MANAGEMENT INFORMATION SYSTEMS

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Contents
COURSE OVERVIEW ............................................................................................................... 9
COURSE OUTCOMES .............................................................................................................. 9
COURSE ROADMAP ............................................................................................................... 9
UNIT 1 – FOUNDATION OF INFORMATION SYSTEMS ............................................................ 12
1.0 Introduction ........................................................................................................................ 12
1.1 Unit Objectives .................................................................................................................... 12
1.2 Why do people need information? ..................................................................................... 12
1.3 Data, Information and Systems .......................................................................................... 13
1.3.1 Data v/s Information .................................................................................................... 13
1.3.2 Characteristics of Information ..................................................................................... 13
1.3.3 What is a system? ........................................................................................................ 14
1.3.4 Information Technology v/s Information Systems ...................................................... 14
1.3.5 Information Systems .................................................................................................... 15
1.4 Management Information Systems .................................................................................... 16
1.4.1 Stages of Data processing in MIS ................................................................................. 16
1.4.2 Outputs of a MIS .......................................................................................................... 17
1.4.3. Functional Aspects of MIS........................................................................................... 18
1.4.3.1 Finance .................................................................................................................. 18
1.4.3.2 Human Resources ................................................................................................. 19
1.4.3.3 Production............................................................................................................. 19
1.4.3.4 Marketing .............................................................................................................. 19
1.4.3.5 Sales ...................................................................................................................... 19
1.4.3.6 Purchasing ............................................................................................................. 20
1.4.4 Business Processes ....................................................................................................... 20
1.4.4.1 Planning ................................................................................................................ 20
1.4.4.2 Organising ............................................................................................................. 20
1.4.4.3 Directing ................................................................................................................ 21
1.4.4.4 Controlling............................................................................................................. 21
1.5 Integration with Information Systems ................................................................................ 21
1.5.1 Financial MIS ................................................................................................................ 22
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 1.5.2 Marketing MIS.............................................................................................................. 22
1.5.3 Human Resource MIS................................................................................................... 22
1.5.4 Production MIS ............................................................................................................ 22
1.6 Impact of MIS on organisations .......................................................................................... 23
1.7 Impact of MIS on nature of work ........................................................................................ 23
1.8 Impact of MIS on business functions .................................................................................. 24
1.8 Business world transformation ........................................................................................... 24
1.9 Summary ............................................................................................................................. 25
1.10 Activities ............................................................................................................................ 25
2.0 Introduction ........................................................................................................................ 26
2.1 Unit Objectives .................................................................................................................... 26
2.2 Evolution of Information Systems ...................................................................................... 26
2.1.1 Data Processing Era...................................................................................................... 27
2.1.2 Management Information Systems Era ....................................................................... 28
2.1.3 Strategic Information Systems ..................................................................................... 30
2.1.3.1 Planning for SIS ..................................................................................................... 31
2.1.4 Inter-organisation Operating Systems (IOS) ................................................................ 32
2.2 Objectives, Decisions and Information ............................................................................... 33
2.3 Levels of Information Systems ............................................................................................ 34
2.4 Information Systems used in organisational levels ............................................................ 36
2.4.1 Transaction Processing Systems .................................................................................. 37
2.4.2 Management Information Systems ............................................................................. 38
2.4.3 Decision Support Systems ............................................................................................ 38
2.4.4 Expert Systems ............................................................................................................. 39
2.4.4.1 Group Decision Support Systems ......................................................................... 40
2.4.4.2 Geographic Information Systems ......................................................................... 40
2.4.4.3 Executive Support Systems ................................................................................... 41
2.4.4.4 Enterprise Resource Planning Systems ................................................................. 41
2.5 Summary ............................................................................................................................. 43
2.6 Exercises .............................................................................................................................. 43
3.1 Unit Objectives .................................................................................................................... 44

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 3.2 Information Systems and Business Strategies .................................................................... 44
3.3 Critical Success factors for e-business ................................................................................ 46
3.4 Frameworks for e-business strategies ................................................................................ 47
3.4.1 Positional and Bonding factors .................................................................................... 47
3.4.2 Dot com strategies ....................................................................................................... 48
3.4.3 Competitive or cooperative strategies ........................................................................ 48
3.5 Developing Sector strategies .............................................................................................. 49
3.5.1 Manufacturing ............................................................................................................. 49
3.5.2 Mixed goods and service organisations ....................................................................... 50
3.5.3 Service organisations ................................................................................................... 51
3.6 Channel Enhancement Strategies ....................................................................................... 51
3.6.1 Sell Channels ................................................................................................................ 51
3.6.2 Buy Channels ................................................................................................................ 52
3.7 Organisational Impact of E-business................................................................................... 53
3.8 Value Chain Integration ...................................................................................................... 53
3.8.1 Value Chain .................................................................................................................. 54
3.8.2 Supply Chain................................................................................................................. 55
3.8.3 Supply Chain Management (SCM) ............................................................................... 55
3.9 Summary ............................................................................................................................. 56
3.10 Exercises ............................................................................................................................ 56
UNIT 4 – MANAGING INFORMATION IN ORGANISATIONS .................................................... 57
4.1 Introduction ........................................................................................................................ 57
4.2 Unit Objectives .................................................................................................................... 57
4.3 E-commerce and E-business ............................................................................................... 57
4.3.1 E-commerce: A tool or a strategy? .............................................................................. 57
4.4 Transformation to E-business ............................................................................................. 60
4.4.1 Stage 1: Channel Enhancement ................................................................................... 60
4.4.2 Stage 2: Value Chain Transformation .......................................................................... 61
4.4.3 Stage 3: Transformation .............................................................................................. 61
4.4.3.1 Knowcos ................................................................................................................ 61
4.4.3.2 Physcos.................................................................................................................. 61

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 4.4.4 Stage 4: Convergence .................................................................................................. 62
4.4.4.1 Alliance for converging technologies model ........................................................ 62
4.4.4.2 Effects of Transformation and Convergence ........................................................ 63
4.4.4.3 Drivers for Convergence ....................................................................................... 64
4.5 Outsourcing ......................................................................................................................... 64
4.5.1 Approaches to Outsourcing ......................................................................................... 65
4.6 Summary ............................................................................................................................. 65
UNIT 5 – EVALUATING STRATEGIES FOR INFORMATION SYSTEM AND E-COMMERCE ............ 66
5.0 Introduction ........................................................................................................................ 66
5.1 Unit Objectives .................................................................................................................... 66
5.2 Strategic Frameworks ......................................................................................................... 66
5.2.1 Simple Rules ................................................................................................................. 66
5.2.2 Portfolio management ................................................................................................. 67
5.2.3 Co-evolutionary strategies ........................................................................................... 69
5.3 Assessing organisational readiness for change .................................................................. 70
5.3.1 The need for an action plan ......................................................................................... 71
5.4 Balanced ScoreCard (BSC) approach................................................................................... 72
5.4.1 Customer Perspective .................................................................................................. 72
5.4.2 Internal Business Perspective ...................................................................................... 73
5.4.3 Learning and Growth Perspective................................................................................ 73
5.4.4 Financial Perspective ................................................................................................... 73
5.4.5 Strategy maps and strategy trees ................................................................................ 75
5.4.6 Implementing the BSC ................................................................................................. 75
5.5 Internet Strategy Effectiveness........................................................................................... 76
5.6 Summary ............................................................................................................................. 77
5.7 Exercises .............................................................................................................................. 77
UNIT 6 – CONTEMPORARY INFORMATION SYSTEM AND E-BUSINESS CULTURE .................... 78
6.0 Introduction ........................................................................................................................ 78
6.1 Objectives............................................................................................................................ 78
6.2 Traditional marketplace and e-marketspace ...................................................................... 78
6.3 Strategic Analysis for e-business solutions ......................................................................... 80

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 6.4 E-business cultures ............................................................................................................. 81
6.5 Culture and ICT.................................................................................................................... 82
6.6 Culture and e-business........................................................................................................ 82
6.7 Global Branding and Customer Relationship Management ............................................... 83
6.8 Customer Relationship Management ................................................................................. 84
6.9 Summary ............................................................................................................................. 86
6.10 Exercises ............................................................................................................................ 86
References .......................................................................................................................... 87

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List of Figures
Figure 1 Raw data processed into meaningful information ......................................................... 13
Figure 2 Information System and the surrounding environment................................................. 15
Figure 3 Information flow across various types of information systems ..................................... 16
Figure 4 Sub-systems within an organisation MIS ........................................................................ 21
Figure 5 Localised Systems ........................................................................................................... 28
Figure 6 Internal Integration ......................................................................................................... 28
Figure 7 Interconnected ecology of firms ..................................................................................... 33
Figure 8 Categories of organisational levels ................................................................................. 35
Figure 9 Information systems used in different organisational levels ......................................... 37
Figure 10 Enterprise Resource Planning Software ....................................................................... 42
Figure 11 Supply Chain Structure for Non Fast Moving Consumer Goods ................................... 49
Figure 12 Supply Chain structures for Retailers ........................................................................... 50
Figure 13 Value Chain [Add reference] ......................................................................................... 54
Figure 14 Staged Transformation Model ...................................................................................... 60
Figure 15 Portfolio Management.................................................................................................. 68
Figure 16 Concepts of Viability and Fit ......................................................................................... 68
Figure 17 viewing an organisation from various perspectives [BSC 2013]................................... 72
Figure 18 Strategy Tree (Customer Satisfaction) .......................................................................... 75

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List of Tables

Table 1 Characteristics of useful information ............................................................................... 14

Table 2 Elements concerning decision making and their significance at each operational level 35
Table 3 Significance of various activities at different organisational levels ................................. 36
Table 4 Positional and Bonding Factors ........................................................................................ 47
Table 5 Differences between Traditional Collaboration and Coevolution in the Marketplace
[Eisenhardt 2000] .......................................................................................................................... 69
Table 6 E-commerce value grid [Riggins 1999] ............................................................................. 70
Table 7 Balanced ScoreCard Approach ......................................................................................... 74
Table 8 Balanced Scorecard .......................................................................................................... 74
Table 9 Benefits of the Internet Marketplace .............................................................................. 79
Table 10 Differences between physical and internet marketplace .............................................. 80
Table 11 Types of Electronic Markets ........................................................................................... 80
Table 12 Composite model of cultural dimensions ...................................................................... 82

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COURSE OVERVIEW

This course is designed to enhance your knowledge and competencies in the applications of
management information systems. It provides details as regards various types of information
systems and their usefulness for managerial decision making. Moreover, the course covers the
impact of management information systems on organisations, business functions and the nature
of work. Furthermore, the course emphasises on the impact of the Internet on modern business
and describes the various strategies which can be used for E-Business and E-Commerce
development.

COURSE OUTCOMES

Upon completion of Management Information Systems, you will be able to:

 Describe the applications of Information Systems and their impact on organisations.

 Describe how Management Information Systems can be used in supporting managerial
decision making in organisations.
 Describe technology and business trends that have enhanced the role of Information
Systems in today’s competitive business environment
 Discuss the strategic role of information systems
 Discuss issues in implementing e-business and e-commerce strategies
 Demonstrate a clear understanding of outsourcing, its benefits and negative
consequences.

COURSE ROADMAP

The Management Information Systems module is segmented into 6 units (chapters). Each unit
will take about two weeks to complete. The course focuses on theories as well as applications
that will help you understand and analyse various aspects of management information systems.
The practice exercises at the end of each unit will enable you to practice the skills you have
learnt and are therefore highly recommended.
The roadmap of the course manual is as follows:

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Unit 1 – Foundation of Information Systems
This unit covers the basic definitions of Information Technology and Information Systems and
how these are used in the modern business environment. Some common business functions and
processes are then described. Moreover, this unit discusses the impact of management
information systems on organisations and the nature of work.

Unit 2 – Strategic Information Systems and Enterprise Systems

This unit describes the various eras of Information Systems and the characteristics of Strategic
Information Systems. Moreover, the relationship between organisational objectives, decisions
and information is evaluated. This unit also emphasises on the various levels of decision making
in an organisation and the different types of information systems which can be used in each level.

Unit 3 – Strategic Role of Information Systems

This unit describes the strategic role of information systems in organisations. Moreover, it
discusses the major forces which are changing the business environment. Further, it evaluates
various strategies and factors which need to be considered prior to embarking upon e-
business/e-commerce. Furthermore, value and supply chains as well as Enterprise Resource
Planning (ERP) systems are described.

Unit 4 – Managing Information in Organisations

This unit evaluates the differences between implementation of E-business and E-commerce
strategies. Moreover, it describes models such as staged transformation and converging
technologies and their impacts on business processes and on people.

Unit 5 - Evaluating Strategies for Information System and E-Commerce Applications

This unit discusses some approaches to assess an organisation’s readiness to take advantage of
e-business as well as techniques to evaluate e-business and Information Systems strategies. The
Balanced Scorecard (BSC) approach will be examined. Moreover, this unit will examine how an
organisation can create its own evaluation system.

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Unit 6 - Modern Information System and E-Business Culture
This unit covers the differences between the traditional marketplace where business is
conducted and the new electronic marketplace (also known as market space or virtual market).
Moreover, the cultural issues associated with the creation of global marketplaces will be
discussed. In addition, the drivers for globalisation and some of the likely future developments
that may shape business strategies worldwide will be described.

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UNIT 1 – FOUNDATION OF INFORMATION SYSTEMS

1.0 Introduction

This unit starts with some elementary definitions of data, information and systems and briefly
discusses the need and characteristics of information. The basic definitions of information
technology (IT) and Information Systems (IS) will then be reviewed, followed by a description of
the various components of Information Systems.
We will then discuss the use of information systems in a business or organisation. Moreover, the
major functions of organisation and the processes within those functions will be examined.
Lastly, we will look at the impact of information systems on organisations and on the nature of
work.

1.1 Unit Objectives

By the end of this unit, you will be able to:

 Differentiate between data, information and systems

 Differentiate between information technology (IT) and information systems (IS)
 Identify the various components of Information Systems and the different stages in data
processing
 Identify common business functions and processes in an organisation
 Discuss the impact of Information Systems on business.

1.2 Why do people need information?

Information is required for different reasons. For instance, people need information for learning,
enlightenment and entertainment. Businesses need information for decision making, problem solving,
planning and control.

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1.3 Data, Information and Systems

1.3.1 Data v/s Information

Before moving on to the definition of information systems, it is important to differentiate between data
and information. Data can be a given fact, a number, a statement or a picture. Data can be representative
of something in the real world and be considered as the raw materials in the production of information.

On the other hand, information refers to data that has been shaped into a meaningful form.

For instance, Figure 1 below illustrates raw data from a supermarket checkout counter that has been
processed and organised to produce meaningful information, such as the total units of particular items
sold from a specific store in a sales territory.

RAW DATA INFORMATION

331 Soap $ 2.50 Sales Region: North

550 Bread $ 0.50 Store: Superstore #22
300 Water $ 1.00
331 Soap $ 2.50 ITEM No DESCRIPTION UNITS SOLD
112 Sugar $ 2.00 331 Soap 3
331 Soap $ 2.50

Figure 1 Raw data processed into meaningful information

1.3.2 Characteristics of Information

Table 1 below illustrates the characteristics of useful information.

Characteristics Reason
Relevant Information must pertain to the problem at hand. The
information must also be presented in a way that helps a person
understand it in a specific context
Complete Partial information is worse than no information. The information
should be complete so that the user can make conclusions after
analysing all the parameters available
Accurate Information should be accurate since errors can results in bad
decisions, or even loss of life
Current Decision are often based on the latest information available. Out-
of-date data may result in irrelevant decision making

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 Economical The cost of obtaining information must be considered as a cost
element involved in any decision. For instance, demand for a new
product must be researched to ensure product success, however,
if the research cost is too expensive, it might reduce the profit
from sales.

Table 1 Characteristics of useful information

1.3.3 What is a system?

A system is a set of components that work together to achieve a common goal. It can comprise of
subsystems, each producing results that can be combined to reach an ultimate goal. Systems can be of
different types namely Closed System and Open System. Closed Systems are stand-alone systems that
have no contact with other systems whereas Open Systems are systems which can interact with other
systems.

For example, a corporate accounting system can be made up of several systems namely:

Accounts Payable –keep track of whom do we owe?

General Ledger – keep records of our assets

Accounts Receivable – keep track of who owes us

Report Generator – produce reports, charts, graphs to show status and problem areas

1.3.4 Information Technology v/s Information Systems

Information Technology (IT) refers to a collection of elements e.g. computer hardware, software,
networks, smart chips, workstations.
Information Systems (IS) refer to applications with multiple functionalities such as collecting,
retrieving, processing, storing and disseminating information.
In short, IS are applications having functionalities which can be used by businesses and IT
provides the capabilities to enable the applications.

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1.3.5 Information Systems

An information system contains information about an organisation and its surrounding

environment. There are 4 core activities which produce and store the information required by
organisations. These are namely:
Input: Capture raw data from the organisation and the environment
Process: Raw data is converted into meaningful form
Output: The information is displayed or presented
Storage: Data and Information stored for later use and processing.
Figure 2 illustrates some environmental stakeholders such as Suppliers, Customers and
Competitors interacting with the organisation and its information systems.

Figure 2 Information System and the surrounding environment

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1.4 Management Information Systems

Management Information Systems (MIS) are specialised forms of information systems that have
been developed to provide managers with information and support for effective decision making,
and provide feedback on daily operations. The benefits of MIS include the following:

 Every organisation has vision, mission and goals – MIS provides support to
users/managers towards achieving goals
 MIS allows the comparison of actual results with expected organisation goals
 It allows the identification of bottlenecks and problem areas
 It helps in the identification opportunities for improvement
1.4.1 Stages of Data processing in MIS

Data from business transactions (for instance, number of sales of a product on a particular day)
are entered into a type of information system known as Transaction Processing Systems (TPS).
The data is then processed and fed into the MIS which in turn, outputs and presents the
information in various forms namely reports, charts and graphs. These are used to help the
management in making informed decisions which are in line with the organisational objectives.
The outputs from the MIS is then used as inputs in other more sophisticated types of information
systems such as Decision Support Systems, (DSS) Executive Support Systems (ESS) and Expert
Systems.
The different stages of data processing are as shown in the Figure below:

Figure 3 Information flow across various types of information systems

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(Note: TPS, DSS, ESS and Expert Systems are covered in more detail in forthcoming chapters)

1.4.2 Outputs of a MIS

The outputs of MIS include several types of reports namely:

 Scheduled Report: These are produced periodically, or on a schedule (daily, monthly,

weekly)

 Key-indicator Report: These reports summarise the previous day’s critical activities.
These reports are usually available at the beginning of each day

 Demand Report: These provide specific information based on the manager’s request

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  Exception Report: Automatically produced when a situation is unusual or requires
management action.

1.4.3. Functional Aspects of MIS

MIS is an integrated collection of functional information systems, each supporting particular

functional areas of a business.
A business organisation often includes functional areas such as finance, human resources,
production, marketing, sales and purchasing. Each area comprises of a series of activities and
processes put in place to support the various goals of the enterprise. In this section, some of the
common business functions will be reviewed.
1.4.3.1 Finance

Finance is a functional area responsible for financial enterprise functions such as financial
accounting. Financial accounting is often the first business function which organisations choose
to computerize first. Financial accounting is concerned with the recording of business

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transactions of the organisation and producing documentation associated with those
transactions.

1.4.3.2 Human Resources

Human resource is a functional area that provides services in support of the following enterprise
functions: recruitment, selection, training, appraisal and promotion of staff. It also administers
staff records, payment and reward systems, and fringe benefits. This department defines and
revises job specifications and, when needed, hires new staff. Analyses of the workforce by age,
skills and experience can help management in identifying strengths, planning recruitment and
determining which manual tasks require automation.

1.4.3.3 Production

Production is the functional area dealing with activities such as production operations for
producing goods and services of the stipulated quality. It should ensure that customer orders
are being met, optimal level of work is maintained and there is minimal reject level.

1.4.3.4 Marketing

Marketing is a functional area that handles marketing research to identify and determine the
products and services which people want. By collecting and processing data from many sources,
organisations can monitor consumption patterns and consumer attitudes towards their existing
products and identify other market segments which can be exploited.
Marketing is supported by advertising and promotional programmes working together with
advertising and public relations agencies.

1.4.3.5 Sales

Sales is a functional area responsible for the selling of goods and services produced by the
organisation. Its activities include forecasting of sales volume and building up sales forces that
can provide the best coverage in sales territories. It is common to find the sales department as a
unit within the marketing department.

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1.4.3.6 Purchasing

The purchasing department is responsible for the sourcing, supply and logistic of goods and raw
materials that meet the stipulated quality and cost whilst at the same time maintaining the
production schedule.
The business functions described above are the basic building blocks of any organisation and each
business function consists of a series of processes. These processes are described in the next
section.

1.4.4 Business Processes

The performance of managers is typically evaluated by the extent to which the organisation can
meet its objectives. It is crucial that managers carry out a series of processes in order to achieve
their mission. Some of the generic business processes are namely Planning, Organising, Directing
and Controlling.

1.4.4.1 Planning

Planning is indispensable for steering the organisation from where it is now to where it wants to
go. In this respect, planning requires a clear understanding of the organisational objectives. In
case the objectives are not available, then these should be derived from the organisation’s
mission statement. After the objectives have been defined, the strategy for the way forward
should be formulated whilst taking into account external business influences and competitors. In
this respect, SWOT (Strength, Weakness, Opportunity and Threat) analysis could be undertaken
by capitalising on the strength of the organisation and exploiting opportunities while minimising
weaknesses of the organisation and threats in the outside environment [Burn 2012].

1.4.4.2 Organising

Organising involves assessing what tasks are to be achieved by when. It also involves breaking
down the tasks into sub-tasks while assigning completion dates to each of them. Thus, it is the
responsibility of the manager to devise an action plan to allow the task to be completed within
the allocated time frame. Organising also involves obtaining important resources such as finance
and workforce.

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1.4.4.3 Directing

Directing is the stage which follows after organising and it entails executing the action plan. The
leader leads, motivates, deploys personnel, delegates and coordinates in order to successfully
complete the tasks.

1.4.4.4 Controlling

After the execution of the action plan, it is important for the managers to know the extent to
which they have achieved and to identify any potential gaps. Controlling is the process of setting
standards and measuring the actual performance. In case the performance is not in line with the
expectations, remedial actions are applied iteratively until the desired outcomes are achieved.

1.5 Integration with Information Systems

An organisation MIS can comprise of multiple MIS sub-systems, each focusing on a particular
functional area as shown in the Figure below.

Figure 4 Sub-systems within an organisation MIS

The section below illustrates the inputs and outputs of the various MIS sub-systems.
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1.5.1 Financial MIS

Features Provides financial information to all financial managers within an

organisation.
Inputs to Financial Financial objectives, financial needs of projects, payroll, inventory
MIS control, accounts payable, accounts receivable, general ledger
Outputs from Profit/Loss, cost systems, auditing (internal/external), uses and
Financial MIS management of funds

1.5.2 Marketing MIS

Features Supports managerial activities in product development, distribution,

pricing decisions, and promotional effectiveness
Inputs to Strategic plan and policies, competition, market, data from TPS
Marketing MIS
Outputs from Marketing Research, product development, promotion and advertising,
Marketing MIS product pricing

1.5.3 Human Resource MIS

Features Deals with all activities related to current and potential future
employees of the organisation
Inputs to Human Strategic plan and policies, payroll data, personnel data, order
Resource MIS processing data
Outputs from Human resource planning, recruitment, training and skills
Human Resource development, job placement, salary administration
MIS

1.5.4 Production MIS

Features Deals with the production of goods and services of the stipulated
quality and cost.
Inputs to Strategic plan and policies, order processing, personnel data,
Production MIS production process
Outputs from Design and engineering, production scheduling, manufacturing
Production MIS resource planning, process control, quality control and testing

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1.6 Impact of MIS on organisations

Research has shown that MIS exert a strong influence on organisations as it can affect both
production and coordination. Some of the research findings are as follows:

 MIS enables fundamental changes in the way work is done

 MIS presents new opportunities for organisations to assess their mission and operations

 MIS provides a competitive advantage to the organisation

o Delivering better performance
o Charging less for better quality products
o Responding to customers and suppliers in real time

 Successful applications of MIS and new technologies requires changes in management

and organisational structure.

 MIS enables the integration of business functions at all organisational levels within and
between organisations.

1.7 Impact of MIS on nature of work

The extent to which MIS has an impact on a person’s work depends on how much of the work is
based on information. The information may be related to production work or coordinative work.
Production work refers to work done to produce goods and services. Production work can be
segmented into 3 constituents namely:

 Physical production: This is affected by the use of sensors and other machinery for
controlling the various processes

 Knowledge production: This is affected by tools such as Computer Aided Software (CAD)
and other custom software

 Information production: This is affected by the computerisation of certain tasks such as

billing, accounts receivable, accounts payable.

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Coordinative work: entails working in conjunction with others. MIS has a high impact in the
coordinative process in the following ways:

 Distance can be reduced to zero through the use of electronic communication

 Time elapsed can be reduced drastically or tasks can be shifted to a more convenient time
 Organisational memory can be maintained through the use of databases and this can be
shared among multiple users simultaneously.

1.8 Impact of MIS on business functions

Technology has enhanced connectivity and accessibility to information in such ways that it is now
possible to look for any information anywhere, anytime and through any chosen way. The
boundaries of organisations are gradually blurring and this has speeded up the work in and
around the organisation. MIS has facilitated integration in several ways namely:

 Teams within organisations: Different departments such as manufacturing and

engineering can be connected together to work as a team through local/global networks

 Links between organisations: This refers to the emergence of virtual organisations

whereby transactions can be electronically enabled between different organisations. For
example, a supplier’s shipping department can be connected to a buyer’s purchasing
department for business transactions

 Electronic Markets: Coordination amongst organisations has given rise to open markets.
For instance, customers can purchase goods and services electronically by searching
through several providers. This enables them to compare and select best price/value.

 Electronic Alliances: An organisation may choose to focus on its core activities and
outsource its non-core activities to other electronically linked organisations.

1.8 Business world transformation

There has been significant transformation to the world of business by a number of powerful
forces such as globalisation and the advent of the Internet. As a result, this has given rise to new
terms such as New Economy, Information Economy and Digital Economy. Moreover, there has
been major restructuring of organisations as a result of the enhanced collaboration from several
electronic businesses. This in turn, has resulted in complex economic, strategic and conflict
management issues. The new business paradigm will be one where:

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  Emphasis will be on collaboration rather than competition in the electronic market
 Core business processes will require re-engineering
 New organisational forms and inter-organisational forms will need to be developed

The fundamental elements of doing business have changed and have resulted in an entirely
new business environment as a result of phenomena such as:

 World wide Web (goods bought and sold over the web)
 Mass customization
 Compressed product life cycle
 New distribution channels
 New forms of integrated organisations

1.9 Summary

In this module, you have learned the basic definitions of Information Systems with particular
emphasis on Management Information Systems and their impact on the organisation on the
business environment and on business functions. In the following modules, you will learn some
of the concepts discussed in more detail and will look into developing an MIS strategy for your
own organisation and conducting e-business in the electronic marketplace.

1.10 Activities

1. Identify the major functions within your own organisation, or department if your organisation
is very large (such as the government or a bank).

2. Describe the major processes within the functions. Identify what MIS (if any) exist to support
these areas.

3. What are the business drivers that are shaping modern business environments? Discuss.

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UNIT 2 – STRATEGIC INFORMATION SYSTEMS AND ENTERPRISE
SYSTEMS

2.0 Introduction

In this module you will look at how information systems have evolved from being simple data
gathering systems within organisations to complex systems communicating across business
organisations. Moreover, you will examine the characteristics of strategic information systems
and their impact on business. In addition, you will identify various information systems used in
the different management levels of the organisation.

2.1 Unit Objectives

 Identify and describe the various eras of information systems

 Describe the characteristics of Strategic Information Systems and their impact on business
 Describe the relationship between objectives, decision and information
 Describe how information is managed across various levels of an organisation
 Identify and describe the various types of information systems used in the different
organisational levels.

2.2 Evolution of Information Systems

As the use of computers and communications has changed over time, the approaches used to
plan the use of Information Systems in organisations has changed as well. The established
approaches to information systems, which were once suitable for automation of basic activities
within organisations, are unlikely to be appropriate in an age where the role of Information
Systems is to connect multiple organisations together.
In this section we will look at the different eras of Information Systems namely:

 Data Processing era (1960 +)

 Management Information Systems era (1970 +)

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  Strategic Information Systems (1980 +)
 Inter-organisational Operating Systems - IOS (1990 +)

Throughout this discussion, it is important to note that the eras are not sequential in time but
rather define the latest technology that was available at that time. For instance, the Data
Processing systems represented the latest information systems technology developed in the
1960’s, but they are still used even now.
Managing and controlling information in an organisation in these eras involved different
approaches, many of which were determined by the systems available at that time.

2.1.1 Data Processing Era

The data processing (DP) era begun in the 1960s, whereby the latest technologies in computing
at that time enabled the automation of basic business transactions. This helped the organisations
in gaining efficiency and lowering the cost of production.

The process of automating the activities took place function by function and the planning for
implementation was constrained by a project-by-project outlook. In this era, the systems were
developed primarily according to simple economic criteria: how can these processes be
automated so that they can be done cheaper?

This lead to the development of systems that were localised, that is, they focused only on
processes within a specific department for which they were developed. As such, they could not
communicate with other systems in other departments. The planning efforts were remedial as
their aim was to set up interfaces between these separate systems.

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 Figure 5 Localised Systems

Furthermore, this era was dominated by information systems that had their primary function of
processing predefined business transactions to produce fixed format reports and results. The
typical transactions that were handled included purchase orders, customers and payroll records.
Since these systems processed transaction data of organisations without producing much
management information, they were referred to as Transaction Processing Systems (TPS) or Data
Processing Systems (DPS).

Areas that required automation were identified by inspection and by observing the performance
of routine tasks and evaluating whether computer systems could be programmed to perform
them. Systems were also developed to automate processes in areas such as purchasing,
manufacturing and marketing.

The transaction processing systems could only produce simple reports based on the data which
they processed. Consequently, such systems did not meet the information needs of managers
and professionals as they were not capable of producing ad hoc reports on demand.

2.1.2 Management Information Systems Era

With time, more and more data was being stored across the various functional areas of the
organisation. The advancement in computing enabled the development more user friendly tools
which allowed the managers to search information across the entire organisation. These new
tools were called Management Information Systems (MIS).

Figure 6 Internal Integration

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Within MIS, the effectiveness of managerial performance and decision making was highlighted.
The focus was on the development of a series of information systems that supported and
facilitated management decision making as well as effective monitoring and control of employee
activities.

It is important to note that the planning process in the MIS era was internally oriented (similar to
the Data Processing Era). The primary functions of the MIS were to provide new capabilities to
the users namely:

 Enquiry: Searching specific information from databases. The searches were based on ad
hoc user requests.

 Analysis: Generating “what-if” scenarios for testing implications of planning models.

Recently, the use of management information systems by managers and professionals has grown
considerably, due to the advancements in computing systems. The activities that use
management information systems are often not well defined. Whilst there are some MIS that
automate tasks that were previously performed manually such as sales analysis and job
scheduling), there are others that focus on creative applications developed by the end users.

Unlike DPS, MIS depend primarily on powerful microcomputer technology and are used by
managers and professionals rather than the clerical and supervisory level staff. Moreover, it is
important to note that these systems are aimed at supporting the managers and professionals
rather than replacing them by automating their tasks.

The systems that support specific decisions have come to be known as decision support systems
(DSS). The objectives of such systems are not simply to improve the quality of information from
the use of decision models, but rather, to improve the quality of the managerial decision process
itself. Likewise, the systems that are specifically designed for top management executives have
been coined as Executive Information Systems (EIS). Nowadays, EIS are being increasingly used
by organisations such as Medicare [Medicare 2013] and banks. The reasons behind the
worldwide growth of EIS include:

 These systems are more powerful and yet user friendly

 EIS can accommodate the accelerating pace of business and the need to make
organisations more flexible by reducing management layers.

Unlike DPS which have an efficiency focus, systems in the MIS era aim at enhancing the
effectiveness of their users. As such the design and development of such systems invariably
requires systems analysts who are trained not only in Software Engineering but also skilled in

29
disciplines such as business management, finance, strategic planning, marketing as well as
operations research.

2.1.3 Strategic Information Systems

Extending the range and scope of DPS and MIS systems, the 1980s and 1990s saw the advent of
Strategic Information Systems that were aimed towards improving an organisation’s competitive
position, changing the way business is conducted and establish close links to business partners
and customers.
Strategic Information systems are systems that are used to support or shape the competitive
strategy of the organisation. This competitive strategy of an organisation entails a plan for gaining
or maintaining competitive advantage or reducing the advantage of the competitors. These
systems extend beyond the bounds of the organisation itself to its customers, suppliers and
competitors. As such, the use of telecommunications is often key to the implementation of an
SIS.
An SIS has three core characteristics:

 It significantly changes business performance. For instance, a DPS or an MIS/MSS might

provide a 30 per cent return on investment, an SIS can return 10 times that amount.

 It contributes towards the strategic goals of the organisation. For instance, if a system is
critical towards achieving a business goal, such as increasing sales volume of a product by
a specified percentage, then that system is an SIS

 A system is an SIS if it fundamentally changes the way the company does business, or the
way it competes, or the way it deals with its customers or suppliers. For instance, the
setting up of a new distribution channel for a company example the installation of an SIS
when Tesco (UK) developed their cyber stores for online transactions.

An SIS is designed to be flexible, externally focused and driven by business requirements and
customer requirements. It is important the use of the SIS implies the use of technology to support
or shape strategy rather than the capability to process transactions or do query and analysis. In
this respect, an SIS should be first created as a prototype and then tested on a small scale by the
users (managers and customers). The feedback obtained as a result of the tests should be
incorporated and re-tested. This test-feedback cycle is repeated iteratively until the prototype
has developed into a full scale application.

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A strategic information system may be either a DPS or an MIS or MSS. The dimension which
makes a system strategic is its direct shaping of the competitive strategy of the organisation. An
SIS may require new hardware and software as well as additional personnel and an organisational
and cultural change.

At this point, it should be re-emphasised that the eras do not represent sequential relationships
in time. For instance, it does not mean that the DP era ended and then the MIS era started and
that the SIS era started only after the MIS era had ended. The era refers to the latest state of the
art technologies which were available at that time.

2.1.3.1 Planning for SIS

During the SIS era, planning for information systems changed significantly as a result of the
advanced tools and increased management interest in IT. Planners were encouraged to look
outwards from their organisation into the external business and IT environments. It was
recommended that Strategic Information Systems Planning (SISP) should be attempted once the
business strategy had been developed and the goals for the next few years clearly understood.

After the establishment of the business strategy, the IS plan could be developed, determining the
information systems needed to support the business strategy, and thus guiding investment
decisions into the future. Once an IS plan was defined, an organisation’s technological
requirements in terms of the hardware and infrastructure would be provided to support the
information systems. The key elements for the SISP process are outlined below:

 The SISP should consider the organisation’s external business environment (competitive,
economic, social and political) and how IS/IT can be deployed to neutralise, or capitalise
on the effects of these forces. An example of an approach which might be used is
Competitive Forces Analysis [Porter 1985].

 The SISP should consider the internal business environment of the organisation, to
understand the strengths, weaknesses, opportunities and threats and how IS/IT can build
on and support the strengths while reducing or eliminating the weaknesses. An example
of an approach which might be used is SWOT Analysis.

 The SISP process should also include an understanding of the external IS/IT environment
regarding the use of technological advances by relevant outsiders and the degree of

31
 success of those uses. An example of an approach which might be used is Environmental
Scanning.

 The SISP process should include an understanding of the internal IS/IT environment
including issues such as how well existing IS/IT currently serve the institution, existing
skills and competencies, and inventory and evaluation of existing IS/IT assets and future
needs. An example of an approach which might be applicable is the Value Chain Analysis
by Michael Porter.

 The SISP process is likely to derive both an IS and IT strategy. The IS strategy defines
current and future needs and requirements for information systems to achieve
organisational goals and objectives. Whereas the IT strategy defines the technological and
infrastructure requirements for the information systems. An example of an approach
which can be used is IBM’s Business Systems Planning (BSP).

 The SISP process should entail development of future applications portfolio which is
aligned to the business strategy and designed to maximise impact of IS/IT on the
achievement of business objectives. An example of this approach might be Portfolio
Analysis.

2.1.4 Inter-organisation Operating Systems (IOS)

In this section, we will consider the changing realities of the business environment in which many
organisations operate. The business environment that is rapidly evolving is one in which distinct
boundaries between organisations are gradually blurring. Consequently, organisations enter into
a variety of relationships of varying strength and commitment with their customers, suppliers,
business partners and even competitors. This inter dependent business environment is also
known as the Interconnected Ecology of Firms.
The IOS extend between two or more organisations with distinct structures, strategies, business
processes and IT infrastructure. If such forms of business networks become more prevalent, then
the whole SISP process will need to be revisited.
For instance, as notions of organisational boundaries blur, corporate ownership of databases may
need to be reconsidered. Similarly, there will be changes in ownership and accountability towards
internal and external business processes. Moreover, there will be a heavy reliance on IT
infrastructure to communicate, coordinate and control activities. Therefore, it would be
inappropriate to undertake SISP in one organisation or one part of the ecosystem. SISP will need
to be conducted throughout the business network.

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 Figure 7 Interconnected ecology of firms

2.2 Objectives, Decisions and Information

In this section, we will briefly discuss the relationship between organisational objectives,
decisions and information. So far we have looked at some information systems which can provide
the information needed by managers. One of the fundamental questions which arises is how do
we determine what information is required by managers? This information is determined by the
decisions taken at the various organisational levels. The other question which arises is how do
we determine what decisions need to be taken? The decisions are in turn determined by the
mission, vision and objectives of the organisation.
Objectives  Decisions  Information Needs
For example, the objective of an organisation is to increase its net profit by 50%. Some of the
decisions could be as follows:

 Which products should be emphasised?

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  Do we buy the product externally?
The information used to formulate the above decisions could be obtained from the Management
Information System, for instance, trends on how well specific products are selling.

2.3 Levels of Information Systems

Decision making within organisations takes place at different levels and each of these levels use
different types of information systems in order to support their business processes. In this
section, we will look at the characteristics of the information systems used in the different
organisational levels.
Indeed, it is erroneous to assume that a single system is sufficient to satisfy all the information
needs of an organisation. Different kinds of systems are developed to cater to the needs of the
organisational levels as well as the functional areas such as finance, sales, marketing and
production. The 3 main categories of organisational levels are:
 Strategic level (Top management)

 Tactical level (Middle management)

 Operational level (Lower level management)

Strategic level
This level deals with strategic issues and long-term forecasts. The main concern is to establish
objectives for organisation and long range plans to attain those objectives. For instance, decision
on location of plants, sources of capital and the types of products to produce.

Tactical level
This level deals with the implementation of decisions taken at the strategic level. The focus is also
on the allocation of resources in order to pursue organisational objectives. For instance, the
layout of a manufacturing plant, budget allocation, personnel concerns, production scheduling.

Operational level
This level deals with the execution of specific tasks and assuring they are carried out effectively
and efficiently. For example, accepting/rejecting, determining inventory reorder times and
quantity, assigning jobs to workers

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 Figure 8 Categories of organisational levels

At the strategic level, the degree of judgement is usually high as it entails a lot of forecasting and
planning. As we move from the strategic to the operational level, the degree of judgement
changes from high to moderate at tactical level and to low at operational level. The table below
summarises some elements concerning decision making and their significance at each
operational level.

Element Operational Tactical Strategic

Degree of judgement Low Moderate High

Planning Decisions Few About Half Most

Problem Variety Low Moderate High

Time Horizon Days Months Years

Table 2 Elements concerning decision making and their significance at each operational level

Likewise, the significance of various activities at different organisational levels are as shown in
the table below.

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 Activity Operational Tactical Strategic

Dependence on IS High Low Low to Moderate

Dependence on Info Very low Moderate High

Summarisation

Need for computer graphics Low Moderate High

Use of Real Time info Very high High Moderate

Use of Predictive info Low High Very High

Table 3 Significance of various activities at different organisational levels

2.4 Information Systems used in organisational levels

Information systems serve various business functions such as sales, marketing, production and
finance. For each business function, a typical organisation has strategic, tactical and operational
level information systems.
As an example, we will consider the Sales and Marketing function

 At the strategic level, a sales and forecasting system will be used to prepare 5 year sales
forecasts. Systems used at this level are categorised as Executive Support Systems (ESS)

 At the tactical level, pricing analysis systems will be used to determine prices of products
and services. Systems used at this level are categorised as Management Information
Systems (MIS) or Decision Support Systems (DSS)

 At the operational level, order processing systems will be used to enter, process and track
orders. Systems used at this level are categorised as Transaction Processing Systems (TPS)

36
 Figure 9 Information systems used in different organisational levels

The TPS are used to gather data which in turn is sent to the other systems for further processing.
The data is sent to MIS to produce reports for enquiry and analysis. The ESS is primarily a recipient
of data from the lower level systems. It is important that these systems are integrated so that
information can flow easily between different parts of the organisation. Moreover, the
integration will provide the management with an enterprise-wide view of the performance of the
organisation.

2.4.1 Transaction Processing Systems

The TPS are the basic business systems that serve the operational level of the organisation. It is
a computerised system that performs and records the daily routine transactions necessary to
conduct business. Each functional area can have its own TPS for example:

 Sales and Marketing TPS(sale management, customer service)

 Production TPS (purchase order, scheduling)

 Human Resources TPS (personnel records, training)

 Admissions TPS (enrolment of students at a university, grading records)

37
  Finance TPS (payroll, accounts payable)

2.4.2 Management Information Systems

MIS serve the management level of the organisation, providing managers with reports and access
to the organisation’s current performance. The MIS also provides historical records and primarily
serve the functions of planning, controlling, and decision-making. Each functional area can have
its own MIS for instance:

 Sales and Marketing MIS (Determine prices for products and services)

 Production MIS (Decide when and how many products should be produced)

 Finance MIS (Prepare short-term budgets)

 Human Resources MIS (Monitors the distribution of employee salaries and benefits)

Typically, MIS are oriented almost exclusively to internal rather than external events. The
transaction data from the TPS are supplied to the MIS reporting system which in turn, summarise
and report on the company’s basic operations. The MIS are generally not flexible, have little
analytical capability and use simple summaries and comparisons.

2.4.3 Decision Support Systems

Decision support systems (DSS) also help managers to make decisions that are unique, rapidly
changing and not easily specified in advance. The address problems where the procedures for
finding the solutions may not be fully predefined beforehand. DSS use internal information from
the TPS and MIS as well as external information such as information from competitors. DSS use
a variety of models to analyse data and condense large volumes of data into a form which can be
analysed by decision makers.
The table below illustrates the differences between MIS and DSS.

Management Information Systems (MIS) Decision Support Systems (DSS)

MIS provide information on the firm’s DSS help to support decisions in an
performance. organisation.

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 They produce fixed, regularly scheduled DSS connects users to structured information
reports based on data extracted from TPS. flows with main emphasis on models,
The formats of these reports are often assumptions, ad hoc queries, and displays in
specified in advance. graphic ways.

MIS primarily addresses structured problems DSS supports semi-structured and

and analysis. unstructured problem analysis.

MIS provides managers with reports based DSS emphasizes change, flexibility and a
on routing flows of data and assists in the rapid response to internal and external
general control of the business. changes.

A DSS has 3 core components namely the database, the user interface and the DSS software
system. The database is a collection of records (current or historical) which is continuously
updated by the data from the TPS.

2.4.4 Expert Systems

Knowledge can be typically communicated in voice, print or audio visual form by a sender to a
receiver. The receiver must decode the knowledge and integrate it into his or her existing
knowledge structure. This knowledge is commonly referred to as information.

However, intricate advancements in computing have made it possible to store knowledge as an

exploitable resource. This type of knowledge is referred to as expertise. Expertise is knowledge
which is directly applicable and it can now be stored and retrieved by computer systems.

Expert systems are examples of computer programs, along with knowledge, information and
databases, which act together to simulate the problem solving and decision making processes of
a human expert [Ford 1991].

Features characterising an expert system include the abilities to:

 Cope with data that can be uncertain or partial. For instance, a user may reply “possibly”
or don’t know to a question
 Come to uncertain or sometimes multiple conclusions
 Explain how it reached a particular conclusion

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Expert systems are increasingly being used for complex tasks including diagnosis of diseases, loan
approvals and sizing of computer systems based on workload. Expert systems not only improve
the consistency and accuracy of decisions, but also show the steps taken to reach those decisions.

The use of expert systems have resulted in increased financial profits, competitiveness and
flexibility of customer response.

Systems falling in the category of Expert Systems include Group Decision Support Systems (GDSS),
Geographic Information Systems (GIS), Executive Support Systems (ESS) and Enterprise Resource
Planning (ERP) Systems.

2.4.4.1 Group Decision Support Systems

Unlike the DSS which focus primarily on individual decision making, the Group Decision-Support
Systems (GDSS) can support group and organisational decision making. Such systems are
interactive in nature and are designed for solving unstructured problems by a set of decision
makers working together as a group. These systems were developed in response to a growing
concern over the quality and effectiveness of meetings. GDSS make meetings more productive
by providing tools for improve tasks such as planning, prioritising, organising, evaluating ideas as
well as documenting meeting proceedings. For instance, in a GDSS meeting, each attendee has a
workstation through which they communicate with other attendees.

2.4.4.2 Geographic Information Systems

A geographic information system (GIS) is a computer system for capturing, storing, analysing, and
displaying data related to positions on Earth’s surface. GIS can show many different kinds of data
on one map. This enables people to more easily see, analyse, and understand patterns and
relationships [Rutledge 2013].
Using GIS technology, people can compare location of various things to see how they relate to
each other. By presenting data in graphical form, the GIS tools help users in identity trends and
patterns in the data. Such tasks would have been complex if the data would have been presented
in traditional lists of text.
For example, the Google GIS allows users to view and interact with maps, identify routes to
destinations and view 360 degree views of specified locations.

40
2.4.4.3 Executive Support Systems

Executive Support Systems (ESS) help managers with unstructured and semi-structured problems
by focusing on the information needs of senior managers. It provides the senior managers with
critical organisation’s data in useful and concise format so that they can make quick but informed
decisions.

ESS mainly deals with data related to key functional areas such as finance, sales, production,
human resources etc. ESS also acts as an analysis tool whereby it allow the managers to
understand how changes in the input can affect the various possible outcomes.

ESS thus saves valuable time of the senior management by eliminating the need to go through
large volumes of data and helps them spend their time more effectively in brainstorming and
decision making by providing only the required data.
Some of the benefits of ESS include:

 Ability to analyse, compare and highlight trends.

 Increased organisational control.
 Improved management performance and automation of the managerial processes.
 Improved monitoring of activities across the organisation due to the immediate access to
data.

2.4.4.4 Enterprise Resource Planning Systems

ERPs are Business Management Software that allow organisations to use a system of Integrated
Applications to manage their business processes. Such systems comprise of multiple integrated
modules and a common central database. The database collects data from the various
departments and feeds the data into applications that can support nearly all the organisation’s
internal business activities. ERP provide an integrated real time view of order processing,
inventory management, production as well as resources (such as raw materials and finance). ERP
systems will be covered in more detail in later chapters.

41
 Figure 10 Enterprise Resource Planning Software

Some of the benefits of ERP include:

 Enhancing Productivity – ERP solutions can be a significant driver of growth. They can help
in complex tasks such as expanding into new geographies and adding new product lines.

 Improved Decision Making – Data that is dispersed across separate systems requires a lot
of time to be consolidated into something useful. ERP software provide an integral real
time view of data thus improving decision making.

 Improved Efficiency – ERP solutions can help improve efficiency in various functional
areas of the organisation

 Improved Customer Service – ERP packages also include Customer Relationship

Management (CRM) software which can be used to improve customer service across the
organisation.

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2.5 Summary

In this unit, we have looked at the evolution of information systems across the various eras. We
have also covered the characteristics of Strategic Information Systems as well as the criteria for
the Strategic Information System Planning (SISP) process. Moreover, we have looked at the
different levels within an organisation namely Strategic, Tactical and Operational and the
different types of information systems that are commonly used in each level.

2.6 Exercises

1. Identify three major differences between the four eras of IS: DP, MIS, SIS and IOS. Why
do planning methods have to undergo significant change now?

2. Why are SISP methodologies which existed in the 20th century no longer as appropriate
for the Internet economy?

3. What do you see as the major problems in adopting this SISP model for the extended
business network?

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UNIT 3 – STRATEGIC ROLE OF INFORMATION SYSTEMS

3.0 Introduction

In this unit, you will be looking at the strategic drivers which are changing the business
environment today. Moreover, this unit will cover some strategies which can be used for setting
up of e-businesses. Following these, we will look into the initial stages in E-business development.
Finally, we will discuss the two viewpoints which organisation adopt in order to improve
competitiveness: Value Chain and Supply Chain.

3.1 Unit Objectives

By the end of this unit, you will be able to:

 Identify the major forces which are changing the business environment today
 Review the strategies which can be used for the setting up of e-businesses
 Examine the initial stages in e-business development
 Apply Value and Supply Chain techniques
 Participate in an e-business planning process

3.2 Information Systems and Business Strategies

Deloitte Consulting is one of the major consulting companies which advises on business
strategy and its implementation. It identified six major forces which are changing the business
environment today.

 For many retail products, Internet based shopping agents will search for products,
compare prices and arrange for delivery based on client preferences. An example of a
shop bot is bizzrate.com. This has tremendous benefits for the consumers as the market
information are being shared by all participants.

 Certain types of products will move from physical to digital form to be delivered from the
producer to the consumer. These products will be delivered through the Internet

44
 medium. This will lead to reductions in costs. Products which are already being delivered
through the Internet include software, publications, e-books and music. Also, the line
being producers and consumers will be increasingly blurred as customers participate in
the product creation process.

 Internet transactions will favour the use of digital cash rather than traditional money.
Shop-bots as well as humans will make increasing use of electronic wallets to complete
their purchases. For instance, for payment of items purchased on eBay, consumers can
have their money in a PayPal account and their use their PayPal ID to effect the payment.
This reduces time and costs for both consumers and producers.

 Advancements in information technology will lead to an increase in commerce service

providers (CSP), that is, vendors providing end to end service. Examples include Dell and
Lenovo websites for purchase of computers. Customers can customise/build their
computer online, select from a choice of software, hardware and accessories and make
the payment online. The system is intelligent to prevent non-feasible configurations from
being designed and the products are delivered at the door. Moreover, priority service
pricing protocols on the Internet will be implemented to differentiate between important
economic transactions and lower-priority entertainment uses of the Internet. Technology
will also include increasing use of XML for information transfer rather than HTML. This is
because XML allows the data to be structured and clearly separated from the
presentation aspects.

 Audit and Verification procedures based on Internet platforms will be designed to address
the needs of buyers and sellers, suppliers, investors. Moreover, as a result of reduced
human interaction in the transactions, there will be increasing demands for seals of
approval. One dimension of privacy issues will become economic in nature whereby some
consumers will essentially “sell” their data to vendors in exchange for services or goods.
Others who desire more privacy may opt to have a limited participation in that market.

 Because of the increase in online transactions, Government is likely to revise the taxation
of transactions in order to deal with the inadequacy of traditional assessment and
collection methods. Policies will have to reflect consumers need for lower sales tax and
vendors lower income tax.
While the Internet offers a multitude of opportunities, many organisations have suffered by
stepping into e-business without really understanding what they wanted to achieve. The key is
to treat e-business strategy as a business decision, not just a technology one. As a first step it is
generally advisable to conduct a competitive industry analysis such as a SWOT (Strengths,
Weaknesses, Opportunities and Threats) analysis. A careful examination of the strengths and

45
weaknesses of the organisation in the electronic marketplace can result in one of the following
decisions:

 Whether to go or not to go for e-commerce

 To go for passive web based advertising
 To open online stores in addition to existing stores
 To establish separate online division within the company
 To focus on the cyber business only

In addition, prior to embarking upon e-business, it is crucial to be aware of the critical success
factors.

3.3 Critical Success factors for e-business

Research has shown that there are a series of critical factors for the success of an e-business.
These are as follows [Turban 2000]:

 Specific products/services
 Top management support
 Project Team reflecting various functional areas
 Technical infrastructure
 Customer Acceptance
 User friendly Web Interface
 Integration with corporate legacy systems
 E-commerce system Security/Control
 Competition and Market Situation
 Level of Trust between buyers and sellers
 Internal communication
 E-commerce project cost
For each of the above factors, the organisation needs to prepare a series of questions which can
identify the e-business opportunities, benefits, costs and competitors. In general, the e-
commerce strategy should answer 2 key questions:

 Why are we doing this? What do we hope to achieve?

 What is the target audience, do they use the Internet?
Embarking upon e-business requires a structured approach and in order to guide organisations
towards their e-business strategies, various frameworks have been implemented. These will be
discussed in the next section.

46
3.4 Frameworks for e-business strategies

3.4.1 Positional and Bonding factors

Research has also shown that there are 7 dimensions of an e-business strategy. These are
categorised as Positional and Bonding Factors as shown in the Table below.

Positional Bonding

Technology Leadership

Service Infrastructure
Brand Organisation Learning

Market

Table 4 Positional and Bonding Factors

Positional factors
The positional factors are the foundations upon which an organisation’s strategy is based and
from which all development originates. Each positional factor presents complex issues of its own.
Technology involves the early adoption of a new technology in order to achieve a strategic
position. One example is the use of mobile technology (m-commerce) in e-business to allow
distant employees who are working on remote sites to communicate actively.
Service relates to giving added value services to the customers. This emphasises on relationship
building and effective creation of online communities
Branding is created and reinforced through the Internet. This was demonstrated by Amazon.com
whereby they branded themselves as providers of lost cost products and good service.
Market growth is achieved through the Internet by responding flexibly to dynamic market
conditions and adopting evolutionary strategies which are in line with market growth.

Bonding factors
The bonding factors namely Leadership, Infrastructure and Organisational Learning are closely
interrelated. It requires the organisation to be open to the adoption of new technologies.
Moreover, the organisation should initiate and maintain a strategy process which will reflect a
constant change and allow the organisations to react to new business opportunities.

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3.4.2 Dot com strategies

Research conducted by Venkatraman [Venkatraman 2000] in the field of business strategies have
identified similar key factors for e-business development. These strategies are specifically
applicable for start-ups and include the factors namely vision, governance, resources,
infrastructure and alignment. Venkatraman presents five questions for the setting up of a new
dot com as follows:

 Vision: What is the vision for the dot com operations?

 Governance: How to govern the operations?
 Resources: How to allocate resources for the operations?
 Infrastructure: What is the operating infrastructure of the business?
 Alignment: Is the management team aligned for dot com?

3.4.3 Competitive or cooperative strategies

When choosing a strategy, an organisation needs to decide whether to go for a competitive or a

cooperative strategy.

Competitive Strategy can be in two forms namely:

 Offensive – Offensive strategies either make a full frontal attack to the competitor or try
to attack the competitor in a position of weakness. This can include setting up a similar
business to that of competitor. An example is Barnes and Noble against Amazon.com

 Defensive strategies aim to lower possibilities of an attack for instance, by lowering costs
of products and services. Examples are eBay and Dell.

Cooperative strategies are used to gain advantage within an industry by working with other firms
through joint adventures and strategic alliances with other organisations. However, even when
adopting cooperative strategies, there is likelihood of competition in between the individual
organisations.

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3.5 Developing Sector strategies

In order to build competitive strength, companies need a profound knowledge of the industry in
which they operate. Strategies will vary across the different sectors, so the entire market
spectrum will need to be considered from manufacturing to the service industry.

3.5.1 Manufacturing

Traditionally, this industry has been characterised by a chain of intermediaries along the
distribution chain from manufacturer to customer. There is now a rapid change as the
manufacturers have realised that they can sell directly to the customers. However, there are
challenges for instance, few manufacturers are likely to have the marketing and selling expertise
previously supplied by retail outlets. Also, small may need a broker to act on their behalf in a
much larger market place.
The Figure below shows how manufacturers of non-fast moving goods have applied the supply
demand chain and cut out the retailers to sell directly to the consumers. This means increased
savings for the consumers and increased profit margins for the manufacturers.

Figure 11 Supply Chain Structure for Non-Fast Moving Consumer Goods

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3.5.2 Mixed goods and service organisations

This relates to organisations providing different products as well as value-added services to the
customer, for instance supermarkets. Tesco in the UK, is an example of a successful e-
enterprise that provides off the shelf items as well as services such as loans, insurance and
credit facilities.
The Figure below illustrates current and potential supply chain structures for electronic
channels in retailing.

Figure 12 Supply Chain structures for Retailers

Models 1 and 2 represent the current structures for e-tailers whereas models 3 and 4 represent
potential structures for interactive home shopping (IHS). IHS differs from traditional shopping
channels in terms of the quantity and quality of information given to the customers. HIS does not
allow direct product experience, however, it does compete in terms of the variety of products
offered and the means of screening the products.
Since manufacturers now have the possibility to reach out to the customers directly, retailers and
manufacturers may enter co-opetition for survival.

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Activity
Take a look at Tesco’s website (www.tesco.com) and evaluate what makes it a success.

3.5.3 Service organisations

Traditional service organisations have also had to adopt new strategies in order to survive on the
market. For many service industries, the customer can now attain access directly over the
Internet 24 hours per day, for instance the financial services and brokerage industries. The
strategy which an organisation will use to position itself in the marketplace will depend on the
industry in which it operates, the type of products and services offered. This will also depend on
the stage the e-business development in which the organisation currently is.
Typically, the first step will be to use e-business technology to modify existing business processes
and create new ones in order to improve business performance. This strategy is known as
Channel Enhancement and will be covered in the next section.

3.6 Channel Enhancement Strategies

Channel Enhancement means using Internet to enhance sales of products and services by adding
an electronic sell channel and buy channel. In other words, such strategies will entail the
development of Business-to-Business (B2B) and Business-to-Consumer (B2C) systems.

3.6.1 Sell Channels

There are many compelling reasons for the setting up of electronic sell channels.

 The use of electronic sell channels will lower costs

 Sell channels have become a “must” in order to survive in this competitive business
environment.
 Sell channels enable efficient collection and aggregation of customer information

There are seven core components of an electronic sell Channel. These are namely:
Catalogue: E-catalogues provide more features than paper ones. Such catalogues can provide
links and images, description and product reviews from previous customers.

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Merchandising: These include sales promotions by e-coupons, vouchers by emails, frequent-flyer
offers
Configuration: This is used for more complex products. It allows customers to define their
products, calculate the price as well as choose the payment option e.g. Dell computer purchase
site
Shopping cart: This feature allows shoppers to maintain multiple items in cart before deciding to
buy. It allows them to add or remove items and calculate the total price accordingly.
Tax calculation: The tax is calculated based on the taxation laws and displayed alongside the
price of the items
Shipping: The shipping costs to the respective countries are shown. Moreover, there are
possibilities to track the location of the product after it has been dispatched.
Payment systems: This includes the use of secure electronic systems, e.g. Secure Code for
MasterCard Credit Card payments. This enhances the level of trust of the customer.

3.6.2 Buy Channels

The electronic Buy channel is a channel enhancement strategy which relates to E-procurement.
The benefits of using e-procurement are as follows:

 Employee compliance with pre-negotiated contracts

 Improved communication with suppliers
 Process improvements throughout the procurement
 Individuals are allowed to make buying decisions for items such as stationary, computers
and office furniture.
There are series of processes involved in procurement and the automation of these processes is
likely to have huge cost savings. The processes are namely:

 identification of goods/services
 Sign on to e-procurement application
 Access to authorised catalogues
 Select items to create requisition
 Approve the requisition against known rules
 creation of Purchase Orders (PO) by using ERP systems
 Transmit PO electronically
 Vendor processing PO
 Query the status of the requisition in real-time

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  Shipping of goods
 Receipt of invoice
 Payment of invoice

3.7 Organisational Impact of E-business

E-business is a disruptive technology that has serious implications on the management of the
daily operations of an organisation. It also impacts the staff and the overall organisational
business model. There is significant impact on the business processes and as a result, these need
to be re-engineered:

 Marketing: Strategies are required to lure customers to the site and consolidate
purchases
 Sales and Order Management: This includes real time updating of prices and product
specifications and product availability
 Customer Service: This is most likely conducted through email. In this respect, queries
must be responded quickly
 Procurement: This leads to reduced requisitions times and less inventory to store

These changes are likely to impact employees and their roles may need to be redefined.
Moreover, there will be a need to create new processes and job descriptions.
In addition, new information systems will be required to support not only the internal processes
but also the external transactions. These systems may need to be integrated with legacy systems
and this may lead to compatibility issues if not well planned. As the number of systems requiring
integration increases, there is also an increase in the risk of data integrity problems. This is an
issue for suppliers of Enterprise Resource Planning (ERP) packages who must ensure that there is
compatibility with the existing systems.
There is likelihood of resistance by the employees to such change. As a result, the organisation
must review different incentive and reward schemes and invest in training and re-education.

3.8 Value Chain Integration

This is the second stage in the four staged model for implementing e-business. Value Chain
Integration relates to a strong and close alliance in which a company forms a long-term
arrangement with one or several key suppliers or distributors for mutual advantage.

53
In order to improve competitiveness, organisations have adopted one of these viewpoints
namely a value chain and supply chain. These words have distinct meanings and should not be
used interchangeably. However, the main objective behind each viewpoint is to reduce costs and
enhance responsiveness to the customer.

3.8.1 Value Chain

Value Chain refers to a series of activities that an organisation in an industry performs in order
to deliver a valuable product or service. The added value can be in the form of upgrading the
goods or shifting the goods from one place to another. The value chain analysis is done in order
to understand the behaviour of costs and identify means to differentiate from other competitors
on the market. It also determines how an organisation’s value chain interacts with value chains
of suppliers, customers and competitors.
The idea of value chains has been popularised by Michael Porter and is based on the process view
of organisations. It views the organisation as a series of sub systems each with inputs, processes
and outputs. In Porters Chains, Inbound logistics, Operation, Outbound Logistics, Marketing and
Sales and Service are the primary activities whereas secondary activities include infrastructure,
Human Resource Management, Technology and Procurement [Porter 1985].

Figure 13 Value Chain [Add reference]

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3.8.2 Supply Chain

A supply chain is a system of organisations, activities and resources involved in shifting a product
or service from supplier to consumer. Some activities include transforming the raw materials into
finished product for delivery to end user. The supply chain analysis entails working across
multiple organisations to shorten the supply time in the delivery of goods and services.
In a basic supply chain, there is possibility of longer lead times and manufacturing of large lot
sizes in order to meet the demand. However, a supply chain that produces fashion, electronic or
mass customization products must respond quickly and efficiently.

3.8.3 Supply Chain Management (SCM)

Supply Chain Management aims to improve coordination and competitiveness beyond the
enterprise level to include relationships between companies. Supply chains can be found in
almost every industry linking the procurement processes, transformation of raw materials into
finished products and delivery of products to customers.

Supply chain management systems are more outward facing. They focus on helping the
organisation manage its relationship with suppliers to the planning, sourcing, manufacturing, and
delivery of products and services. Moreover, these systems provide information to help
suppliers, purchasing firms, distributors, and logistics companies coordinate, schedule, and
control business processes for procurement, production, inventory management, and delivery or
products and services.

SCM systems are beneficial to businesses in several ways.

 They allow the organisations to decide when and what to produce, store, and move.

 Information as regards new orders can be rapidly communicated and the status of these
orders can be tracked.

 Such systems can check for inventory availability and monitor inventory levels. In this
respect, inventory, transportation and warehousing costs are reduced.

 SCM systems can track shipments.

 Production of goods can be planned based on actual customer demand

 It allows changes in product design to be rapidly communicated

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3.9 Summary

In this unit, we have identified the major forces which are changing the business environment
today. Moreover, we have examined the initial stages in the setting up of an e-business namely
Segmenting Markets, Channel Enhancement and Value Chain Integration. Moreover, we have
looked at value and supply chain techniques. In the next module, we will be examining the other
key stages in the setting up of an e-business.

3.10 Exercises

1. The initial stages in E‐Business Development include Segmenting Markets and putting Channel
Enhancement strategies in place. Discuss.

2. In order to improve competitiveness, organisations have adopted the following viewpoints: Value
Chain and Supply Chain. Describe, using appropriate examples, the terms Value Chain and Supply
Chain.

3. What are supply chain management systems? How do they benefit business?

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UNIT 4 – MANAGING INFORMATION IN ORGANISATIONS

4.1 Introduction

In this module you will look at differences between e-commerce and e-business. Moreover, you
will be investigate the staged transformation model which illustrates the various key stages in
the setting up of e-businesses. In addition, you will be looking at outsourcing, the different types
of outsourcing and their impacts on people and business processes. Furthermore, strategies such
as Portfolio Analysis and Balanced Scorecard Approach will be also be covered.

4.2 Unit Objectives

 Define the concepts of business transformation

 Give reasons for the need to build an infrastructure for managing change

 Formulate an effective implementation plan

 Manage the effects of convergence on organisations and people

4.3 E-commerce and E-business

In this section, we will be looking at the impact of e-commerce in the modern business
environment. We will then review the characteristics of e-commerce followed by a brief analysis
of the core differences between e-commerce and e-business.

4.3.1 E-commerce: A tool or a strategy?

Statistics from China General Chamber of Commerce [Dell 2012] show that China’s 50 top large
size retailers experience drop of 12% of sales every year. Moreover, China’s gross imports and
exports have been falling year by year. So much so, foreign trade is making negative contributions
to the Chinese economy.

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However, as at end of 2012, transactions in China E-commerce market increased by 30.83% year
on year. Moreover, the B2B e-commerce transactions increased by 27% year on year and the
online retail trading of consumer goods increased by 64.7% every year.
These statistics show that there is an increasing competition between traditional enterprises and
E-commerce. Moreover, the population dividend, resources dividend and globalisation dividend
on which Chinese economy strived on is gradually disappearing. In other words, the e-commerce
market is on the rise and presents lots of opportunities. Nevertheless, there are also some
challenges. These are as follows:

 Physical stores compete with virtual stores

 Online and Offline businesses need integration
There was a time when there was pure e-commerce, but now and in the future, we might see
how traditional enterprises rise again through e-commerce.

Transformation to e-commerce
Enterprises are aware that e-commerce is not a new tool but a core corporate strategy. E-
commerce revolutionises and reshapes traditional enterprises and business environment at a
wider level and the transformation to e-commerce is in fact the establishment of a new business
ecosystem. Transformation to e-commerce does not imply building a website for selling products.
In fact, a successful transition requires the following:

 Incorporating the three pillars of traditional business: manufacturing, warehousing and

logistics and sales.

 Using the business models and workflows that have been adopted by traditional
businesses and that have matured over time.
Other criteria for successful transformation to E-commerce includes change in:

 Whole corporate culture and behaviour

 Decision making
 Management Model
 Shift of Workflow and Business Focus to Mobile Internet
In short, enterprises must have the “Internet Gene”.
The advent of the Internet has brought about multiple business changes. However, one core
element which did not change is the Business Logic. The essence of business logic is to achieve
the balance between demand and supply; meet the existing demand and create new demand.

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Although the business logic has not changed, there are other key changes which have occurred,
these include the change in the internet technology (Mobile Internet) , change in the tools to
achieve business logic, and also, the form of transactions have changed.
So far we have seen that transformation is key for survival and it has multiple opportunities. But
the fundamental question is how we go about this transformation process? The transformation
process will be discussed in section 4.4 of this Unit.
In this unit and the previous ones, we have been talking about e-business and e-commerce. These
terms are often used interchangeably, but they are in fact, different. Yet, there are some
similarities:

 The “e” in e-commerce and e-business refers to electronic networks. This includes the
Internet and Electronic Data Interchange (EDI) which are used to improve business
processes.

 Both e-commerce and e-business include technology infrastructure such as databases,

application server, systems management and legacy systems.

 There is creation of value chains between company and customers / suppliers and within
company itself

E-commerce focuses on outward facing processes. This includes transactions with customers,
suppliers and external partners. The activities which are of prime concern in e-commerce are
sales, marketing, order taking, customer service and purchase of raw materials. Moreover, it
involves utilising new business models and identifying strategies to increase revenue.
In contrast, e-business includes e-commerce but in addition incorporates internal processes
such as inventory management, production, product development, risk management,
knowledge management, human resources and finance amongst others. In this respect, e-
businesses are very complex to implement. They require different types of interactions as
follows:

 Interaction between the web front end and the database

 Interaction between the company and customers, business partners, suppliers and
intermediaries

 Interaction between the company and e-commerce systems, Enterprise Resource

Planning (ERP), Customer Relationship Management (CRM) and Supply Chain
Management (SCM) systems.

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The next section discusses the core stages that need to be attained in the transition to e-
business.

4.4 Transformation to E-business

The change to e-business requires a redefinition of the corporate strategy rather than just an
improvement of processes. The change process can be split into 4 stages as shown in the Figure
below.

Figure 14 Staged Transformation Model

As organisations move from left to right in the model they gain added value (for instance,
increase in revenue, cost reduction, improvement in customer relationship management). But,
they also encounter greater risk.

4.4.1 Stage 1: Channel Enhancement

The first stage includes channel enhancement which is made up of buy and sell channels. This
does not imply simply plugging in the buy and sell channels to the existing processes. Existing B2C
may choose to focus on the Sell Channel at first to increase revenue. Channel enhancement
strategies have already been covered in the previous unit.

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4.4.2 Stage 2: Value Chain Transformation

In the second stage, Organisations focus on their core value creating activities and integrate their
value chains with those of suppliers, distributors and retailers. Companies can share real time
planning, cost and production data between ERP systems. However, they have to decide with
whom to share the information with.

4.4.3 Stage 3: Transformation

In the third stage, companies may choose to focus on whether they want to be Physcos or
Knowcos. They will have different capabilities depending on their choice.

4.4.3.1 Knowcos

The Knowcos are organisations that focus on activities such as marketing, customer management
and product design. Moreover they are efficient in managing information in networks of
collaborating firms and are able to quickly respond to competitors (as regards release of new
products and services). Furthermore, they do not have to worry about costs and utilisation of
physical assets. For instance, a Knowco will design a product but will not be involved in the
manufacturing processes. The additional services of manufacturing, warehousing and
distributing amongst others will be carried out by Strategic Service Partners (SSP).

4.4.3.2 Physcos

The Physcos are organisations that are physical goods based. This implies their focus is on
becoming hubs of processing expertise and emphasise on factors such as speed of production,
quality of goods and delivery. For instance, when working on a new product, the manufacturing
processes will be executed by Physcos whereas the data rich parts such as logistics, catalogues
and back end processes will be handled by Knowcos.

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4.4.4 Stage 4: Convergence

The final stage in the transformation process is known as Convergence. Convergence is the
process whereby companies from different industries come together in order to provide goods
and services to customers. This implies that there is blurring of not only the organisational
boundaries but also of the industrial boundaries. This is made possible due to the following:

 Advent of the Internet

 Adoption of E-business
 Globalisation
 Deregulation

An example of convergence is the setting up of the Advanced Television System Committee

(ATSC). ATSC is a consortium of leading companies from various industries namely computer,
telecommunications and news channels amongst others. It consists of companies such as
Samsung, Sanyo, LG, ABC (American Broadcasting Company) and the prime aim of this
consortium was set up to establish standards for relatively low cost digital televisions.
Such forms of convergence can be very beneficial as they may influence people to use and adopt
new technologies; for instance, people who are not computer literate could potentially use the
Internet through Web-enabled televisions. This is because the television interface may be simpler
and more familiar to interact with compared to a computer.

4.4.4.1 Alliance for converging technologies model

Another model for business on the internet and interconnected world of modern business was
presented by a research and consulting group named Alliance for Converging Technologies. This
model is based on the concept of business webs. Whilst the industrial corporation was ownership
and power based, the business web is knowledge-based and relationship-based.
The business web is a system comprising of suppliers, distributors, infrastructure providers and
customers that use the Internet for their primary business communications and transactions.
Some of the characteristics of effective and competitive business webs include the following:

 Co-opetition: This relates to the fact that business web participants may simultaneously
co-operate and compete with each other.

 Customer-Centricity: In the traditional supply chains, the main focus of organisations was
on the next link to which they ship their products. However, in effective business webs,

62
 all the organisations are encouraged to concentrate on the end customers and to be
highly responsive to them.

 Internet Infrastructure: The business web participants maximise the use of the Internet
in order to reduce transaction and communication costs.

 Multi enterprise capability machine: This refers to the fact that business webs rely on
partnerships and alliances rather than becoming a monopoly. The advantage resulting
from the contribution of many enterprises include lower costs, increased production
speed and enhanced quality and innovation.

4.4.4.2 Effects of Transformation and Convergence

The transformation processes and convergence bring about significant changes in the way
businesses operate and as a result, these are likely to have effects on people and on the
business processes.

Effects on people

 People are required to embrace new roles in the organisation

 People are required to have diverse skill sets and be flexible in adopting the new work
culture
 Managers will need motivate the personnel to face the new challenges

Effects on processes

 Processes will require re-engineering to enable scalability, portability and automated

control across partner company boundaries.

 Improved data warehousing capabilities will be required so that companies are able to
improve their decision making and enhance competitiveness.

 Blind Spots: Because the chain of e-commerce is fragmented, there are some problems
which require attention and these are often called blind spots. Some of the common blind
spots are as follows:
o Real-time demand is not visible to all the companies
o It is hard to predict the manufacturing capacity in the supply chain

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 o It is hard to estimate how much inventory to store. The other problem which
emanates from this is that it may be hard to identify defects in the product. This
is because defects may not be seen until the products are actually used by the end
customers. One solution to this problem is to link production to demand, that is,
build to order. This will ensure that the products are only manufactured when
there are orders for them. Build to order also has the added benefit that there is
less inventory to store.

4.4.4.3 Drivers for Convergence

There are several factors which favour the establishment of Convergence. These are as follows:

 Increasing Customer Sophistication and Expectation: There is increasing demand for

better and convenient solutions, added value and faster delivery. Moreover, customers
are increasingly familiar with well-known brands and the quality associated to those
brands.

 Deregulation: These include the setting up of single currency zones (for instance the
Euro zone). Moreover, there are fewer regulatory impediments on business.

 Competition: There is increased competition as a result of globalisation, new entrants

and customer orientation

 Technology: Advancements in technology have made it possible to have increased

information on products and services thereby allowing companies from various
industries to converge.

4.5 Outsourcing

Convergence is an opportunistic grouping of collaborating organisations, focusing on their core

capabilities. The network of such organisations is often called the Virtual Organisation and such
a network is sustainable through Outsourcing.
Outsourcing is defined as contracting out the provision of business processes, services or
functions to external vendors. Outsourcing started as a small trend in the 1980 but now has
grown rapidly into a global phenomenon. The aim is to focus on core activities and outsource the
non-core to external vendors. The major services which are commonly outsourced include
Information Technology, Human Resources, Sales and Marketing and Administration. The prime
aims of outsourcing are to increase efficiency and reduce costs.

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4.5.1 Approaches to Outsourcing

There are 3 main approaches to Outsourcing. These are namely:

 Strategic: This involves concentrating on core activities and outsourcing other business
activities

 Transformational: Transformational outsourcing occurs when the organisations want to

bring about innovative change and adopt the global best practices in their non-core
processes

 Tactical: Internal processes are benchmarked against external providers of similar

services. If the external providers can do those processes more efficiently and at reduced
costs, the processes are outsourced

4.6 Summary

In this unit, we have covered the differences between e-commerce and e-business and the key
factors that need to be considered when embarking upon e-commerce and e-business. We have
also looked at the 4 stage model for the transformation process to e-business. It is important to
note that the 4 stage model is a simple model which shows the importance of change
management, partnering and collaboration. However, it is erroneous to assume that all business
cases can be solved in such a staged model. Other models discussed in previous units should also
be considered. It is recommended to select an appropriate model based on the organisation need
and strategy.

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UNIT 5 – EVALUATING STRATEGIES FOR INFORMATION SYSTEM AND
E-COMMERCE

5.0 Introduction

In this module, you will learn how to conduct an inventory of your company’s readiness to take
advantage of e-business. Also, this unit will introduce you to some approaches to perform
effective evaluations of your business and IS strategies. Approaches for evaluating risks and
return on investment will also be covered. Moreover, you will examine how an organisation can
create its own evaluation system.

5.1 Unit Objectives

Upon completion of this module, you will be able to:

 Investigate key strategies for evaluating an organisation’s readiness for change

 Describe the use of Simple Rules
 Describe the use of Balanced Scorecard
 Create a metrics programme and apply value-added management.

5.2 Strategic Frameworks

5.2.1 Simple Rules

The Simple Rules approach is based on some fundamental notions; it should remain flexible and
it should adapt as quickly as possible to the rapidly changing market conditions.
The overall concept of Simple Rules is as follows:

 Identify key process where the organisation can win (for example branding, product
innovation, marketing)

 Define the rules: There are 5 kinds of rules. These are:

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 o How to: These define how to distinctively execute the business processes. It also
looks at what could be unique to the organisation

o Boundary Rules: These specify resource constraints such as quantity, quality and
growth. They allow in deciding quickly which opportunities to follow

o Priority Rules: These focus on implementing ranking processes for the competitive
strategies and focus on return.

o Timing Rules: These rules focus on identifying the time to market and matching it
against the organisation’s capabilities. It also looks into setting of deadlines.

o Exit Rules: These rules state that the project should be stopped if there are signs
of failure. These rules also investigate what might compromise a project.

 There is a limit to the number of rules: between 2 and 7

o More rules can be used for higher efficiency in predictable markets. Whereas in
turbulent markets, fewer rules can be used to increase flexibility. These rules can
help organisations in making choices when they are faced with different
opportunities.
The simple rules strategy is almost like opportunity-grabbing approach and has been adopted by
used by many successful organisations namely Yahoo, e-Bay and Cisco. The Simple Rules
approach differs from the more complex, yet traditional approach which is the Portfolio
management.

5.2.2 Portfolio management

The portfolio management approach suggests that an organisation needs a balance of strategies
and product mixes and ultimately make a selection from limited resources. The portfolio can be
represented in a two-by-two matrix as shown in the Figure below.

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 Figure 15 Portfolio Management

Organisations investing in new products or services need to raise a series of questions as regards
the investment. But with the hope that the investment leads to a star product which will
eventually transform into a cash cow, thereby providing higher return than the investment.
However, it will eventually cease to deliver a meaningful return. However, another scenario has
to be considered in which the investment fails to produce a return and becomes an instant dog.
The portfolio scenario is based around two concepts of Viability and Fit

 Viability: potential payoff from project

 Fit: potential of project to align with company’s existing processes and capabilities

Figure 16 Concepts of Viability and Fit

From the above Figure, it can be noted that an initiative which is high on viability but low on fit
will need to be changed to another business. Also, a project that has high fit but low viability may
require redesigning.

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5.2.3 Co-evolutionary strategies

Until recently, competition in the market has been considered as one of the key factors driving
innovation and efficiency. However, nowadays the notion of coopetition is slowly gaining
momentum. Coopetition entails both cooperation and competition and it has been seen that
cooperation with suppliers, customers and firms producing related products can lead to
expansion and formation of new business relationships. The major differences between standard
collaboration and the co-evolutionary approach have been presented by [Eisenhardt 2000] and
are as shown in the Table below.

Traditional Collaboration in Coevolution in the

Marketplace Marketplace

Form of collaboration Frozen links among static Shifting webs among

businesses evolving businesses

Objectives Efficiency and economies Growth, agility, and

of scale economies of scope

Internal dynamics Collaborate Collaborate and compete

Focus Content of collaboration Content and number of

collaborative links

Corporate role Drive collaboration Set collaborative content

Business role Execute collaboration Drive/execute

Collaboration

Incentive Varied Self-interest, based on

individual business unit
performance
Business metrics Performance against Performance against
budget, preceding year, or competitors in growth,
sister-business share and profits
performance

Table 5 Differences between Traditional Collaboration and Coevolution in the Marketplace [Eisenhardt 2000]

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5.3 Assessing organisational readiness for change

Before selecting and applying a business plan, each organisation seeking to use the benefits of
ICT, should aim to gain an understanding of its position within the business world. There are many
models which can be used to achieve this, however, it does not necessarily mean that there is
only right model. The matrix below, created by Riggins [Riggins 1999] illustrates the combination
of factors which can allow an organisation to position itself in modern e-business.

Value Creation
5 Dimensions of Efficiency Effectiveness Strategic
ecommerce

Time Accelerate user Eliminate Establish 24x7 hour

tasks information float customer service

Distance Improve scale to Present single Achieve global

seem large gateway access Presence

Relationships Alter role of Engage in Create user

intermediaries micromarketing to dependency for
look small repeat business

Interaction Use extensive user User controls detail Users interact as

feedback of information online community
accessed
Product Use software Provide online Bundle information,
agents to automate decision support products, and
tasks tools services

Table 6 E-commerce value grid [Riggins 1999]

The above matrix provides a means to order and categorise the various features by online stores.
In order to use the grid, managers are recommended to determine which of the five dimensions
of e-commerce to target.
These should be considered as business decisions rather than technical ones. The questions that
can be asked include:

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  Should the online presence be used to reduce the time of delivery of products and
services?
 Will the online presence yield more advantage by bridging distances?
 Can it alter industry relations?
 Can it improve interaction with the user and enhance the user experience?
 Will the online presence enable the development of an entirely new product or service?

Once the dimension has been determined, the next step would entail considering the type of
value that can be created for the customer. The questions to be considered include the following:

 Improve the client’s effectiveness

 Create and maintain long term relationships with other parties?

The e-Commerce value grid may be used as a template against the activities of the organisation
and the organisation’s competitors. The extent to which an e-commerce site incorporates
several cells in the grid becomes a measure of the site’s effectiveness, and the strategy for
improvement is to seek to move into neighbouring cells. In this respect, an analysis of possible
moves within the grid will help determining the preparedness of the organisation to effect the
changes.

Overall, the goal of management should be to move from a simple online presence (reducing
time and distance barriers) to one adding value through increased efficiency and effectiveness.
Following this, the organisation can consider forming partnerships and thinking about new
products.

5.3.1 The need for an action plan

Any attempt to bring change in an organisation should be accompanied by an action plan.

Although action plans are likely to be different for different organisations, however, they should
incorporate some key components:

 Strategy: planned course of action

 Project organisation: authority, responsibility and relationships
 Roles and Responsibilities: Who will contribute what to the project?
 Systems: processes and procedures to be used within the organisation
 Training: teaching the specific skills that people need to bring change

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  Style: Management style
 Common mission: direction in which all will work to achieve organisational goals
 Technology: The IT and IS platforms that will be used

5.4 Balanced Scorecard (BSC) approach

BSC is a strategic planning and management system used in industry. Its aims are as follows:

 To align business activities to the vision and strategy of the organisation

 Improve Internal and External Communications
 Monitor organisation performance against strategic goals

BSC suggests that we view the organisation from 4 perspectives namely Customer, Financial,
Business Process, Learning and Growth. This is as shown in the Figure below [BSC 2013].

Figure 17 viewing an organisation from various perspectives [BSC 2013]

5.4.1 Customer Perspective

The customer perspective addresses the question “How do the customers see the
organisation?” In this respect, performing well in the eyes of the customers is of prime

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importance for the organisation. Through the BSC, the organisation can measure their
performance in terms how customer driven they are.

5.4.2 Internal Business Perspective

This perspective looks at the ways and means through which the organisation can improve its
business processes in order to provide better products or services to their customers. Examples
include productivity, quality and time taken to deliver the product.

5.4.3 Learning and Growth Perspective

In order to maintain competitive advantage, organisations must strive to improve performance

and promote continuous improvement. They must aim towards improving quality, reducing
costs and increasing efficiency. Overall, the emphasis is improvement in business processes
especially with regard to research, development and training.

5.4.4 Financial Perspective

Shareholder value is maximized if profitability is improved. Appropriate financial measures are

important to indicate whether the organisation’s strategy and execution are contributing to
improvement.
Each perspective can be summarised in the table below.

CUSTOMER PERSPECTIVE FINANCIAL PERSPECTIVES

How do the customers view the How do the shareholders view the
company? company?
Mission: Mission:
 To deliver the best added value to the  Assume added value for shareholders,
customer both in the short and long run
Objective: Objective:
 New products  Survive
 Partnership with customer  Prosper
Measures: Measures:

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  Percentage of the new product of  ROI and cash flow
total turnover  Market share.
 Joint development efforts.
INTERNAL BUSINESS PROCESS LEARNING AND GROWTH
PERSPECTIVE PERSPECTIVE
How can the company improve its What should the company do to
internal operations to improve the remain successful in the future?
services to customers?
Mission: Mission:
 Efficiently produce and deliver  Innovate, improve and learn to the
products and services maximum
Objective: Objective:
 Excellence in production  Technological leadership
 Excellence in deliveries  Product focus
Measures: Measures:
 Cost prices per unit  Time necessary to develop a new
 Average throughout time for order. generation of products
 Number of old products compared
to number of new products
Table 7 Balanced Scorecard Approach

The BSC approach emphasises the use of measurable goals and measurement of strategies to
drive them. An example of a balanced scorecard is as shown in the table below:

Perspective Goals Indicator

Financial Revenue US $50 million p.a.
Net Margin 15%
Customer Satisfaction per sale 8 out of 10
% of clients retained 90%
Learning Training hours per 80 p.a.
employee
Business Processes Productive: 75%
non-productive hours
Table 8 Balanced Scorecard

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5.4.5 Strategy maps and strategy trees

A BSC strategy map shows how an organisation plans to convert its various assets into
outcomes. This map includes attributes from each of the perspectives described above. For
instance, customer satisfaction is dependent on price, quality and delivery. The price further
breaks down into cost to purchase and cost to use which in turn breaks down further as shown
in the Figure below.

Cost to acquire Purchase Price

Projected ROI
Price
Cost to use Cost to maintain
Cost to operate

Does what it says Conformance

Reliability
Customer Quality
Satisfaction Does what I need Performance
Features

Arrives when they say On-time delivery

Delivery
Arrives when I need it Lead times

Figure 18 Strategy Tree (Customer Satisfaction)

5.4.6 Implementing the BSC

Once implemented, the scorecard becomes a feedback system of if-then statements linking
financial, customer, learning and business process objectives. The following steps are
recommended for successful implementation of a balanced scorecard approach:

 Focus on the strategic direction. All departments should be aware of the vision
 Identify reasonable and measurable measures of success
 Treat the BSC as a strategic initiative and not as a control system
 Link key performance measures to compensation
 Use the BSC as an everyday management tool while ensuring that all employees are
familiar with the measures
 Continuously improve the system.

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5.5 Internet Strategy Effectiveness

At the beginning of this chapter, we looked at ways of assessing an organisation’s readiness for
change. In this section, we will be looking at how an organisation can assess their online
strategy. Research has shown that there are 3 phases for effective evaluation [Plant 2000].
These include:

 Determine internal and external forces that influence the formulation of the
organisation’s e-commerce strategy.
The external forces are the customers and competitors. A more comprehensive
approach for identification can use the Porter Five Forces model as well as the SWOT
analysis.
The internal forces include the users, stakeholders and systems environment (IS, e-
commerce, resources)

 Create a metrics program based on an Internet effectiveness Scorecard

For the metrics program, 3 steps are suggested as follows:
1. Define a set of metrics to measure progress to goals
2. Have clear projected expectations for each metric concerned
3. Create automated data delivery for internal and external comparisons

These steps revolve around an Internet effectiveness scorecard which has 7 criteria on a
scale of 1 to 10. The criteria are:
1. Financial impact
2. Competitive leadership
3. Brand
4. Service
5. Market
6. Technology
7. Internet Site metrics

 Determine the effectiveness of value criteria at the ownership, process and transactional
levels

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 Plant [Plant 2000] suggests the application of e-value maps. These exist at 2 levels namely
the stakeholder and process levels. At the stakeholder level, each stakeholder determines
their most important success criteria whilst at the process level, most organisations will
use the value chain and analyse all the processes individually.

5.6 Summary

This module has investigated the stages involved in the development of an evaluation strategy.
These include assessing the organisational readiness for change, evaluating the need for change,
making performance measurements and developing a metrics based evaluation process.
Developing evaluation strategies for e-business is not a straightforward process, but rather is an
iterative learning process. Consequently, this implies that the process must be managed and also
communicated throughout the organisation.

5.7 Exercises

1. Assume you were in a position to advise the CEO of a convenience store chain about e-
business. What would you advise the CEO with regards to the Simple Rules strategy?

2. Apply the electronic commerce value grid to your own organisation or to one you are
familiar with. Identify the priorities for value creation for each dimension.

3. Summarise the main differences between Portfolio Analysis and BSC approach.

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UNIT 6 – CONTEMPORARY INFORMATION SYSTEM AND E-BUSINESS
CULTURE

6.0 Introduction

In this module, you will examine the differences between the traditional market place and the
new electronic market place (also known as the market space or virtual market). Moreover, you
will consider the organisational cultural issues associated with the creation of inter-
organisational system (IOS) and global marketplaces. In addition, you will look into the creation
of global brand names for the e-community. Some of the drivers for globalisation will also be
reviewed.

6.1 Objectives

Upon completion of this module, you will be able to:

 Evaluate the growth potential and problems of global markets

 Evaluate the cultural implications of global communities and impact of IOS
 Identify strategies for global marketing and e-branding
 Develop an approach to customer relationship management

6.2 Traditional marketplace and e-market space

Typically, it is assumed that the major advantage for using the Internet for business is expansion
in the global marketplace. However, this is not always the case. For instance, a customer
purchasing fresh fruits and vegetable from the Tesco (UK) website cannot expect to wait for their

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delivery in the U.S. The fact that the Tesco (UK) website is accessible globally does not mean that
it has entered the global marketplace. Likewise when purchasing digitised products, for instance
software on the Internet, the buyers have to ensure that the software is in a language which they
can understand. Apart from these considerations, the Internet offers a multitude of benefits.
These are shown in the Table below.

Benefits of the Internet Marketplace

For the business, reduces costs of transactions
time to market
amount of investments

For the customer, reduces Costs

Intrusiveness of branding

For the business, increases new access to existing markets

access to new markets

For the customer, improves choice

service
quality
Table 9 Benefits of the Internet Marketplace

The impact of globalisation extends beyond individual organisations. There is evidence that the
economies of countries which have companies using the Internet for business, show faster
growth than those who do not. However, when seeking expansion into the new internet market
space, building a website does not suffice. It will require the development of a technological
infrastructure available to the consumers. Moreover, it will require the evolution of the e-culture
whereby activities such as shopping, learning and communicating will be become part of daily
life.
There are 3 main characteristics which differ between the physical and internet marketplace.
These are as shown in the Table below.

Characteristics Marketplace Market space

Content Products / Goods Information

Context Physical Interaction Online interaction

Infrastructure Shops, malls, warehouses Electronic Networks

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 Table 10 Differences between physical and internet marketplace

6.3 Strategic Analysis for e-business solutions

Research has shown that there are 3 types of marketplaces [Berryman 1998]. These are
marketplaces that are controlled by buyers, sellers or neutral third parties. The types of
electronic markets are illustrated in the Table below.

Seller Information-only vendor web sites

controlled Vendor web sites with on-line ordering

Buyer Website procurement and planning

controlled Purchasing agents

Neutral Business malls

Auction spaces
Industry/Product specific search
engines

Table 11 Types of Electronic Markets

Marketplaces controlled by sellers provide a single point of access to a range of complementary

products from an industry. For example, Cisco Systems allows their buyers to configure their own
routers, prices, order and shipping status.
Buyer controlled marketplaces often act as purchase agents for its members, performing tasks
such as refining buyers’ needs and finding the best deal on their behalf.
Neutral marketplaces are set up by third party intermediaries to match many buyers to many
sellers for instance eBay.
Companies wishing to select the most suitable model for themselves should answer the following
questions to determine an appropriate strategy:

 Are there transaction savings to be realized?

o Cost reduction through increased process efficiency
o Improved reach
o Reduction in prices to buyers

 Is an electronic market for our product developing quickly?

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 o How sophisticated is the buyer?
o Is the product e-friendly?

 Would a neutral intermediary be beneficial?

o Value of the information acquired during buying and selling
o Anonymity

 Do we have substantial market share or buying power?

6.4 E-business cultures

The Internet has created a multitude of opportunities for the development of global business
through online presence. However, it also presents many challenges for those wishing to embark
or who are forced to embark in this domain. It is crucial for organisations entering the global
marketplace to recognize the cultural issues which will impact their strategies.
Culture is defined as a set of basic assumptions, shared about a group of people, about how the
world is, and ought to be. It determines their perceptions, thoughts and feelings [Schein 1996].
Schein also suggests that differences in cultural values determine human organisations and
behaviours as well as economic growth.
For instance, if a society has preference for high power distance and low risk avoidance, it will
also prefer bureaucratic and hierarchically structured organisational models whereas a low
power distance society will prefer informal communication models and flatter organisational
structure. This will inevitably have implications for global organisations where alliances are
formed from several different cultures. For example, what might be viewed as appropriate in a
US organisation might not be viewed similarly in a Japanese society. Likewise, management styles
between organisations formed from different cultures may be different. The table below
illustrates a composite model of cultural dimensions.

Dimensions Cultural Assumptions

Relationship between people Good/bad by nature
Dominance/harmony

Power distance Small/large

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 Collectivist relationships Individual/group
Active/reactive Talk/listen
Primary mode of activity Doing/being

Linear/multi-task Procedural/unpredictable

context Facts/opinions

Temporal orientation Past/present/future

Table 12 Composite model of cultural dimensions

6.5 Culture and ICT

The impact of ICT has extended far beyond organisational boundaries and has brought about user
empowerment and promoted flatter organisational structures. However, the attitude towards
organisational structures might not be the same in all societies. Moreover, culture also defines
how information is communicated in a society.
For instance, although both Japan and United States have access to the latest technologies,
research has shown that Japan relies more on oral communication rather than written or typed
mode. The determining factor appears to be whether country falls into a low or high context
culture [Hooker 2008]. Moreover, as suggested by Boisot, technology is itself an expression of
culture and through the use of ICT, an organisation redefines culture within certain boundaries
[Boisot 1998].
Therefore, it is crucial that global networked organisations tailor their global systems to reflect
cultural values and enhance performance and productivity without impacting on societal norms.

6.6 Culture and e-business

There are many challenges that global networked organisations have to face. Some of the
questions that need to be addressed by them in relation to culture are as follows:

 Is there a need for a unified culture in the global network?

 How can the organisation manage a diversity of cultures?

 To what extent should incentives be used to develop unified cultures?

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  Are stronger cultures required at the interfaces of the alliances to ensure greater
reliability?

 Will a diversity of cultures be supported only under conditions of high trust and open
communication?
There are 4 areas that need to be considered for reconstructing the organisation:

 Development of language skills

 Strong commitment to training
 An extensive documentation
 Investment in socialisation to cope with the diversity of the workforce.

6.7 Global Branding and Customer Relationship Management

Research has shown e-businesses may adopt different marketing strategies which relate to the
concept of brand image. These include:

 Brand creator
 Brand re-inforcer
 Brand follower
 Brand re-positioning

All the above mentioned strategies have their benefits and must be assessed based on the e-
business strategy. However, it is important to know how the customer relationship will be
managed and how it will be measured. This is measured by Brand Equity, which refers to the
financially related value of the brand image.
Four main drivers of brand equity are:

 Brand name awareness

 Brand loyalty
 Perceived quality
 Brand differentiation

There are seven factors which can provide an indicator of brand strength. These are namely:
1. Leadership

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 2. Stability
3. International Scope
4. Trend
5. Support
6. Protection
7. Market

In this respect, a global e-business strategy needs to develop a multi component strategy for
brand equity focusing on the abovementioned factors.

6.8 Customer Relationship Management

The Internet and e-business technologies have radically changed the relationship between
supplier and customer. Managing customer relationships is therefore a strong asset as it brings
the benefits of improved service, choice, convenience for the customer and customer retention
and repeat orders for the organisation.
There are several ways through which organisations manage their customer experiences. These
include:
Targeting the right customers
This concerns identifying the most profitable customer segment. It includes identifying those
people who are choosing competitors or those who make or influence purchasing decisions.

Owning the customer’s total experience

This relates to the amount of control which the organisation has over the user’s total experience.
The customer experience includes the following:

 Information about the products

 Choice of products
 Making a purchase
 Delivery
 Receiving accurate bills
 Filing complaints and dispute resolution

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Ultimately, an organisation is responsible for its customers’ entire experience. Even if the delivery
and service is outsourced to others, it is imperative to monitor the quality of the customer
experience.

Streamlining business processes that affect the customer

The end to end business processes affecting the customer needs to be identified and streamlined.
The processes include product design, production, shipment, delivery, billing, credit checking,
pre-sales and post-sales services. Many large organisations tend to streamline their processes to
reduce time and costs, but only a few manage to do this by focusing on the processes that have
the greatest impact on the customers. To attain success in e-business, the processes have to be
streamlined from a customer’s perspective.

Providing all round view of the customer relationship

This implies using information systems that allow the account representatives to be able to
access details as regards the service requests made by the customers as well as their service
histories. Moreover, such systems should also allow the customers to access their details directly.

Letting customers help themselves

This concerns providing the customers with features such as online selection, online product
ordering, product customisation and delivery status. Moreover, the organisation should provide
means for the customers to interact with the organisation 24 hours a day from anywhere. If all
the information required by the customers is available on the companies’ websites, the number
of phone calls that need to be attended to by the company call centres is likely to decrease.

Helping customers do their jobs

This requires the company to understand their customers’ decision making processes as well as
how their products and services fit into the customers’ job.

Delivering personalised service

This entails offering tailor made offers for each customer and alerting customers to items which
they may be interested.

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Fostering community
This concerns setting up online communities such as blogs and chat rooms for the customers.
Customers gain a lot of value by interacting with each other and the community aspect of a
website shows the customers that they are being taken care of.

6.9 Summary

The widespread use of the Internet implies that enterprises can no longer control the information
and knowledge available to their customers. Consequently, enterprises should leverage the
knowledge of their customers in order to create value for the organisation as well as the
community at large.
The complex economic, social, political and legal e-business environment must be addressed by
managers assuming a policy making role far beyond than would be normally expected in
traditional marketplace. E-business organisations in the global marketplace have to learn from
issues faced by multinationals and cross-cultural organisations and bring about innovation
constantly to their marketplaces.

6.10 Exercises

1. Apply these four questions to your own organisation, identifying the specific features
that are applicable.
a. Are there transaction savings or benefits to be realised?
b. Is an electronic market for your product developing quickly?
c. Would a neutral intermediary be beneficial?
d. Do you have substantial market share or buying power?

2. Using the knowledge you have gained from this course Management Information
Systems, identify five specific opportunities and five threats to your organisation from
entry into the global marketplace.

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References

[Boisot 1998] Boisot, M., 1998. Knowledge assets: securing competitive advantage in
the information economy. New York, NY: Oxford University Press.

[BSC 2013] Balanced Scorecard Basics. Balanced Scorecard Institute, Strategy

Management Group [online]. Available from:
http://balancedscorecard.org/Resources/AbouttheBalancedScorecard/ta
bid/55/Default.aspx
[Accessed on November 2013]

[Burn 2012] Burn, J.M., 2012. Management Information Systems. Commonwealth of

Learning (COL), Symbiont Ltd (ed), Otaki, New Zealand.

[Dell 2012] Dell., 2012. E-Commerce 3.0: Rebuild the eCommerce Ecosystem. Study
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[Eisenhardt 2000] Eisenhardt, K. E., Galunic, D. C., 2000. Coevolving. At Last, a Way to
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91-101.

[Ford 1991] Ford, N., 1991. Expert Systems and Artificial Intelligence: An information
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[Hooker 2008] Hooker, J., 2008. Cultural Differences in Business Communication. Tepper
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[Medicare 2013] Medicare. The Official US Government Site for Medicare.

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[Plant 2000] Plant, R., 2000. E-Commerce – Formulation of Strategy. Financial

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[Porter 1985] Porter, M.E., 1985. Competitive Advantage. New York. Free Press

[Riggins 1999] Riggins, F.J., 1999. A Framework for identifying Web Based Electronic
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[Rutledge 2013] Rutledge, K., et al., 2013. Geographic Information System. National
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[Schein 1996] Schein, E. A., 1996. Three Cultures of Management: The key to
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