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Interorganisational Systems

Information Partnering

It is the driving force behind the emerging electronic marketplace.


IBM and Sears teamed up to provide Prodigy, a package of several hundred electronic data services, including home banking, stock market quotations, and airline reservations.

American Airlines has joined with Marriott and Budget Rent-a-Car in offering AMRIS an electronic travel supermarket.

Insurance Value-added Network (IVANS), the Singapore TradeNet, and the Baxter Healthcare System.

Electronic Marketplace

The electronic marketplace is an important trend in the 90’s. electronic sales channels reduce the costs of locating suppliers, ordering merchandise, and reconciling errors. Customers can save money by ordering just-in-time inventory via electronic market channels.

The players in the electronic marketplace include

  • suppliers and buyers,

  • retailers and customers and

  • manufacturers and dealers.

C A S E S:

1. Telcot, an Electronic market for cotton, enables 12,000 farmers to sell their products. Telcot was established by a cooperative association of cotton farmers in Oklahoma and Texas.

2. IVANS, the network that links insurance agents, insurance carriers, and other information sources for insurance agents, was created by an industry association of independent insurance agents.

3. SABRE and APOLLO, the airline reservation systems of American and United, not only have added the flights of competitive carriers but also have become electronic travel supermarkets for related services, such as hotel and rental car reservations. These information systems link the airlines with travel agents and provide the travel agents with a wide range of travel information.

The Strategic Impact of the Internet And Electronic Commerce

Overview of Internet Applications:

  • Individual to group Communications (group conferencing, Tele-meetings, electronic Bulletin board System, Newsgroups) for research, collaboration and distance education across institutional, state and national boundaries

  • Information Transfer and Delivery Services (eMail, electronic Bulletin board System, Newsgroups, EDI), and Multimedia eMAIL).

  • Information databases, including access to full-text databases and virtual libraries containing both text and multimedia information.

  • Information access using anonymous FTP which allows the user to connect and download files from a remote computer.

  • WWW access to obtain information in a multimedia format with graphics, audio and video.

  • Information Processing Services – remote access to a variety of software programs for operations research, statistics, simulation and visualisation.

Business Uses of Internet

Today the internet is becoming an electronic marketplace, and business uses of the Internet are growing more rapidly than any other application.


Globalisation: Intenet provides a global communications networks that is vital to creating a global presence.

Competitive Advantage: Using internet as a marketing tool, businesses can provide up-to-date information about products, technological developments, and research to millions of prospective customers and users.

Information Access: Businesses can access information including government databases, industry statistics and competitor practices.

Cost Containment: Doing Business electronically is less expensive than using paper works, phone contact, and information distribution by paper or by mail.

Sales and Marketing: Using the Internet, customers can obtain information about products, services, advertisement, prices, schedules, contact persons, service capabilities and business opportunities. Thousands of potential customers can access information in a labour-efficient and cost-effective way.

Electronic Communications: Businesses can have access to an international electronic communications network that facilities communications and interactions among customers, vendors and competitors in far-flung locations.

Electronic marketing and On-Line Communities on the WWW

  • Communities of Transaction facilitate the buying and selling of products and services and provide information related to those transactions.

  • Communities of interest allow participants to trade information with each other.

  • Communities of Relationship enable individuals to join on-line electronic discussion groups. Most of the commercial on-line services, such as America Online and CompuServe, have on-line chat-rooms to enable participants to exchange information on various topics.

Competitive Edge – Information Systems

Shifting to Capabilities based Competition

  • Set aggressive, customer-oriented goals.

  • Make sure that employees have the skills and resources they need to achieve the chosen capability

  • Align measurements and reward. For example, if the goal is to provide more effective customer service, then one should measure employees’ performance in terms of their ability to provide effective customer support.

  • Have the CEO provide leadership for the transformation. Without top management support, the transition to a customer-focussed, market-driven organisation will not happen.

  • Drive down business decision making to those directly participating in the key business processes, the sales and service staffs.