Academic journal article Journal of International Business Research

A Consideration in Developing Strategic Information Systems throughout Business Transformation: A Case Study of Seiren Co., Ltd

Academic journal article Journal of International Business Research

A Consideration in Developing Strategic Information Systems throughout Business Transformation: A Case Study of Seiren Co., Ltd

Article excerpt

INTRODUCTION AND OBJECTIVES

One of the critical issues of any corporation is how it continues to grow and perform successfully. Among stakeholders including customer, shareholders and employees even if they have different and sometimes opposing interests, a lasting positive performance is assumed as a common goal. Under the globalization of competition, ceaseless technological innovations and diversification of customers' needs, companies are forced to reconstruct their business system in order to survive and prosper.

In this paper, we focus on the management of corporate information systems (IS) in large companies during the period of business transformation. Some researchers pointed out that some researchers pointed out that IS is one of disablers of business transition (Allen & Boynton, 1991; Prahalad & Krishnan, 2008). The purpose of this case study is to find clues of theoretical hypothesis that answer the question how firms develop and maintain their IS which provide them with competitive advantages. IS play a critical role in the overall structure of the business system. The transformation from one particular business system to another is caused by various factors such as globalization and diversification of business, changeover of business category, restructuring and corporate reengineering. In most cases, these transformations require and entail the review of existing IS. At the same time, a review of IS also influences business system. There is interrelated influence between IS and the business system (Inoue, 1998).

LITERATURE REVIEW

One method that business undertakes in order to gain competitive advantage is to establish a review of IS. However, establishing a competitive advantage is not solely done by the introduction of new IS itself, although, in recent years, it is becoming more difficult to complete various business tasks without utilizing IS. For instance, the introduction and management of IS has flourished in human resource management and in accounting. In the same way, production planning and supply chain management also requires IS for controlling the flow of both information and goods. IS are necessary and common place, but, the question of whether IS could be a source of competitive advantages or not remain inconclusive in existing literature. On the one hand, some literature suggest that even though it is a business requirement, IS are becoming a commodity without the rarity that is a condition of being a resource of competition advantage thereby diminishing its strategic value (Carr 2003, 2004, 2005, 2008).

Since the 1990s, the effectiveness of outsourcing in order to enhance its core business has received significant attention (e.g., Quinn, 1992). Kotabe & Helsen (2008) pointed out that the cutting costs and focus on core competencies, the use of special expertise and intention to expand sales and profits as the main reason why companies outsource, and that the same is true of IS outsourcing. They also note that especially in Japan by recession, corporate is forced to explore cost savings methods by IS outsourcing.

IS outsourcing has widely penetrated as a basic strategy since 1990s (Dibbern, Goles, Hirschheim & Jayatilaka, 2004; Gonzalez Gasco & Llopis, 2006; Lacity, Khan & Willcocks, 2009). Also King & Malhotra (2000) make specific references to particular functions within IS which tend to be outsourced. Akomode et al. (1998) describes this type of outsourcing as a basic strategy for developing IS for several reasons; cost reduction, inefficiency of developing IS within a company and a lack of technological ability. Since 1990s, IS departments in many Japanese firms have taken a less hands-on approach to IS preferring to out-source roles which includes planning, constructing, designing, developing, implementing and maintaining to outside specialized companies such as "service providers" like IBM, in whole or in part, otherwise sale the IS department or form a capital alliance with a specialized affiliate company. …

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