growth has been fueled by innovations which offer great-tasting brands loved by consumers all over the world.
Category of the organisation
Pepsi Company operates in a very competitive food and beverage industry; it is, however, a world’s giant in comparison to its competitors.
Size of the organisation
The company, going by its number of employees, can be categorized as a large organization. It has hundreds of employees both casuals and permanent staffs. By the end of 2011, the total number of employees stood at 297,000.
Operations of the organisation
Pepsi Company operates both locally and internationally, it has wide presence in the Middle East, some parts of Africa and in the United States of America. It can thus be categorized as a World Wide organization.
Financial constraints. The three core factors which influence the operation of any organization are: what is done by the organization, the way in which the organization works and the way in which all units share information. This shows how Information System (IS) change will play one of the fundamental roles in any organization. It follows that such changes should be made right the first time, that is why there should be an adequate financing of the same to ensure that all procedures laid down are effected as needed. When finance become a challenge, then evidently there will be a failure in one of the systems.
It is evident that any change comes with new ideas, practices and procedures. It can also emerge that these changes might not have been planed for the normal operations of the organization. Therefore, there will be a shortfall emanating from what was planned against what is now presented, this, if not well managed, can be a great hindrance to the achievement of set goals and even the normal operations of an organization. Pepsi, being a manufacturing industry may risk loosing substantial amounts in trying to manage IS change in supply chain framework. Pepsi just like any other organizations comes up with its budget and projections by a start of business and they expect to run on the same level for a period projected. The planning and the process of budgeting are normally formalized so that the funds are allocated centrally in order to control and coordinate expenditure. Resources are also allocated according to projections. This means that, any slight expenditure out of the budgeted funds would negatively impact another projects plan. Therefore, any IS change management will come with its consequences in the company and if not well managed, can lead to a great loss.
Adaptability. For change to be embraced, it normally takes some time. This time can be short or long depending on two major factors; the extent to which the change is made and the people embracing the change. For IS change management to be effective, there should also be time for analyzing the feedback from people regarding the change employed. Feedback is also a part of IS change and therefore it should reflect a positive and progressive work if the IS change is to be considered effective.
The experiences of employees or other people involved in the IS change will impact the decision on more actions to be taken, their reception and future changes of the same. If the IS change is well accepted then everything will run smoothly. The problem comes however where the time taken to adapt to the changes becomes long and when the adaptability process also becomes difficult. This will lead to time wastage which will hinder with the normal operations of the company, many employees will spend more time trying to fit into the new IS at the expense of the time for their normal operations.
The problem of adaptability will also bring out the issues of lack of support. When people have not fully embraced the change of IS, there will be little or no support as many will perceive the same as a threat to their normal comfort zone and personal status. Information system change management will definitely move every individual employee and the whole organization from the normal comfort zone, there will always be different people trying to resist and ignore the process of changes and this will further lengthen the adaptability period. All these will impact negatively on the operations and profitability of the organization.
There are other associated challenges that can be linked to the above discussed challenges; they go hand in hand whenever there is Information System change management.
In the process of undertaking the IS change management initiative, the associated challenge likely to crop up is the hardship in balancing the company’s many objectives. The company has a number of objectives to realize. These include reduction of production cost, improvement of customer service not to mention the improvement of it’s relationships with the suppliers. Meeting these company’s objectives in the supply chain structure and aligning them with the IS change management may be difficult to achieve at the same time. Sometimes the IS change management may seem to be going against the company’s structure and this becomes a major hindrance.
It is important to embrace IS change but as such is done, more weight should be given to the people since they are the ones who can make the entire process successful or unsuccessful (Simha & Jeffrey, 2009). Developing objectives, implementation of the objectives and the solutions squarely depend on the people.
Global research and innovation. Pepsi Company majorly depends on innovations to ensure it keeps ahead of its competitors; the company has thus developed major plants in different countries which contribute in Information System change to ensure it’s operations are streamlined, effective and up-to-date products for the consumers. These measures have made the company go into mergers with different companies to strengthen its capital base and operations in an attempt to improve it’s customer network. Another major reason for the merger is to cut costs since the research and innovations are also costly and if they are left for one company they might turn out to be a burden.
Recently Pepsi entered into one of the major alliances with Tingyi, which has been rated as one of the best liquid refreshment firms in China. The alliance has improved greatly it’s operations and has established other minor plants.
Since Pepsi started operating in China, it has established other company plants such as Kunming and Zhengzhou since this has ensured that Pepsi operates more than 70 plants which are active across China. Managing IS change has been made easier through the strategic alliances that the company has been involved in. This has assisted them to achieve both long and short term goals which would have otherwise been difficult to achieve.
Through research and innovation, Pepsi has come up with new ways of improving the information flow, operations and the way in which it goes through in its normal day to day operations. One of the most advanced steps Pepsi has made to strengthen its presence in Asia is the opening up of the Research and Development Center in Shangai (“PepsiCo”, 2012). Through these changes, the company has been able to keep track of it’s new customers, new trends in the market and how information flows through it’s supply chain from production to the end user.
Improvement of packaging. Pepsi has realized that in the process of IS change management, it must undergo major changes in terms of packaging and the general outlook of their products. With the competition becoming tougher and new players entering the firm, the company has been forced to make major changes in the way it does it’s packaging.
It has also been noted that, in order to get good profit, it is necessary to sell appealing products to customers, any change however has to be uniform and consistent, which is why the company has automated most of its operations particularly those that does packaging to ensure that there is consistent packaging otherwise this might attract negative reaction from customers and trickle down to reduced demand. As a way of improving packaging, Pepsi Company has come up with measures to tailor Global brands for local and regional taste, this has helped in meeting different individual needs instead of just coming up with a universal product for all, and this is one of the key goals of the established Asian Research and Development Center. Examples of such local flavors include; peach flavors, sour plum, tea flavors and many more.
Consumers are increasingly demanding safer products since many people are nowadays concerned with the wellness and health. In the wake of this, IS change management has been characterized with slogans such as ‘better-for-your health’ ‘fun-for-you’. This is done in an attempt to maintain consumer demographics the change of which may shift consumer preferences thus leading to a loss or reduced sell. Pepsi company has realized that in order to maintain this efficiency packaging has to be turned from manual to an automated system, most processes thus will have indispensable dependence on computer automated systems since they are fast, reliable and produce consistent results.
Factors on which goals are pegged
It can be concluded that the goals set are thus pegged squarely on fundamental factors such as; identification of the customer traits, easy information management, central access of facilities, easy recording and distribution of information.
Pepsi Company believes that the understanding of the customer traits plays a major role in success of any business undertaking, this is because all the reasons revolve around the customers, happy customers will always buy more and bring more referrals to the business, and on the other hand, dissatisfied customers will shy away from bringing more money to an organization. The goals of an organization are thus pegged on customer traits and demographics.
Information management and distribution is also a key factor in any organization. In the process of IS change, the goals set should reflect ease of information flow and storing of data. Information System is thus used to organize this data and provide timely execution when it is needed for operational or decision making purposes. With the growth of business, manual processing of data and distribution becomes a challenge which is why the IS change is embraced to assist in faster execution and distribution of data.
Management of information system change in supply chain framework is a major determinant of whether a business will be successful or not (O’Brien, 2009), it should thus be done in harmony with the existing procedures, goals, employees and other external stakeholders of the organization such as customers and suppliers. It should be noted that the combination of peoples’ activities, management, decision making and information technology work hand in hand in ensuring organizations’ success.
Any of the above factors should not be left out in the process of information system change and implementation, which is why the demand for information system change in the organization has continually been important and necessary procedure for any company be it big or small. Information system plays a major role in driving of the economy and operations of any business.