Coffee Constructions Australia Management - Case Study Example

MANAGEMENT BRIEF - COFFEE CONSTRUCTIONS AUSTRALIA By Name Course Instructor Institution City/State Date Table of Contents MANAGEMENT BRIEF - COFFEE CONSTRUCTIONS AUSTRALIA 1 Table of Contents 2 Executive Summary 3 Introduction 4 The Business Value Proposition of Using Best Practice Information Systems 4 How the Information Systems Could Support the Various Businesses Functional Areas 6 How to Use These Information Systems in Managing Projects 7 Conclusion 8 Recommendations 9 References 9 Appendices 11 Management Brief - Coffee Constructions Australia Executive Summary Construction projects are without a doubt exceedingly multifaceted actions that involve scores of different organisations and bodies such as inspectors, contractors and clients. Basically, poor co-ordination and integration between different professions in the construction industry are considered to be the major factor contributing to poor performance of projects. In the construction industry, utilisation of information systems (IS) is a major issue, especially for companies that seek to achieve competitive advantages and improve their construction projects effectiveness all through their life cycle. In this management report, ‘best practice’ IS that can be utilised at Coffee Constructions is suggested. The management report focuses on three themes: (i) the business value proposition of utilising the best practice IS; (ii) how the various business functional areas could be supported by the information systems; and (iii) how the information systems could be utilised by the Coffee Constructions’ project managers to manage projects. Introduction Innovative technologies are offering the construction firms with new opportunities to improve information management, collaboration and communication processes. Still, most of the business processes in the construction industry are still deeply rooted in conventional ways of exchanging information in the form of site instructions, specifications and technical drawings. According to Stewart (2007, p.512), this is attributed mainly to numerous market, industrial and historical forces, wherein the culture of the industry is perpetuated, therefore, influencing the level of IS adoption in everyday business processes. However, client needs and increasing competition have started eroding this deep-rooted culture; thus, compelling construction companies to look for efficiencies in the current practices, particularly on how information of the project is managed, manipulated and exchanged. Scott et al. (2012, p.43) argue that the Internet is the perfect channel for the integration and distribution of information across the network of organisations and groups that are participating. Therefore, the Internet has turned out to be an economical delivery system, accepted universally and close at hand. The information systems provide incomparable communication opportunities for the Coffee Constructions, especially its ability to accommodate different types of media such as objects, voice and text. The information system can enable the company to build up an information network that can be accessed cheaply using inexpensive software and hardware. The existing IS security measures ensure data integrity and protection. The Business Value Proposition of Using Best Practice Information Systems Essentially, Information Systems can be categorised as Expert Systems, Management Information Systems, as well as Transactional Processing Systems. The Management Information Systems (MIS) has a number of subcategories like Executive Information Systems (EIS) and Decision Support Systems (DSS). The DSS can be described as a computer-based system that can analyse the business data and later present it in a manner which assists the users to effectively and efficiently make business decisions. Construction projects are often peripatetic; interruptions/delays on the site are nearly inevitable and can lead to conflicting circumstances. Disputes in the industry, especially between construction parties can result in both indirect and direct losses. However, managing the conflict/dispute effectively may be realised if there is correct and reliable information. Fundamentally, the IS can create a central information repository in a secure environment, which enables every project partner to electronically transfer project information (Craig & Sommerville, 2006, p.138). Information systems have turned out to be comprehensive systems supporting the whole projects’ life cycle, project portfolios, as well as project programs. The technologies can help the firm’s project managers to plan, organise, manage, and make decisions while simultaneously evaluating as well as reporting. Kahura (2013, p.108) asserts that inability to balance scarce resources normally leads to more pressure on the company resulting in poor information quality as well as longer lead times. Therefore, the information systems could be beneficial to the firm’s project managers due to the contribution concerning project success and well-timed decision making. Utilisation of information systems as noted by Kahura (2013, p.108) is beneficial to the project managers since they improve managerial tasks’ efficiency, productivity and since decisions are made in a timelier manner. The management information systems could offer meaningful reports, which can lead to up-to-date business decisions especially when the company select a system that can meet their operational needs (Bronson, 2014). Bakis et al. (2006, p.291) argue that the main benefits of the MIS are not sourced from helping and accelerating the existing business processes, but instead by redesigning the processes in order to capitalise on the opportunities provided by the systems. Some of the information systems, such as the ERP systems are believed to be amongst the best solutions for many businesses. As mentioned by Lipaj and Davidavičienė (2013, p.41), an ERP system is beneficial because it improves the business productivity through the creation of a transaction structure, which includes the key business functions. As evidenced in appendix one, investing in ERP systems can result in tangible benefits: reduction of cycle time, indirect labour, costs and inventory; improved productivity and performance; integrated and standardised financial and human resource information; improved manufacturing process and profits, and more. On the other hand, intangible benefits that the firm could receive because of investing on IS system can be grouped into the benefits associated with the firm’s customers and internal improvements. Some of the intangible benefits that the firm can receive as a result of implementing ERP system includes; improved management decision-making, teamwork, motivation and flexibility; greater adaptability; people development; and many others (see appendix two). How the Information Systems Could Support the Various Businesses Functional Areas One of the information systems that Construction projects should adopt is the ERP system, which could cover functional areas of the organisation, such as accounting, finance, design, production, logistics, and HR. The system could help the firm to organise as well as incorporate the information flows and operation process so as to utilise the resources like money, materials and machines ideally. The ERP system according to Shi and Halpin (2008, p.218can help the company to integrate all its processes and can result in the efficiency growth. The ERP system integrates every management and enterprise functions bearing in mind that the information accuracy and accessibility are important factors in the process of decision-making that could lead to managerial benefits, improved decision-making, less inaccuracies and high profits. The ERP systems, together with standardised as well as integrated application model, could offer Coffee Constructions a tool that reduces marginal cost and IT costs, improves flexibility, and increases competence for the economic and swift adoption of novel applications. According to Zeng et al. (2012, p.89), when the structure of the organisation is changed and business processes are reengineered in line with the system’s best practices, implementing ERP may improve corporate governance, promote organisational learning, and improve employee retention and morale. Another information system that could support different business functional areas at Coffee Constructions is the Material Requirements Planning (MRP), which is a system for controlling inventory, planning and manufacturing. The MRP system as opined by Lee (2008, p.61) focuses more on inventory control as well as production scheduling. The system could enable the company to maintain sufficient inventory levels by ensuring that the needed materials can be obtained when required. The system could ensure that materials are available and the inventory is maintained at lowest possible level. The MRP can also help the company plan delivery schedules, manufacturing activities as well as procuring activities. Besides that, Knowledge is considered to be the most vital resource within an organisation; therefore, the survival of success of a company relies on how knowledge is managed effectively. Use of knowledge management systems can help the company reduce the time used to solve problems, and as a result, it improves the work quality. Knowledge can be divided into explicit and tacit (see appendix three). In the construction sector, companies are making significant efforts to create and adopt systems in order to capture, store, retrieve and manage explicit information associated with the project. The explicit information incudes; document management systems, organisation maps, procedure manuals, work breakdown structure, and so forth. Certainly, the construction projects offer numerous possible opportunities for capturing knowledge. Ability to capture and reuse this form of knowledge can help the company diminish the waste attributed to ‘reinventing the wheel’ as well as enhance the efficiency of the process. Regrettably, the construction industry depends heavily on the explicit knowledge that has been stored, but to achieve the desired competitive advantage, tacit knowledge has to be captured and reused. As asserted by Tupenaite et al. (2008, p.315), construction projects can be successful, if the company adopts knowledge management system. The significance of learning and sharing knowledge is widely acknowledged in the construction industry; therefore, scores of firms have started appointing knowledge managers or with the objective of harnessing and improving the organisational knowledge (Anumba et al., 2005, p.7). How to Use These Information Systems in Managing Projects The information systems could enable the firm’s project managers to use the common databases to have an integrated view of the main business process. The ERP system could enable the managers to track raw materials, cash for business resources, the capacity of production as well as the commitments status such as payroll and purchase orders, and other orders. The system could also enable the managers the managers to share data across different departments in the company and also to enter and retrieve information electronically (Antos, 2016, p.1311). The system could allow the managers to successfully maintain the projects’ financial information such as cash, budgets, accounts and assets. They could also use the system to manage external and internal factors that affect their projects. Furthermore, the managers could use the system to study their project’s processes as well as the performance by combining their financial information with their operational information. With regard to the MRP system, the project managers could use the system to ensure that the production materials and products are available for the projects and customers. Besides that, they can use the system to reduce waste and plan manufacturing functions. Utilisation of the MRP system can enable the company to reduce material waste and at the same time avoid the shortage of the product shortages. However, the project managers should ensure that system’s data is accurate and with no errors. In terms of knowledge management systems, the project managers could use the system to transfer knowledge since construction projects create the need for knowledge to flow in different stages. Given that there is heavy fragmentation in the construction industry, project managers can use the system to ensure a systematic flow of knowledge. Besides that, they could use the system for capturing and reusing knowledge through documentation processes and also to build best practices’ database. Moreover, the information system could be used to improve communication amongst stakeholders. Fragmentation in the construction industry has resulted in weak communication, especially between the stakeholders. A knowledge management system that is effective could help the project managers to communicate effectively across different construction project stages (Dave & Koskela, 2009, p.899). Conclusion In conclusion, the firm should adopt Information systems because they play a major role in modern-day business life. The information system as mentioned in this report could help improve the company’s strategies, targets and goals. In the construction industry, many companies have started investing in the information systems with the goal of improving their business performance. Therefore, investing in these systems could help the firm change its operational activities and processes so as to achieve higher productivity and efficiency. Adopting the information systems can contribute to improving the firm’s information processing, customer service, accounting and finance, and production processes. Recommendations In order to achieve competitive advantage, reduce costs, and manage the business effectively, Coffee Constructions Australia must embrace technology. Information systems, especially, Material Requirements Planning (MRP), Enterprise resource planning (ERP), and knowledge management systems could enable Coffee Constructions management to improve its civil projects. The company should use the knowledge management system for a number of functions such as information accumulation, knowledge supply, knowledge propagation and so forth (see appendix four). The company should implement the ERP system so as to enable the normal workers to access information; therefore, increasing authority delegation for production decisions and interaction with end users. References Antos, J., 2016. An empirical study of Enterprise Resource Planning systems in construction industry. International Research Journal of Engineering and Technology, vol. 3, no. 4, pp.1310-15. Anumba, C.J., Egbu, C.O. & Carrillo, P.M., 2005. Knowledge Management in Construction. Oxford: Blackwell Publishing Ltd. Bakis, N., Kagioglou, M. & Aouad, G., 2006. Evaluating the Business Benefits of Information Systems. In Proceedings of the 3rd International SCRI Symposium. Salford, UK, 2006. The University of Salford. Bronson, K., 2014. Deriving the Most Value From a Management Information System. [Online] Available at: http://enewsletters.constructionexec.com/managingyourbusiness/2014/08/deriving-the-most-value-from-a-management-information-system/ [Accessed 27 July 2016]. Craig, N. & Sommerville, J., 2006. Information management systems on construction projects: case reviews. Records Management Journal, vol. 16, no. 3, pp.131-48. Dave, B. & Koskela, L., 2009. Collaborative knowledge management—A construction case study. Automation in Construction, vol. 18, no. 7, pp. 894–902. Kahura, M.N., 2013. The Role of Project Management Information Systems towards the Success of a Project: The Case of Construction Projects in Nairobi Kenya. International Journal of Academic Research in Business and Social Sciences, vol. 3, no. 9, pp.104-16. Lee, I., 2008. Electronic Business: Concepts, Methodologies, Tools, and Applications: Concepts, Methodologies, Tools, and Applications. Pennsylvania, United States: IGI Global. Lipaj, D. & Davidavičienė, V., 2013. Influence of Information Systems on Business Performance. Science – Future of Lithuania , vol. 5, no. 1, pp.38–45. Nowduri, S., 2011. Management information systems and business decision making: review, analysis, and recommendations. Journal of Management & Marketing Research, vol. 7, pp.1-8. Scott, D., Kwan, M., Cheong, W. & Heng Li, 2012. Web-based construction information management systems. The Australian Journal of Construction Economics and Building, vol. 3, no. 1, pp.43-52. Shi, J.J. & Halpin, D.W., 2008. Enterprise Resource Planning for Construction Business Management. Journal of Construction Engineering and Management, vol. 2, no. 1, pp.214-21. Stewart, R.A., 2007. IT enhanced project information management in construction: Pathways to improved performance and strategic competitiveness. Automation in Construction , vol. 16, no. 4, pp. 511–517. Tupenaite, L., Kanapeckiene, L. & Naimaviciene, J., 2008. Knowledge Management Model For Construction Projects. In Proceedings Of The 8th International Conference Reliability And Statistics In Transportation And Communication. Vilnius, Lithuania, 2008. Vilnius Gediminas Technical University. Zeng, Y., Lu, Y. & Skibniewski, M.J., 2012. Enterprise Resource Planning Systems for Project-Based Firms: Benefits, Costs & Implementation Challenges. Journal for the Advancement of Performance Information and Value, vol. 4, no. 1, pp.85-96. Appendices Appendix One: Tangible benefits of an ERP system Appendix Two: Intangible benefits of an ERP system Appendix Three: Knowledge Management Model for Construction Projects Appendix Four: Knowledge management model for construction projects Read More