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Part three: Winning Competitive Advantages with IT

Part three: Winning Competitive Advantages with IT. 1. Case Study: UPS 2. The key applications in business 3. Strategic Information systems. Case: UPS. In late 2000, best known for reliable,efficient package delivery.

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Part three: Winning Competitive Advantages with IT

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  1. Part three:Winning Competitive Advantages with IT

  2. 1. Case Study: UPS • 2. The key applications in business • 3. Strategic Information systems

  3. Case: UPS • In late 2000, best known for reliable,efficient package delivery. • Delivery 13.6 million packages a day set by 1.8 million shippers to 7 million consignees. • In 1999, its revenue is $27 billions • IT/IS in recent decade: • 1990: .UPS Net • 1993: DIAD(Delivery Information Acquisition Device) • mid of 1990: API +tracking system • By late 2000: 6 OnLine Tools • Late of 2000: e-commerce, e-logistics+……

  4. Case Study: UPS • What are the input, processing, and output of UPS’s package tracking system? • What technologies are used? How are these technologies related to UPS’s business strategy? What would happen if these technologies were not available? • What change in UPS management and organization when they use the package tracking systems?

  5. Case Study: UPS • Input: • Package information, customer signature, pickup, delivery and timecard data, data location(while on route), and billing and customer clearance document. • Processing: • Mainly,the data is transmitted to a central computer and stored for retrieval. • Output: • Mostly the same data as the input----pickup and delivery time, location while on route, who signed for the package.

  6. Case Study: UPS • Technologies used include handheld computers with devices to automatically capture shipping information, barcode scanners, telecommunications for transmitting data, cellular phone network, and computer. • The strategy is still the original one:”best service and lowest rate”. Technology allows UPS and its customers to always know where a package is. • If the technology were not available, then UPS would, as it has through most of its history, attempt to provide that information to its customers, but at a high price. Note the pressure to reduce process time and cycle time

  7. KIND OF SYSTEM GROUPS SERVED STRATEGIC LEVEL SENIOR MANAGERS MANAGEMENT LEVEL MIDDLE MANAGERS KNOWLEDGE LEVEL KNOWLEDGE & DATA WORKERS OPERATIONAL OPERATIONAL LEVEL MANAGERS SALES & MANUFACTURING FINANCE ACCOUNTING HUMAN MARKETING RESOURCES TYPES OF INFORMATION SYSTEMS

  8. MAJOR TYPES OF SYSTEMS • TRANSACTION PROCESSING SYSTEMS (TPS) • MANAGEMENT INFORMATION SYSTEMS (MIS) • DECISION SUPPORT SYSTEMS (DSS) • KNOWLEDGE WORK SYSTEMS (KWS) • OFFICE AUTOMATION SYSTEMS (OAS) • EXECUTIVE SUPPORT SYSTEMS (ESS) *

  9. TYPICAL TPS APPLICATIONSSales & Marketing Systems MAJOR FUNCTIONS OF SYSTEMS: • Sales management, market research, promotion, pricing, new products MAJOR APPLICATION SYSTEMS: • Sales order info system, market research system, pricing system *

  10. TYPICAL TPS APPLICATIONSManufacturing & Production Systems MAJOR FUNCTIONS OF SYSTEMS: • Scheduling, purchasing, shipping, receiving, engineering, operations MAJOR APPLICATION SYSTEMS: • Materials resource planning systems, purchase order control systems, engineering systems, quality control systems *

  11. TYPICAL TPS APPLICATIONSFinance & Accounting Systems MAJOR FUNCTIONS OF SYSTEMS: • Budgeting, general ledger, billing, cost accounting MAJOR APPLICATION SYSTEMS: • General ledger, accounts receivable, accounts payable, budgeting, funds management systems *

  12. TYPICAL TPS APPLICATIONSHuman Resources Systems MAJOR FUNCTIONS OF SYSTEMS: • Personnel records, benefits, compensation, labor relations, training MAJOR APPLICATION SYSTEMS: • Payroll, employee records, benefit systems, career path systems, personnel training systems *

  13. TYPICAL TPS APPLICATIONSOther Types (e.g., University) MAJOR FUNCTIONS OF SYSTEMS: • Admissions, grade records, course records, alumni MAJOR APPLICATION SYSTEMS: • Registration system, student transcript system, curriculum class control system, alumni benefactor system *

  14. KNOWLEDGE WORK SYSTEMS (KWS) KNOWLEDGE LEVEL • INPUTS: DESIGN SPECS • PROCESSING: MODELLING • OUTPUTS: DESIGNS, GRAPHICS • USERS: TECHNICAL STAFF EXAMPLE: ENGINEERING WORK STATION

  15. OFFICE AUTOMATION SYSTEMS (OAS) • TOWARD A “PAPERLESS” OFFICE • REDESIGN OF WORK FLOW • INTEGRATED SOFTWARE • ERGONOMIC DESIGN • BRIGHT, CHEERFUL WORK SPACE EXAMPLE: PRESENTATION GRAPHICS

  16. MANAGEMENT INFORMATION SYSTEMS (MIS) MANAGEMENT LEVEL • INPUTS: HIGH VOLUME DATA • PROCESSING: SIMPLE MODELS • OUTPUTS: SUMMARY REPORTS • USERS: MIDDLE MANAGERS EXAMPLE: ANNUAL BUDGETING

  17. MANAGEMENT INFORMATION SYSTEMS (MIS) • STRUCTURED & SEMI-STRUCTURED DECISIONS • REPORT CONTROL ORIENTED • PAST & PRESENT DATA • INTERNAL ORIENTATION • LENGTHY DESIGN PROCESS *

  18. TPS MIS SALES DATA Order Processing System UNIT PRODUCT COST ORDER FILE Materials Resource Planning System MIS REPORTS PRODUCT CHANGE DATA PRODUCTION MASTER FILE General Ledger System EXPENSE DATA MANAGERS ACCOUNTING FILES MIS FILES TPS DATA FOR MIS APPLICATIONS

  19. DECISION SUPPORT SYSTEMS (DSS) MANAGEMENT LEVEL • INPUTS: LOW VOLUME DATA • PROCESSING: INTERACTIVE • OUTPUTS: DECISION ANALYSIS • USERS: PROFESSIONALS, STAFF EXAMPLE: CONTRACT COST ANALYSIS

  20. DECISION SUPPORT SYSTEMS (DSS) • FLEXIBLE, ADAPTABLE, QUICK • USER CONTROLS INPUTS/OUTPUTS • NO PROFESSIONAL PROGRAMMING • SUPPORTS DECISION PROCESS • SOPHISTICATED MODELING TOOLS *

  21. EXECUTIVE SUPPORT SYSTEMS (ESS) STRATEGIC LEVEL • INPUTS: AGGREGATE DATA • PROCESSING: INTERACTIVE • OUTPUTS: PROJECTIONS • USERS: SENIOR MANAGERS EXAMPLE: 5 YEAR OPERATING PLAN

  22. EXECUTIVE SUPPORT SYSTEMS (ESS) • TOP LEVEL MANAGEMENT • DESIGNED TO THE INDIVIDUAL • TIES CEO TO ALL LEVELS • VERY EXPENSIVE TO KEEP UP • EXTENSIVE SUPPORT STAFF *

  23. ESS INTERRELATIONSHIPS AMONG SYSTEMS MIS DSS KWS OAS TPS

  24. SYSTEMS FROM A FUNCTIONAL PERSPECTIVE • SALES & MARKETING SYSTEMS • MANUFACTURING & PRODUCTION SYSTEMS • FINANCE & ACCOUNTING SYSTEMS • HUMAN RESOURCES SYSTEMS *

  25. SALES & MARKETING INFORMATION 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

  26. MANUFACTURING INFORMATION 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

  27. FINANCE & ACCOUNTING INFORMATION 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

  28. HUMAN RESOURCES INFORMATION 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

  29. ORDER PROCESSING PLANNING & FORECASTING CUSTOMERS SUPPLIERS PROCUREMENT ACCOUNTING INTRANET INTRANET PRODUCTION LOGISTICS SERVICES INVENTORY SHIPPING DISTRIBUTORS SUPPLY-CHAIN MANAGEMENT

  30. HOW INFORMATION SYSTEMS FACILITATES SUPPLY CHAIN MANAGEMENT

  31. Decide when, what to produce,store, move… • Rapidly communicate orders… • Track order status… • Check Inventory Availability, monitor levels… • Track shipments… • Plan production based on actual demand… • Rapidly communicate product design changes… • Provide product specifications… • Share information about defect rate, returns...

  32. TRADITIONAL VIEW OF SYSTEMS • WITHIN THE BUSINESS: There are functions, each having its uses of information systems • OUTSIDE THE ORGANIZATION’S BOUNDARIES: There are customers and vendors FUNCTIONS TEND TO WORK IN ISOLATION*

  33. Manufacturing Accounting Business Processes Enterprise-wideBusiness Processes Finance Human Resources Sales & Marketing ENTERPRISE SYSTEM Vendors Customers

  34. INDUSTRIAL NETWORKS LINK FIRMS INTO INDUSTRY-WIDE SYSTEM • HORIZONTAL: Link firms in same industry, including competitors • VERTICAL: Link firm with suppliers in same industry *

  35. Thanks for Your Attention

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