Information Systems Management Week 4 Part 1

Information Systems Management - Week 4, Part 1

• Value Chain: A chain of activities that add value to products and services. These activities are interdependent and can create competitive advantages.

• Primary Activities: Directly contribute to the value of goods and services produced by a company. Examples include inbound logistics, operations, outbound logistics, marketing & sales, and services.

• Secondary Activities: Support the primary activities, like infrastructure, human resources, technology development, and procurement.

Activities in the Value Chain

• Infrastructure: Activities such as accounting, finance, planning, and general administration.

• Human Resources: Recruiting, training, promotion, scheduling, compensation, and benefits design.

• Technology Development: Intranet & extranet networking, system planning, and development.

• Procurement: Supplier relationships, price negotiation, purchasing planning, and contracting.

• Inbound Logistics: Activities like scheduling, receiving, inspection, storage, and unloading of raw materials and inventory.

• Operations: Transforming raw materials or inputs into final products. This includes quality assurance, assembly, and packaging.

• Outbound Logistics: Distributing finished goods to customers, involving scheduling, storage, delivery, and tracking.

• Marketing & Sales: Includes market analysis, promotions, pricing, and sales management.

• Services: Activities like customer service, maintenance, and handling complaints.

The Role of IS in the Value Chain

• IS can improve operational efficiency through Enterprise Resource Planning (ERP) and Decision Support systems.

• IS can improve customer and supplier intimacy through Supply Chain Management (SCM) and Customer Relationship Management (CRM) systems.

Possible IS for Each Value Chain Activity

• Firm Infrastructure: Web-based financial systems, ERP, investor relations.

• Human Resources: Self-service tools, internet-based training, personnel information sharing.

• Technology Development: Collaborative design tools, knowledge directories, real-time access to information.

• Procurement: Real-time order processing, inventory tracking.

• Inbound Logistics: Real-time scheduling, warehouse management, and advanced planning.

• Operations: Information exchange, scheduling, component supplier interaction.

• Outbound Logistics: Order tracking, customer-specific agreements, real-time delivery updates.

• Marketing & Sales: Online sales channels, dynamic pricing, customer information access, tailored marketing.

• Services: Online support, service request processing, parts availability, and real-time updates.

Benchmarking and Competitive Advantage

• Benchmarking: Comparing value chain (business processes) to competitors to identify efficiencies and effectiveness gaps.

• Competitive Advantage is achieved by first identifying areas for improvement in your value chain, identifying candidate business process applications and selecting the most critical ones, and then implementing the chosen processes.

Industry Value Chain

• A framework to visualize the interconnected steps to bring a product or service to market in a particular industry.

Value Web

• A collection of firms working together to create a product or service. Using IS to coordinate their values chains. The participating firms coordinate their steps to deliver jointly to the market.