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  1. Session 3 Winning Competitive Advantages with IT

  2. 1. Case Study: UPS 2. The key applications in business 3. Strategic Information systems 4. Summary of how IT can be used to implement Competitive Advantages 5. Discussion: IT is no longer important

  3. Case: UPS(联合包裹服务 ) • In late 2000, best known for reliable,efficient package delivery. • Delivery 13.6 million packages a day set by 1.8 million shippers (发货人)to 7 million consignees(收货人). • 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(条码扫描器), telecommunications for transmitting data, cellular phone network, and computer. • The strategy is still the original one:”best service and lowest rate”(最好的服务,最低的价格). 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. Session 3: Winning Competitive Advantages with IT 1. Case Study: UPS 2.The key applications in business 3. Strategic Information systems 4. Summary of how IT can be used to implement Competitive Advantages 5. Discussion: IT is no longer important?

  8. 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

  9. MAJOR TYPES OF SYSTEMS • TRANSACTION PROCESSING SYSTEMS (TPS-事务处理) • MANAGEMENT INFORMATION SYSTEMS (MIS-管理信息系统) • DECISION SUPPORT SYSTEMS (DSS-决策支持系统) • KNOWLEDGE WORK SYSTEMS (KWS-知识工作系统) • OFFICE AUTOMATION SYSTEMS (OAS-办公自动化系统) • EXECUTIVE SUPPORT SYSTEMS (ESS-经理支持系统) *

  10. TYPICAL TPS(事务处理) 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 *

  11. 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 *

  12. 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 *

  13. 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 *

  14. 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 *

  15. KNOWLEDGE WORK SYSTEMS (KWS-知识工作系统) KNOWLEDGE LEVEL • INPUTS: DESIGN SPECS • PROCESSING: MODELLING • OUTPUTS: DESIGNS, GRAPHICS • USERS: TECHNICAL STAFF EXAMPLE: ENGINEERING WORK STATION( CAD )

  16. OFFICE AUTOMATION SYSTEMS (OAS-办公自动化系统) • TOWARD A “PAPERLESS” OFFICE • REDESIGN OF WORK FLOW • INTEGRATED SOFTWARE • ERGONOMIC DESIGN • BRIGHT, CHEERFUL WORK SPACE EXAMPLE: PRESENTATION GRAPHICS

  17. MANAGEMENT INFORMATION SYSTEMS (MIS-管理信息系统) MANAGEMENT LEVEL • INPUTS: HIGH VOLUME DATA • PROCESSING: SIMPLE MODELS • OUTPUTS: SUMMARY REPORTS • USERS: MIDDLE MANAGERS EXAMPLE: ANNUAL BUDGETING(年度预算等)

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

  19. 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(事务处理系统) DATA FOR MIS(管理信息系统) APPLICATIONS

  20. DECISION SUPPORT SYSTEMS (DSS-决策支持系统) MANAGEMENT LEVEL • INPUTS: LOW VOLUME DATA • PROCESSING: INTERACTIVE • OUTPUTS: DECISION ANALYSIS • USERS: PROFESSIONALS, STAFF EXAMPLE: CONTRACT COST ANALYSIS

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

  22. EXECUTIVE SUPPORT SYSTEMS (ESS-经理支持系统) STRATEGIC LEVEL • INPUTS: AGGREGATE DATA • PROCESSING: INTERACTIVE • OUTPUTS: PROJECTIONS • USERS: SENIOR MANAGERS EXAMPLE: 5 YEAR OPERATING PLAN

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

  24. ESS INTERRELATIONSHIPS AMONG SYSTEMS MIS DSS KWS OAS TPS

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

  26. 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

  27. 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

  28. 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

  29. 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

  30. ORDER PROCESSING PLANNING & FORECASTING CUSTOMERS SUPPLIERS PROCUREMENT ACCOUNTING INTRANET INTRANET PRODUCTION LOGISTICS SERVICES INVENTORY SHIPPING DISTRIBUTORS SUPPLY-CHAIN MANAGEMENT供应链管理)

  31. HOW INFORMATION SYSTEMS FACILITATES SUPPLY CHAIN MANAGEMENT • 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(企业内部采用职能信息系统) • OUTSIDE THE ORGANIZATION’S BOUNDARIES: There are customers and vendors FUNCTIONS TEND TO WORK IN ISOLATION(传统上的系统是相互孤立的)*

  33. Manufacturing Accounting Business Processes Enterprise-wideBusiness Processes Finance Human Resources Sales & Marketing ENTERPRISE SYSTEM(企业系统) Vendors Customers

  34. INDUSTRIAL NETWORKS(行业网络) LINK FIRMS INTO INDUSTRY-WIDE SYSTEM(构成行业级的系统) • HORIZONTAL: Link firms in same industry, including competitors • VERTICAL: Link firm with suppliers in same industry *

  35. Session 3: Winning Competitive Advantages with IT 1. Case Study: UPS 2. The key applications in business 3. Strategic Information systems 4. Summary of how IT can be used to implement Competitive Advantages 5. Discussion: IT is no longer important?

  36. SABRE Evolved 从Sabre公司的网站可以看到,Sabre公司目前拥有三大块核心业务:一是知名在线旅行服务网站Travelocity(www.travelocity.com);二是为旅游分销代理商、旅游产品供应商以及相关政府机构提供服务的大型分销系统网络(Sabre Travel Network),GDS业务就是其中重要的业务核心之一;三是致力于为航空公司、机场以及相关政府机构提供运营优化、降低成本方面的解决方案和服务的Sabre Airline Solutions • 1960s, Began as inventory-management tool----technical change. • By mid-1970s, as control centre----- flight resource planning, AA management change • Installed SABRE terminal in travel agencies. As travel-industry distribution mechanism---- transform the marketing and distribution of airline services. • Today, as electronic travel supermarket ----SABRE Travel Information Network.

  37. Information as Strategic Resource • 1950s: TECHNICAL CHANGES • Data Processing (DP) era • 60s-70s: MANAGERIAL CONTROL • Management Information Systems (MIS) era • 80s-90s: INSTITUTIONAL CORE ACTIVITIES • Strategic Information Systems (SIS) era * GROWING IMPORTANCE

  38. Evolve Role of Information Systems

  39. Strategic Role of Information Systems • Strategic Information Systems(战略信息系统): • Can change goals, operations, products, services, environment TO gain competitive advantage

  40. Session 2: Winning Competitive Advantages with IT 1. Case Study: UPS 2. The key applications in business 3. Strategic Information systems 4. Summary of how IT can be used to implement Competitive Advantages 5. Discussion: IT is no longer important?

  41. BUSINESS LEVELS STRATEGY AND INFORMATION TECHNOLOGY STRATEGIES MODELS IT TECHNOLOGIES INDUSTRY COOPERATION vs COMPETITION COMPETITIVE FORCES MODEL ELECTRONIC TRANSACTIONS COMMUNICATIONS NETWORKS INTERORGANIZATIONAL SYSTEMS LICENSING NETWORK ECONOMIES INFORMATION PARTNERSHIPS STANDARDS FIRM SYNERGY CORE COMPETENCY KNOWLEDGE SYSTEMS CORE COMPETENCIES ORGANIZATIONAL SYSTEMS LOW COST VALUE CHAIN ANALYSIS DATAMINING BUSINESS DIFFERENTIATION IT-BASED PRODUCTS / SERVICES SCOPE INTERORGANIZATIONAL SYSTEMS SUPPLY CHAIN MANAGEMENT EFFICIENT CUSTOMER RESPONSE 行业级战略 企业集团级战略 业务级战略

  42. BUSINESS LEVELS(业务级) STRATEGY AND INFORMATION TECHNOLOGY • VALUE CHAIN ANALYSIS(价值链模型): Highlights Activities that add Margin of Value to Product or Service • DATAMINING: Analysis of Data to Find Patterns & Rules to Guide Decision Making *

  43. Sales and Outbound Inbound Operations Service 基本价值 活动 Logistic Logistic Marketing Service Repair Order processing Shipping Materials Handling Delivery Manufacturing Parts assembly Advertising Promotion Value Chain Model波特(Porter的价值链模型) 支持价值 活动 Administration and Management Human Resource Technology Procurement

  44. How Technology Support Value Activities

  45. How Technology Support Secondary Activities

  46. Firm-level(企业集团级) Strategy and Information Technology • Optimum Operations • Synergies(协同): When outputs of some unites can be used as inputs to other unites, then unique nonmarket relationships can lower costs and generate profits. • How Can IT be used strategically here?----To tie together the operations of disparate business units so that they can act as a whole.

  47. MRPII(Manufacturing Resource Planning) 合格供应商 价格手册 CUSM PURM 订单 MRPM 采购 计划 定制产品 车间管理 MOMM 制造 BILM 物料单 INVM 材料分析 库存管理 批号跟踪 SHPM 发运 管理报告 PRCM 成本 APSM 应付款 ARSM 应收款 GLSM 总帐

  48. (2) Enhancing Core Competencies(核心能力) • Core Competencies: An activity at which a firm is a world-class leader, may include being the world’s best fiber-optic manufacturer, the best miniature parts designer, the best package delivery service, or the best thin film manufacturer. ----rely on knowledge. • How can IT be used to advance or create core competencies? Knowledge Management Systems encourage the sharing of knowledge across business.

  49. Industry-level(行业级) Strategy and Information Technology (1) 信息伙伴 航空公司与银行之间的信息合作

  50. (2) 网络经济 • In a network, the marginal cost of adding another participant are about zero,whereas the marginal gain is much larger. The larger the number of subscribers in a telephone system, or the Internet,the greater the value to all participants. • Change the market, eg.ATMs, Point-of-Sale system.