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Glencore Information Systems Strategy

Updated on August 15, 2017

Introduction

In this 21st century, very few businesses, especially those operating on the global platform can survive without using the business information systems. In essence, the use of Information and Communication Technologies have been very integral in effectively managing business operations, enhance decision making processes among those in managerial positions, achieve competitive advantage and also for sustenance in a global business environment. Furthermore, business information systems have facilitated both external and internal communication not only with employees but also with clients, business partners and all other stakeholders. This paper seeks to analyze the business information system for Glencore Limited, as well as the strategy employed by this firm in its information system management.

Glencore is among the largest commodity traders and producers in the world today. China is its biggest market, though it has sustainable operations in the developing world. China is the world largest consumer of aluminum, copper and iron ore. The company’s operations comprises of more than 150 oil products, metallurgical and mine operations and agricultural products. The business operations of this entity is spread around 90 nations worldwide. The company also distributes and markets a wide range of customer products and services which includes power generation, steel, food and oil products, automobile, industrial, and construction materials. The business model of this company is therefore that of vertical integration and diversification with partnerships and collaborations with traders and processors. Glencore has many production facilities in various parts of the world (Glencore, 2017).


Glencore’s Business Information System

The following figure 1.1 presents Glencore’s business information systems with its functional areas

Figure 1.1 Glencores business information system


Core Activity Systems

For Glencore, the core activity systems include operational level systems, strategic level systems and management systems. Operational systems facilitates the work of managers by keeping track of the core activities and operations of the company as well as the company transactions including sales, payroll, cash deposits, withdrawals, expenses, flow of the raw materials required and credit decisions. The main aim of systems at this level is to help respond to routine questions alongside aiding in tracking of the transaction flow throughout the organization.

The role of management-level systems is to monitor or control the activities of managers including administration and decision making. In typical sense, they provide periodic reports instead of instant information regarding the operation. For example, Glencore has a relocation control system which is responsible for reporting the total moving costs for all staff in all divisions of the company.

Last but not least, strategic level systems assist the senior management team in addressing and tackling issues pertaining to strategy as well as long term trends whether within the external or internal environment. They are more of concerning on aligning changes in the businesses external environment with the extant organizational potential.

Transaction Processing System (TPS) are considered to be so critical to a business since they serve the entity’s operational level. It is basically a computerized system which undertakes and records the day to day routine transactions that are important in running the business. The failure of TPS can lead to a halt of the business functions and operations. Some of the examples are order entry, payroll, shipping, and record keeping. Further, the TPS are needed by the management in monitoring their internal operations, alongside the relation of the firm with its external stakeholders.

Outsourced Systems

Currently, there are no systems that Glencore outsources for any of its functions. All of them are internal based and relevant expatriates hired to execute the work. This gives the company an impetus to control its systems and functions effectively without external influence.

Glencore’s Strategic Management of its information Systems

Strengths

As a leading integrated commodity marketer and dealer, Glencore has to regularly source, refine, process, store, transport, supply and finance the materials required by their various clientele in different parts of the world. In order to facilitate all these processes and their complexities, the company has incorporated some of the latest technology systems such as Oracle Exadata as a fully integrated platform to ensure optimal performance and to support the company’s growth. The Oracle Exadata provides a new platform for the company’s worldwide SAP programs and data warehouses. Also as an innovative and leading organization, Glencore has what can be called as a successful culture for performance. Therefore, by allowing and embracing novel technologies that help the company in gaining a significant competitive advantage, the firm has enabled business opportunities as well as the expansion of the business operation (Reol, 2017).

The company also partners with reliable operators to supply them with the needed systems and machines for the information systems. For instance, Tradeware, which is Glencore’s key partner in Exadata systems possess extensive experience and capabilities in delivering such equipments. Moreover, the company the company understands the key people working for Glencore, its business operations, units, technology and information requirements and all that is required by the firm. This ensures that all their systems and machines are not only to the right standard by effective in executing their functions (Reol, 2017).

Weaknesses

Despite its growth in demand and expansion, the company is yet to increase the capacity of its information systems in terms of security and confidentiality. There is no doubt that Glencore’s information systems are of high capacity, with super-fast computer systems and other systems that are sophisticated that have enhanced the smooth working of its operations (Inman, 2016). Nonetheless, the company’s security and confidentiality of its systems are wanting. For instance, during the 2015 annual report, the company attributed its marginal decline of profit to cyber attacks that had also affected many of the European companies at that time. There are also some confidentiality and security issues involving internal employees retrieving and leaking sensitive information to other parties at the disadvantage of the company. This implies a need for the company to introduce effective measures of preventing cyber attacks and guaranteeing the security of company information.

Recommendation on Effective Management of Glencore’s Information System

A number of ways can be used to mitigate the inherent and potential problems in cyber security. In this regard, Glencore should be required to put in place systems and mechanism to protect their devices against internal and external attacks. Accordingly, it is important to install relevant software including anti-virus systems, configure changes and institute guidelines that can help in preventing potential damages. The information system manager should make sure that the web-browser utilized for the company, internet or WI-FI systems are always secure. In addition, passwords should be enabled, setting up firewalls, maintenance of physical security and identifying all devices used, where they are used and who uses them.

It is also critical that Glencore hires a chief information security officer (CISO) who will be mandated to make sure that the systems are secure. The position can be stand alone, unique or fall under the department of information security management. This is because it today’s environment, cyber attacks both from internal and external perspective are imminent and that every serious organization need to be alert at all times to guard its systems from penetration. The key role of such a personnel could be management of the security, instituting security measures and codes of conduct for all employees handling information system gadgets, and driving the information technology development in the firm. Furthermore, the CISO will also aid in creating awareness to employees concerning the imminent possible attacks and how they can be avoided alongside training them on better use of the devices (Burgess, 2014). The personnel should be able to collaborate with the all the stakeholders including his juniors, the management and parties in the information security department so as to create general business value for Glencore.

Conclusion

In general, it is clear from this analysis that Glencore effectively utilizes an extensive information security system that has given it an impetus to run its operations effectively. The company harbours all the core aspects and levels of information systems including management information system, strategic information system and operation information systems. Further, the fact that the company has incorporated the latest technologies in its information systems including Oracle Extra data explains why it has continued to excel in world markets. Nonetheless, it is important for the entity to address the security concerns involving its information systems to make them more reliable and safeguard the company’s confidential data. This can be done by following the recommendations outlined above and others that may deem relevant to the company.

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