322AA Information Technology and Vlue Chain Management

ion system and customer relation management.

Information technology in many firms are changing the overall concept of the technology from cost centre orientation to trusted business partners within the frame work of the business. The main intention behind the transform is the give the business the much needed tools to be competitive in market place which is global. Before the transform the information technology was considered as a cost centre. The IT had to mainly focusing on the technology alone as a standalone aspect. The IT department of the different companies did not focus on the mere concepts of the weakness, strengths, opportunity and threads. Information technology when related to the cost factor or centre, it has been providing services when are concentric to emails, business application access and data storage. All of these bridges have been mainly outsourced to different vendors which is mainly done on the basis of cost and with respect to the level of service. From the point of view of the business, if the IT cannot provide the expected service which is the need than the outsourcing can be considered as a reasonable approach (Hopkin 2017). When it comes to value, IT can collaborate with the business bodies to provide the demand of the service they opted from it. The IT department has mainly focused on the advantage which it can provide on the point of view of the better understanding and share in the vision of the business. Putting emphasis on the understanding the IT department should be able to provide a list of better services which the business farm would find critical to achieve.

The information technology department has directed recognized the need of quality towards the service they provide. This quality aspect can be measured by means of service desk ticket, up time and other objectives that can be considered as very much vital from the point of view of any organisation. The IT is slowly moving towards adapting the need of the business bodies. It can be seen before such a move the IT department, vendors with the IT service providers with the IT equipment and /or the services. This was mainly imposed on the automotive to the machinery industry (Gordon et al. 2016). Reliability can be sold quite easily than selling features. The quality of any product or service can be neglected in many ways one of the major reason of doing so is the deadline issue of the concerned good (Hopkin 2017). The need of delivering a product or service before the deadline can be sometimes very much challenging on the point of the originator. However the most important point to be considered here that the bad quality of the service has nearly come to an end. Putting emphasis on the part of the service gainer they have somewhat understood the concept that the lower productivity would directly involve in a lower productivity. Each and every business needs a system that they can easily rely upon. Each and every hour of down time would be directly reflected on the part of the lost workers’ productivity and also would hamper the customer and the service gainer aspect (Almeida, Hankins and Williams 2016). Depending upon the size of the business concern the loss of the customer would directly be a huge loss from the point of the organisation. In simple words time would result in a lose customer moral and the lost customer would not again intent to get the service from the organisation concerned here. Customer satisfaction could be a vital term here because in any field of business orientation the customer if they are keep happy with the service and the quality of the service it would be beneficial from the point of view of the customer as well as from the point of view of the organisation.

The Business value of IT

It is very much crucial for the IT leaders in order to influence the individual who are mainly tasked with the distributing resources which are scarce across the organisation. The following points puts emphasis on the term of business which are related to the information technology:

• The IT organisation: In order to increase the business value of the IT, IT mainly refers to the organisation inside the framework not related to the technology. In other words funding cannot be only related for acquisition, but can be related to securing, providing reliable service and its integration.
• Funding: There always lies a option of optimizing the IT funding level which are mainly aimed to drive the measure which is needed for the business value related to IT
• Money: Money can be related the unit of measure of the value. When relating it to the professional of the IT they refer it to other attributes with respect to IT, but can be mainly be transferred into a way of authority approving which can be compared to other sort of resources which request for funding.
• Transaction: The measure of the value of IT cannot be merely be expressed without the implementation of a transaction (Hopkin 2017). Sometimes it may be delivered and consumed in order to critically analyse then value of the IT.
• Service: The measure of the IT cannot be related to the business until it is explicitly stated what the IT organisation is mainly delivering (IT services) in a way appropriate and which can be easily to understandable to the provider of the service.
• Consumer: The customer related to the value of the IT service by agreeing to pay for the service they have implemented and used according to their requirement.
• Change and operation:  All the fundamental requirements of the IT can be divided into two categories: change and operate. The measure of the value of the business related to the IT can be measured by the mentioned two aspects.
• Operate: cost of service: Putting emphasis on the portion of operate average 66% of the total spending, the value is measured with comparing the cost of the service which is related to the IT to the alternatives which is considered to be best (Almeida, Hankins and Williams 2016).
• Change – ROI: Relating to the change portion in the IT budget all benefits should be quantified so that the measurement for the ROI can be conducted.
• Enduring: All the stated truth can be considered to be enduring and are not influenced by the change in the processes or technology.

Risk in IT

IT risk is the application of the principles which can be involved in the risk management to an organisation in order to manage the risk associated with the field. The main aim of the information technology management is to manage the ownership. Influence, adoption, operation and use of these various aspect or terminologies as a part of the larger enterprise (Gordon et al. 2016). IT risk management can be considered as a component of a larger enterprise related to risk management protocol. This encompasses not only the aspect of negative effects and risks boy also the operation and services that can be related directly to degrade the value of the organisation and take the potential benefit of risky ventures into the scenario. IT risks can be managed by following the steps.

Assessment: assessment of every risk is accessed and scrutinized properly

Mitigation: in order to reduce the impact counter measures are provided.

Evaluation: at the end of the scenario of the project the effectiveness of any measures are mainly evaluated. And according to the result actions are focused and its various aspect of precautions are taken into account

Achieving the competitive advantage can be directly related to continence on the internal environment factors (interdepended factor between its different aspects), external environments (environmental uncertainties like risk associated with information technology) and other cultural factors.  Only the remedy of these fundamentals can be achieved by appropriate and sufficient IT capabilities which can be reinforced in channel processing and capability of implementing the information technology in turn and reap of the be if it’s that can be directly be achieved with its implementation.

Origin of value chain in IT

The approach of the value chain mainly looks into the overall strategy of the organisation and mainly can be related to the competitive strength of the organization (Gordon et al. 2016). Value chain is mainly considered at the concept of the organisation are not merely random compilation of machinery, people and equipment and main aspect of funding (Meyer and Reniers 2016). Only if the consideration is made into these input into the system, the question of is the input in the near future be productive with the concern of the organisation. The ability to perform a specific activity and the management of the overall concept of the linkage of the activities can be referred to as the advantage of the competitive business. There is a difference between primary activities and supporting activities. Primary activities can be termed as the delivery or the creation of the service or the product (Skees 2016). Each of these concept can be referred to or can be involved as the improvement activity (Almeida, Hankins and Williams 2016).

Risk analysis

  Risk analysis can be directly be related to the technique of managing and identifying the potential problem that would undermine the key business projects and its initiatives. In order to carry out the risk analysis aspect involved in an organisation the most primary objective is to identify the threats that can be possibly be faced in the near future (Gordon et al. 2016). With it estimation of the likelihood with this threats that would be materialized would be taken into consideration. Risk analysis can be considered to be complex taking into account the aspect of detailed information such as financial data, security protocol, project plan, marketing forecast and other information related to it (Hopkin 2017). This concept can be considered as a planning tool termed as essential and with its implementation it could save time, reputation and money. Risk analysis or risk assessment can be quantitative, semi – quantitative and qualitative (Bouvard and Lee 2016).

Quantitative approach of the risk analysis mainly assigns numerical value with respect to both likelihood and impact. The quantitative measure with the risk analysis is basically calculated with the help of a statistical model which can be considered as a guide line to judge whether or not it is acceptable. The below figure explains the relation between consequence, likelihood and the limits of acceptance.

Semi- quantitative approach of risk assessment classifies threat according to the probabilities and consequence of occurrence (Groves et al. 2016). This is mainly in the way of options which are based upon the person making the assessment. The concept can be classified into following five classes

• Class 0 – very unlikely ( the probability 1 in 1000 years)
• Class 1 – unlikely ( 1 in 100 years)
• Class 2 – rather unlikely ( 1 in 10 years)
• Class 3 -  rather likely ( ones in a year)
• Class 4 – likely (ones a month) (Bouvard and Lee 2016).

Qualitative approach describes the consequence of the likelihood in detail concept. This approach is mainly used when the event is very much difficult to express in terms of numerical values (Hopkin 2017). It can be related to an occurrence without any information that can be considered as adequate information and numerical data related to it. This type of analysis can be related to as initial assessment of the recognize risk.

Use of risk analysis

Risk management processes can be sub divided into several sub processes which are mainly executed in a sequential manner (Wipplinger 2017). One of the most important sub processes that are related to the topic is Enterprise Risk management. The enterprise risk management is divided into three main steps:

• Identification of risk: Classification and identification are done on the organisation‘s exposure to the different risk factors. There are two main factors in order to identify the risk factor, those factors know the organisation in-depth and the market in which the organisation operates. After the identification process the risk factors are classified as :

1. Strategic: this deals with the objectives which are mainly focused on the long run.
2. Operational: it deals with the everyday life within the prospective of the organisation which are being faced with the main motive of striving for its strategic goals.
3. Financial: it can be related to the effective control and management of the finance of the organisation.
4. Knowledge management: it is related to the control and management of the resources such as competitive technology, loss of key personal and intellectual property (Almeida, Hankins and Williams 2016).

• Description of the risk: presents risk that are identified in a format which is structured. This mainly facilitates assessment of risk by means of nature of risk, possible improvement actions, monitoring of the risk and identification of protocols (Bainbridge 2016).
• Estimation of the risk: in this phase qualitative and quantitative risk analysis is performed.
• Loss of control and autonomy: the outsourcing can result in leading the organisation to lean structure. This may result in loss of autonomy, since the organisation may not consist of internal team in order to discuss technological strategies. Referring to an extreme condition it may finally result in total loss of control involving in no way to validate bids related to the supplier. Moreover it can be considered to be time consuming and difficult and in order to regain the control it could be expensive (Wipplinger 2017).

Mitigation of risk

The main goal of the risk identification and with it its analysis is to evaluate the risk mitigation. The following point’s gives an overview and the importance of the mitigation related to risk with it its approach in order to reduce or mitigating project risk.

Risk mitigation Planning

The risk mitigation planning is a continuous process or can be termed as ongoing effort that cannot be stopped after the risk quantitative assessment relation between consequence, likelihood and the limits of acceptance relation between consequence, likelihood and the limits of acceptance (Hopkin 2017). Risk management include can be considered as a front end planning with regards to the major risk and how they can be mitigated and managed once they are identified . Therefore it can be stated that the specific risk strategies in order to mitigate them should be incorporated in the plan of the project execution. Risk mitigation plan should incorporate the following characteristics.

• Characterizing the main cause of the risk that have been identified and after that it is quantified in early phase of the process of management of the risk.
• Evaluation of the common issue and risk interactions.
• Identification of alternatives regarding the mitigation strategies, tools and methods with each of the risk factor (Bouvard and Lee 2016).
• Prioritize and access of the alternative mitigation plans.
• Communicating result planning to all the participants of the project for the proper implementation of the alternatives (Wipplinger 2017).

Risk Buffering

Risk buffering can be considered as some sort of reserve or buffer that would directly absorb the effect of the risk without jeopardizing the overall working of the project.  An example of this scenario is the contingency factor that reduces risk of the project running out of fund before the project is completed (Bainbridge 2016). Buffering can also include the allocation of time which is considered as additional time, machine, manpower and other form of resources used by the project. 

Buffering with the aspect of cost or schedule overestimate and other co related factors can mainly accumulate across the project can be done in the owners detriment since they can result in a upward trend that can be stated as general in the expected projects duration and cost. When relating the aspect to the private project, this trend is mainly controlled by competitive factors and by the owner’s knowledge of what the schedule and the cost should be considered. If a situation arise that the bidding pool is small or if the owners knowledge is not knowledgably there must be control measures taken that are adequate on scope control creep, schedule creep and cost creep (Hopkin 2017).

Risk control

Risk control mainly refers to the risk associated within the prospective of the project and taking necessary precaution and mitigation planning in order to reduce the overall impact in the project (Bainbridge 2016). Risk control can be implemented by installing gathering of data or early warning systems that provide the information in order to access more accurately the impact, timing or the risk and likelihood. When risk control is compared with risk avoidance it can be considered less expensive.

If the risk control is associated with the launch of a product with it the competition presents a form of risk, then ion this situation one solution which can be taken into consideration is that to accelerate the project time, even in some situation cost should be taken in consideration. An example of the risk control is the monitoring of the technology development on highly technical one of a kind project (Bouvard and Lee 2016).  

Conclusion 

Information technology can be considered as a major breakthrough with the main motive of improving the business efficiency and its overall effectiveness in its different field where it can be applied to. However these benefits can be related to the potential which can be considered more beneficial and more significant in the supply chain related to the international activities. There can be many challenges in different field which can be directly be resolved with the implementation of the technology. The main motive of the information technology is providing a platform in which its advantages can be applied and overall gain can be achieved, this can be achieved by the value chain management and the control of the risk factor which are associated with the implementation of the technology. The report would provide an overall guideline to improve the advantages and its related concept. Finally it can be stated that leveraging the IT capabilities in order to support management and achieving the competitive advantage can be directly related to contingence on the internal environment factors( interdepended factor between its different aspects), external environments(environmental uncertainties like risk associated with information technology )and other cultural factors.  Only the remedy of these fundamentals can be achieved by appropriate and sufficient IT capabilities which can be reinforced in channel processing and capability of implementing the information technology in turn and reap of the be if it that can be directly be achieved with its implementation.

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