part three: winning competitive advantages with it
TRANSCRIPT
Part three:Part three:
Winning Competitive Winning Competitive Advantages with ITAdvantages with IT
1. Case Study: UPS 1. Case Study: UPS 2. The key applications in busi2. The key applications in busi
nessness 3. Strategic Information syste3. Strategic Information syste
msms
Case: UPSCase: UPS In late 2000, best known for reliable,efficient In late 2000, best known for reliable,efficient
package delivery.package delivery. Delivery 13.6 million packages a day set by 1.8 millDelivery 13.6 million packages a day set by 1.8 mill
ion shippers to 7 million consignees.ion shippers to 7 million consignees. In 1999, its revenue is $27 billionsIn 1999, its revenue is $27 billions
IT/IS in recent decade:IT/IS in recent decade: 1990: .UPS Net1990: .UPS Net 1993: DIAD(Delivery Information Acquisition Devi1993: DIAD(Delivery Information Acquisition Devi
ce)ce) mid of 1990: API +tracking systemmid of 1990: API +tracking system By late 2000: 6 OnLine ToolsBy late 2000: 6 OnLine Tools Late of 2000: e-commerce, e-logistics+……Late of 2000: e-commerce, e-logistics+……
Case Study: UPSCase Study: UPS
What are the input, processing, and What are the input, processing, and output of UPS’s package tracking output of UPS’s package tracking system? system?
What technologies are used? How are What technologies are used? How are these technologies related to UPS’s these technologies related to UPS’s business strategy? What would happen if business strategy? What would happen if these technologies were not available?these technologies were not available?
What change in UPS management and What change in UPS management and organization when they use the package organization when they use the package tracking systems?tracking systems?
Case Study: UPSCase Study: UPS
Input:Input: Package information, customer signature, Package information, customer signature,
pickup, delivery and timecard data, data pickup, delivery and timecard data, data location(while on route), and billing and location(while on route), and billing and customer clearance document.customer clearance document.
Processing:Processing: Mainly,the data is transmitted to a central Mainly,the data is transmitted to a central
computer and stored for retrieval.computer and stored for retrieval. Output:Output:
Mostly the same data as the input----pickup and Mostly the same data as the input----pickup and delivery time, location while on route, who delivery time, location while on route, who signed for the package.signed for the package.
Case Study: UPSCase Study: UPS Technologies used include handheld computers with Technologies used include handheld computers with
devices to automatically capture shipping devices to automatically capture shipping information, barcode scanners, telecommunications information, barcode scanners, telecommunications for transmitting data, cellular phone network, and for transmitting data, cellular phone network, and computer.computer.
The strategy is still the original one:”best service and The strategy is still the original one:”best service and lowest rate”. Technology allows UPS and its lowest rate”. Technology allows UPS and its customers to always know where a package is.customers to always know where a package is.
If the technology were not available, then UPS would, If the technology were not available, then UPS would, as it has through most of its history, attempt to as it has through most of its history, attempt to provide that information to its customers, but at a provide that information to its customers, but at a high price. Note the pressure to reduce process time high price. Note the pressure to reduce process time and cycle timeand cycle time
TYPES OF INFORMATION SYSTEMS
DATA WORKERSDATA WORKERS
KIND OF SYSTEM GROUPS SERVEDKIND OF SYSTEM GROUPS SERVED
STRATEGIC LEVEL SENIOR STRATEGIC LEVEL SENIOR MANAGERSMANAGERS
MANAGEMENT LEVEL MIDDLE MANAGEMENT LEVEL MIDDLE MANAGERSMANAGERS
OPERATIONAL OPERATIONAL
OPERATIONAL LEVEL OPERATIONAL LEVEL MANAGERS MANAGERS
KNOWLEDGE LEVEL KNOWLEDGE &KNOWLEDGE LEVEL KNOWLEDGE &
SALES & MANUFACTURING FINANCE ACCOUNTING HUMANSALES & MANUFACTURING FINANCE ACCOUNTING HUMAN RESOURCESRESOURCESMARKETINGMARKETING
MAJOR TYPES OF SYSTEMSMAJOR TYPES OF SYSTEMS
TRANSACTION PROCESSING TRANSACTION PROCESSING SYSTEMS SYSTEMS (TPS)(TPS)
MANAGEMENT INFORMATION SYSTEMS MANAGEMENT INFORMATION SYSTEMS (MIS)(MIS) DECISION SUPPORT SYSTEMS DECISION SUPPORT SYSTEMS (DSS)(DSS) KNOWLEDGE WORK SYSTEMS KNOWLEDGE WORK SYSTEMS (KWS)(KWS) OFFICE AUTOMATION SYSTEMS OFFICE AUTOMATION SYSTEMS (OAS)(OAS) EXECUTIVE SUPPORT SYSTEMS EXECUTIVE SUPPORT SYSTEMS (ESS)(ESS)
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TYPICAL TPS APPLICATIONSTYPICAL TPS APPLICATIONSSales & Marketing SystemsSales & Marketing Systems
MAJOR FUNCTIONS OF SYSTEMS:MAJOR FUNCTIONS OF SYSTEMS: Sales management, market Sales management, market
research, promotion, pricing, new research, promotion, pricing, new productsproducts
MAJOR APPLICATION SYSTEMS:MAJOR APPLICATION SYSTEMS: Sales order info system, market Sales order info system, market
research system, pricing systemresearch system, pricing system
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TYPICAL TPS APPLICATIONSTYPICAL TPS APPLICATIONSManufacturing & Production SystemsManufacturing & Production Systems
MAJOR FUNCTIONS OF SYSTEMS:MAJOR FUNCTIONS OF SYSTEMS: Scheduling, purchasing, shipping, Scheduling, purchasing, shipping,
receiving, engineering, operationsreceiving, engineering, operationsMAJOR APPLICATION SYSTEMS:MAJOR APPLICATION SYSTEMS: Materials resource planning Materials resource planning
systems, purchase order control systems, purchase order control systems, engineering systems, systems, engineering systems, quality control systemsquality control systems
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TYPICAL TPS APPLICATIONSTYPICAL TPS APPLICATIONSFinance & Accounting SystemsFinance & Accounting Systems
MAJOR FUNCTIONS OF SYSTEMS:MAJOR FUNCTIONS OF SYSTEMS: Budgeting, general ledger, billing, Budgeting, general ledger, billing,
cost accountingcost accountingMAJOR APPLICATION SYSTEMS:MAJOR APPLICATION SYSTEMS: General ledger, accounts receivable, General ledger, accounts receivable,
accounts payable, budgeting, funds accounts payable, budgeting, funds management systemsmanagement systems
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TYPICAL TPS APPLICATIONSTYPICAL TPS APPLICATIONSHuman Resources SystemsHuman Resources Systems
MAJOR FUNCTIONS OF SYSTEMS:MAJOR FUNCTIONS OF SYSTEMS: Personnel records, benefits, Personnel records, benefits,
compensation, labor relations, compensation, labor relations, trainingtraining
MAJOR APPLICATION SYSTEMS:MAJOR APPLICATION SYSTEMS: Payroll, employee records, benefit Payroll, employee records, benefit
systems, career path systems, systems, career path systems, personnel training systemspersonnel training systems
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TYPICAL TPS APPLICATIONSTYPICAL TPS APPLICATIONSOther Types (e.g., University)Other Types (e.g., University)
MAJOR FUNCTIONS OF SYSTEMS:MAJOR FUNCTIONS OF SYSTEMS: Admissions, grade records, course Admissions, grade records, course
records, alumnirecords, alumniMAJOR APPLICATION SYSTEMS:MAJOR APPLICATION SYSTEMS: Registration system, student Registration system, student
transcript system, curriculum class transcript system, curriculum class control system, alumni benefactor control system, alumni benefactor systemsystem
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KNOWLEDGE LEVELKNOWLEDGE LEVEL INPUTS:INPUTS: DESIGN SPECS DESIGN SPECS PROCESSING:PROCESSING: MODELLING MODELLING OUTPUTS:OUTPUTS: DESIGNS, GRAPHICS DESIGNS, GRAPHICS USERS:USERS: TECHNICAL STAFF TECHNICAL STAFF
EXAMPLE: ENGINEERING WORK EXAMPLE: ENGINEERING WORK STATION STATION
KNOWLEDGE WORK KNOWLEDGE WORK SYSTEMS SYSTEMS (KWS)(KWS)
OFFICE AUTOMATION OFFICE AUTOMATION SYSTEMS SYSTEMS (OAS)(OAS)
TOWARD A “PAPERLESS” OFFICETOWARD A “PAPERLESS” OFFICE REDESIGN OF WORK FLOWREDESIGN OF WORK FLOW INTEGRATED SOFTWAREINTEGRATED SOFTWARE ERGONOMIC DESIGNERGONOMIC DESIGN BRIGHT, CHEERFULBRIGHT, CHEERFUL
WORK SPACEWORK SPACE
EXAMPLE: PRESENTATION GRAPHICSEXAMPLE: PRESENTATION GRAPHICS
MANAGEMENT LEVELMANAGEMENT LEVEL INPUTS:INPUTS: HIGH VOLUME DATA HIGH VOLUME DATA PROCESSING:PROCESSING: SIMPLE MODELS SIMPLE MODELS OUTPUTS:OUTPUTS: SUMMARY REPORTS SUMMARY REPORTS USERS:USERS: MIDDLE MANAGERS MIDDLE MANAGERS
EXAMPLE: ANNUAL BUDGETINGEXAMPLE: ANNUAL BUDGETING
MANAGEMENT MANAGEMENT INFORMATION SYSTEMS INFORMATION SYSTEMS
(MIS)(MIS)
STRUCTURED & SEMI-STRUCTURED & SEMI-STRUCTURED DECISIONSSTRUCTURED DECISIONS
REPORT CONTROL ORIENTEDREPORT CONTROL ORIENTED PAST & PRESENT DATAPAST & PRESENT DATA INTERNAL ORIENTATIONINTERNAL ORIENTATION LENGTHY DESIGN PROCESSLENGTHY DESIGN PROCESS
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MANAGEMENT MANAGEMENT INFORMATION SYSTEMS INFORMATION SYSTEMS
(MIS)(MIS)
MISMIS
MIS FILESMIS FILES
SALES DATA
UNIT PRODUCT COST
PRODUCT CHANGE DATA
EXPENSE DATA
MISREPORTS
MANAGERSMANAGERS
TPS
Order Processing
System
Materials Resource
Planning System
General Ledger
System
ORDER FILE
PRODUCTION MASTER FILE
ACCOUNTING FILES
TPS DATA FOR MIS APPLICATIONS
MANAGEMENT LEVELMANAGEMENT LEVEL INPUTS:INPUTS: LOW VOLUME DATA LOW VOLUME DATA PROCESSING:PROCESSING: INTERACTIVE INTERACTIVE OUTPUTS:OUTPUTS: DECISION ANALYSIS DECISION ANALYSIS USERS:USERS: PROFESSIONALS, STAFF PROFESSIONALS, STAFF
EXAMPLE: CONTRACT COST ANALYSISEXAMPLE: CONTRACT COST ANALYSIS
DECISION SUPPORT SYSTEMS DECISION SUPPORT SYSTEMS (DSS)(DSS)
FLEXIBLE, ADAPTABLE, QUICKFLEXIBLE, ADAPTABLE, QUICK USER CONTROLS INPUTS/OUTPUTSUSER CONTROLS INPUTS/OUTPUTS NO PROFESSIONAL PROGRAMMINGNO PROFESSIONAL PROGRAMMING SUPPORTS DECISION PROCESSSUPPORTS DECISION PROCESS SOPHISTICATED MODELING TOOLSSOPHISTICATED MODELING TOOLS
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DECISION SUPPORT SYSTEMS DECISION SUPPORT SYSTEMS (DSS)(DSS)
STRATEGIC LEVELSTRATEGIC LEVEL INPUTS:INPUTS: AGGREGATE DATA AGGREGATE DATA PROCESSING:PROCESSING: INTERACTIVE INTERACTIVE OUTPUTS:OUTPUTS: PROJECTIONS PROJECTIONS USERS:USERS: SENIOR MANAGERS SENIOR MANAGERS
EXAMPLE: 5 YEAR OPERATING PLANEXAMPLE: 5 YEAR OPERATING PLAN
EXECUTIVE SUPPORT EXECUTIVE SUPPORT SYSTEMS SYSTEMS (ESS)(ESS)
TOP LEVEL MANAGEMENTTOP LEVEL MANAGEMENT DESIGNED TO THE INDIVIDUALDESIGNED TO THE INDIVIDUAL TIES CEO TO ALL LEVELSTIES CEO TO ALL LEVELS VERY EXPENSIVE TO KEEP UPVERY EXPENSIVE TO KEEP UP EXTENSIVE SUPPORT STAFFEXTENSIVE SUPPORT STAFF
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EXECUTIVE SUPPORT EXECUTIVE SUPPORT SYSTEMS SYSTEMS (ESS)(ESS)
INTERRELATIONSHIPS AMONG INTERRELATIONSHIPS AMONG SYSTEMSSYSTEMS
ESS
TPSKWS
OAS
DSSMIS
SYSTEMS FROM A SYSTEMS FROM A FUNCTIONAL PERSPECTIVEFUNCTIONAL PERSPECTIVE
SALES & MARKETING SYSTEMSSALES & MARKETING SYSTEMS MANUFACTURING & PRODUCTION MANUFACTURING & PRODUCTION
SYSTEMSSYSTEMS FINANCE & ACCOUNTING FINANCE & ACCOUNTING
SYSTEMSSYSTEMS HUMAN RESOURCES SYSTEMSHUMAN RESOURCES SYSTEMS
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SALES & MARKETING SALES & MARKETING INFORMATION SYSTEMINFORMATION SYSTEM
SYSTEM DESCRIPTION ORGANIZATIONAL LEVEL
ORDER PROCESSING ENTER, PROCESS, TRACK ORDERS OPERATIONAL
MARKET ANALYSIS IDENTIFY CUSTOMERS & MARKETS KNOWLEDGE
PRICING ANALYSIS DETERMINE PRICES MANAGEMENT
SALES TRENDS PREPARE 5-YEAR FORECASTS STRATEGIC
MANUFACTURING MANUFACTURING INFORMATION SYSTEMINFORMATION SYSTEM
SYSTEM DESCRIPTION ORGANIZATIONAL LEVEL
MACHINE CONTROL CONTROL ACTIONS OF EQUIPMENT OPERATIONAL
COMPUTER-AIDED-DESIGN DESIGN NEW PRODUCTS KNOWLEDGE
PRODUCTION PLANNING DECIDE NUMBER, SCHEDULE OF PRODUCTS MANAGEMENT
FACILITIES LOCATION DECIDE WHERE TO LOCATE FACILITIES STRATEGIC
FINANCE & ACCOUNTING FINANCE & ACCOUNTING INFORMATION SYSTEMINFORMATION SYSTEM
SYSTEM DESCRIPTION ORGANIZATIONAL LEVEL
ACCOUNTS RECEIVABLE TRACK MONEY OWED TO FIRM OPERATIONAL
PORTFOLIO ANALYSIS DESIGN FIRM'S INVESTMENTS KNOWLEDGE
BUDGETING PREPARE SHORT TERM BUDGETS MANAGEMENT
PROFIT PLANNING PLAN LONG-TERM PROFITS STRATEGIC
HUMAN RESOURCES HUMAN RESOURCES INFORMATION SYSTEMINFORMATION SYSTEM
SYSTEM DESCRIPTION ORGANIZATIONAL LEVEL
TRAINING & DEVELOPMENT TRACK TRAINING, SKILLS, APPRAISALS OPERATIONAL
CAREER PATHING DESIGN EMPLOYEE CAREER PATHS KNOWLEDGE
COMPENSATION ANALYSIS MONITOR WAGES, SALARIES, BENEFITS MANAGEMENT
HUMAN RESOURCES PLANNING PLAN LONG-TERM LABOR FORCE NEEDS STRATEGIC
SHIPPINGSHIPPING INVENTORYINVENTORY
PLANNING & PLANNING & FORECASTINGFORECASTING
ORDER ORDER PROCESSINGPROCESSING
PRODUCTIONPRODUCTION
PROCUREMENTPROCUREMENT
ACCOUNTINGACCOUNTING
SUPPLIERSSUPPLIERSCUSTOMERSCUSTOMERS
LOGISTICS LOGISTICS SERVICESSERVICES
DISTRIBUTORSDISTRIBUTORS
INTRANETINTRANETINTRANET
SUPPLY-CHAIN SUPPLY-CHAIN MANAGEMENTMANAGEMENT
HOW INFORMATION HOW INFORMATION SYSTEMS FACILITATES SYSTEMS FACILITATES
SUPPLY CHAIN SUPPLY CHAIN MANAGEMENTMANAGEMENT
Decide when, what to produce,store, move…Decide when, what to produce,store, move… Rapidly communicate orders…Rapidly communicate orders…
Track order status…Track order status…
Check Inventory Availability, monitor levels…Check Inventory Availability, monitor levels…
Track shipments…Track shipments…
Plan production based on actual demand…Plan production based on actual demand…
Rapidly communicate product design changes…Rapidly communicate product design changes…
Provide product specifications…Provide product specifications…
Share information about defect rate, returns...Share information about defect rate, returns...
TRADITIONALTRADITIONALVIEW OF SYSTEMSVIEW OF SYSTEMS
WITHIN THE BUSINESS:WITHIN THE BUSINESS: There are There are functions, each having its uses of functions, each having its uses of information systemsinformation systems
OUTSIDE THE ORGANIZATION’S OUTSIDE THE ORGANIZATION’S BOUNDARIES:BOUNDARIES: There are customers and There are customers and vendorsvendors
FUNCTIONS TEND TO WORK IN FUNCTIONS TEND TO WORK IN ISOLATIONISOLATION
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Sales & Marketing
Accounting
Finance
Manufacturing
Human Resources
ENTERPRISE SYSTEMENTERPRISE SYSTEM
Business ProcessesBusiness Processes
Enterprise-wide Enterprise-wide Business ProcessesBusiness Processes
Vendors Customers
INDUSTRIAL NETWORKSINDUSTRIAL NETWORKS
LINK FIRMS INTO INDUSTRY-LINK FIRMS INTO INDUSTRY-WIDE SYSTEMWIDE SYSTEM
HORIZONTAL: HORIZONTAL: Link firms in same Link firms in same industry, including competitorsindustry, including competitors
VERTICAL: VERTICAL: Link firm with suppliers Link firm with suppliers in same industryin same industry
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Thanks for Your AttentionThanks for Your Attention