Managing Strategic use of IT at Nestle

Managing Strategic use of IT at Nestle2013

ContentsChapter 1.0: Managing Strategic Use of IT: Nestle21.1 Introduction21.2 Workforce Management21.2.1 Recruitment21.2.2 Collaboration31.2.3 Training and Development41.3 Product Development51.3.1 Research and Development51.3.2 E-Supply Chain Management51.4 Enterprise Resource Planning (ERP)71.5 The Nestle Online Store71.6 Conclusion8References9

Chapter 1.0: Managing Strategic Use of IT: Nestle1.1 IntroductionStrategic management; a terminology so ancient, it cuts across the business and military worlds. Birnbaum (1984), Hoskin et al. (1997) and Fergerson (2012) explain that the word strategy roots from the greek work Strategos, which refers to a general who leads an army. They furthermore mention that stratego is planning the destruction of enemies via the effective use of resources. The interesting aspect of information technology (IT) is that it is on its own a strategic management tool which business leaders use to attain a competitive advantage. To attain the yearned for competitive advantage, business leaders have to manage the use of IT strategically; which means using it effectively, efficiently to discover what is advantageous and capitalize on it. In this section of the document, researchers discuss how Nestle strategically manages the use of Information Technology on different aspects of the Companys operation;1.2 Workforce ManagementCoffman (2000), Breitfelfer and Dowling (2008) as well as Duncan (2013) agree that people are a Companys greatest asset. This of course is factual to some extent, however researchers of this document agree with Drucker (2002) who states that people can be both a liability and an asset. Meaning to say that skilled and committed employees are assets while poor performing employees are definitely a liability; this explains the importance of Companies using far-reaching approaches to attract, select, hire, manage and retain their best talent; 1.2.1 Recruitment In order to attract best talent, like other macro Companies, Nestle uses their website to recruit. Nestle uses their website http://www.nestle.com/jobs to reach out to graduates at entry level and experienced professionals. The website consists of information pertaining to why work at Nestle, opportunities for career growth and vacant positions. The website also provides Frequently Asked Questions (FAQ) on how to apply and get a job at Nestle. The advantage of this is that Nestle broadens the scope of applicants such that they are not limited to a particular geographic location and as thus the Company receives a significant number of applications to select the best talent from;Figure 1.0 shows the http://www.nestle.com/jobs website;

Figure 1.0; shows the http://www.nestle.com/jobs website; Source; Nestle (2013)Plessis and Frederick (2012) states that; the era of electronic recruitment (e-recruitment) is upon us. Not only does this eliminate the issue of geographic limitations, it is time saving, applications are accessible 24/7; it is cheaper and allows easy storage of applicants information. 1.2.2 Collaboration Nestle (2006) states that people are the Companys greatest asset, it is mentioned that Nestle is a human company which even though operates internationally remains close-knit. Having such a united Company is attained via different methods, one which would be discussed later; E-collaboration. E-collaboration connects Nestle with its stakeholders via the web and within this application; Nestle has implemented MyCollaboration which allows employees to make E-Collaboration even stronger. The point researchers are making is that Nestle uses Information Systems to recruitment and also hear from their employees which is motivational to employees.1.2.3 Training and Development According to Nestle (2002), not only does the Company use information systems for recruitment, Nestle also uses the company for training and development of their employees. It is stated that using information technology, Nestle appoints corporate training specialists in distance e-learning, allowing staff to tailor their learning to their specific needs and time constraints. Nestle uses WebAula, the largest e-learning systems provider in Brazil. As shown by Nestle (2006), the Company integrates this system with its internal systems to provide training to its staff members across the globe. This is a co-sourcing approach. Many companies today outsource Information Systems; it is advantageous that Nestle co-sources some of its information systems. As shown by Weald IT Professional Services (2011), Co-sourcing minimizes risks and brings in transparency, clarity and better control over processes. It is important to understand that Nestle is a food and Beverages Company, Co-sourcing e-learning allows for Nestle to specialize on the food and beverages while controlling the training and development of their employees. Derouin et al. (2011) argues that e-learning makes training programs accessible to macro Organizations employees across the globe; this means that Nestle saves money as opposed to transporting their employees or trainers. This also contributes to saving the environment via reduced carbon-print. Schlichter (2013), states that one of the aspects of going green is travelling when necessary as the carbon-dioxide from planes and cars contribute to global warming. In a nutshell, Nestle uses information system to recruit, train and develop their employees. This broadens horizons for attaining the best talent and developing the talent, furthermore Nestle uses information system to hear from their employees which is quite motivational to the employees.

1.3 Product Development1.3.1 Research and Development As a quality centric Company, Nestle focuses a lot on producing outstanding and healthy foods and beverages. As shown at Nestle (2013), Quality assurance and product safety is one of Nestls 10 Corporate Principles. In order to attain quality, Nestle invests quite a lot on Research and Development. Nestle has opened a System Technology Center (STC) in Switzerland that consolidates in one website the expertise used to combine products, capsules and machines such as those used in itsNespressoandNescaf Dolce Gustobeverage systems. This information system serves as a guide to Nestle operations across the globe on manufacturing products; the raw materials required making those products and the recipes. Having this information system allows for standardized Nestle products across the globe. This of course ensures quality and as thus attains new customers and keeps current customers loyal, this generates more income and as thus increased profits. In a nutshell, information systems aid Nestle from idea generation, to manufacturing as well as distribution. Research attains Nestle a competitive advantage such that their products are standardized and up to consumers standard. As shown at Nestle (2013), Nestl Product Technology Centres (PTC) develop innovative technologies and manufacturing processes that are the basis of new product development, and implement these technologies to the companys operations. The website is somewhat an Expert Information System in the sense that Nestle researchers formulates ways of manufacturing the product and share that with other departments of the Company. 1.3.2 E-Supply Chain Management According to Handfield (2011), supply chain management refers to the entire chain of activities involved in delivering products to the final consumer. Organizations in a supply chain are linked together via physical flows as well as communication flows. Electronic Supply Chain Management (E-Supply chain management) is the involvement of information systems in the supply chain. According to the Times (100), Nestle requires a first class supply chain management, with high quality linkages from the suppliers to the consumers. According to Nestle (2013), the Companys supply chain management includes the following; Figure 1.1; shows an abstract of Nestls supply chain management website; Source; Nestle (2013)Procurement includes the attainment of raw materials from suppliers; for example in making Nescafe, coffee is procured from farmers via different media. After the delivery of the Nescafe raw materials, they are delivered to plants where they are transformed to Nescafe following the standards outlined on the System Technology Center (STC) web information system. After Nescafe is manufactured, it is then transported to customers across the globe and then the Company is liable to provide post sales customer service. At Nestle (2013), supply chain management is explained as the heart of the Company, this shows how critical it is for all stakeholders to actually be acquainted with the status quo pertaining to the product. In order to achieve this, Nestle uses information systems such as the E-collaboration which connects all stakeholders and gives employees the opportunity to point out improvement suggestions. Another supply chain management software used by Nestle as shown at Powersim (2012) is a development by SAP and Powersim. This is business simulation software that allows Nestle to make more intelligent decisions about allocation of resources in smoothing out the supply chain process. Capturing the researchers discussion thus far, Nestle uses information system to attain the best talents who would use other information systems to manufacture quality products after which other information systems are used to disperse of the finished products. 1.4 Enterprise Resource Planning (ERP)As mentioned earlier, Nestle is about standardization; which is why the Company setup training and development programs for their staff across the globe and also consolidates Research and development center. As a global power, it is important for Nestle to manage its operation across the globe. To achieve this, the Company signed a contract with SAP solutions to create and maintain an ERP for its global enterprise. As shown by Worthen (2002), this information system helps Nestle centralize a conglomerate that owns 200 operating companies and subsidiaries in 80 countries. This ERP system helps Nestle to monitor and measure its global power. 1.5 The Nestle Online StoreAside the above discussed information systems; Nestle also has the online store which sells a variety of Nestle products.

Figure 1.1; shows the Nestle online store; Source; Nestle (2013)As aforementioned, Nestle is a global super power, and as a result is only makes sense that the Company has an online store as well as the brick and mortar operations. As a click and mortar, Nestle is able to reach out to consumers across the globe; this also includes aspects of supply chain management discussed above. The Nestle online store is one of the factors of the Company that attains Nestle a competitive advantage; the store eliminates the geographic limitations faced by the brick and mortar operations; online customers can be located from anywhere across the globe. Furthermore, brick and mortar stores have strict operations hours while the online store is 24*7, this increases sales and as thus generation of income. The online store also benefits customers in the sense that there is no need for travel in order to get their Nestle products; customers can just order the products from the convenience of their own homes!The Nestle online store is an information system in 2 aspects; it is a transaction processing system (TPS). To buy online, a customer selects the wanted products and the TPS computes the transaction from calculation of the price to payment. Also, the online system consists of a database which stores customers information, this allows for the Company to generate reports that helps management make decisions; this also serves a decision support system used by management to make strategic business decisions. 1.6 Conclusion After the conducted research, it is no surprise to the developer that Nestle is a global super power. This is because the Company has managed to strategically use Information Technology to exhaust the use of its resource and capitalize on their global stature. Nestle has made a realization, that total quality management roots from attaining the best people for the job to running the operations. Nestle uses information system to attract, train and develop talent as well as to collaborate stakeholders of the company. Furthermore, Nestle capitalizes on the information technology by investing on research and development; this birthed the Enterprise Resource planning system to conglomerate its operations across the globe. Another information system that is dear to Nestle is the online store. In a nutshell, Nestle uses information systems to manage workforce, to develop and sell their products as well as to manage its global operations; this attains Nestle the best brains to run the Company, the right standards to ensure quality as well as its maintenance of being a global giant.ReferencesPlessis, A, J and Frederick, H., 2012 SCIENCE JOURNAL OF BUSINESS MANAGEMENT, Effectiveness of e-recruiting: empirical evidence from the Rosebank business cluster in Auckland, New Zealand, 2012 (126), pp 1-19 Derouin, E, R, Fritzsche, B, A and Salas, E., 2011 JOURNAL OF MANAGEMENT, E-Learning in Organizations, 31 (920), pp 921-940Birnbaum, P, H.., 1984 IEEE TRANSACTIONS ON ENGINEERING MANAGEMENT, Strategic Management of Industrial Technology: A Review of the Issues, EM-31 (4), pp 186-191Hoskin, K., Macve, R and Stone, J., 1997, The Historical Genesis of Modern Business and Military Strategy: 1850 - 1950, 2010 8th Interdisciplinary Perspectives on Accounting Conference, pp. 1-5. Available from http://laisumedu.org/DESIN_Ibarra/salon/apoyo/hoskin.PDF [7-9 July, 1997] Accessed on October 11, 2013, 18:25 PMFergerson, B, (2012). Key Stages of Strategic Information System Planning (SISP) Methods and Alignment to Strategic Management Planning Concepts. Available from: https://scholarsbank.uoregon.edu/xmlui/bitstream/handle/1794/12255/Fergerson2012.pdf?sequence=1 Accessed on October 11, 2013, 14:17 PMDuncan, R, D, (2013). Nine Ways to keep your Companys most Valuable Asser-its Employees. Available from: http://www.forbes.com/sites/forbesleadershipforum/2013/08/20/nine-ways-to-keep-your-companys-most-valuable-asset-its-employees/ Accessed on October 11, 2013, 18:11 PMDrucker, P., 1984 HARVARD BUSINESS REVIEW, They are not Employees-they are People, Available from: http://www.peowebhr.com/Newsreleases/Harvard%20Business%20Review.pdf Accessed on October 12, 2013, 13:03 PMBreitfelder, M, D and Dowling, D, W., 1984 HARVARD BUSINESS REVIEW, Why Did we ever go into HR? Available from: http://hbr.org/2008/07/why-did-we-ever-go-into-hr/ar/ Accessed on October 12, 2013, 13:03 PMNestle, (2006). The World of Nestle. Available from: http://www.nestle.it/asset-library/Documents/pdf_nostri_report/12_TheworldofNestle.pdf Accessed on October 11, 2013, 18:11 PMNestle, (2013). Nestle, Good Food, Good Life. Available from: http://www.nestle.com/ Accessed on October 11, 2013, 18:13 PMWeald IT Services, 2011, Co-Sourcing Your IT Available from: http://www.wealdcomputers.com/wp-content/uploads/2011/11/Weald-IT-Brochure.pdf Accessed on October 9, 2013, 11:23 PMHandfield, R., 2011, what is Supply Chain Management Available from: http://scm.ncsu.edu/scm-articles/article/what-is-supply-chain-management Accessed on October 9, 2013, 13:29 PMThe Times 100, 2013 THE TIMES 100, Coffee, the Supply Chain: A Nestle Case Study Available from: http://businesscasestudies.co.uk/nestle/coffee-the-supply-chain/introduction.html#axzz2heLqRgg0 Accessed on October 12, 2013, 13:03 PMPowersim Solutions, 2012 Case Study: Nestle Available from: http://www.powersimsolutions.com/Nestle.aspx Accessed on October 12, 2013, 17:08 PMWorthen, B., 2002, NestleS Enterprise Resource Planning (ERP) Odyssey Available from: http://www.cio.com/article/31066/Nestl_eacute_s_Enterprise_Resource_Planning_ERP_Odyssey Accessed on October 12, 2013, 15:07 PM

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