1. Management Information Systems Competitive Advantage with Information Systems across Organizations Chapter 8

2. 2 This Could Happen to You DSI relies on inbound logistics to obtain components and materials DSI business processes and supporting information systems cross into other organizations Is there a way to use cross-organizational information systems to gain labor productivity?

3. 3 Study Questions Q1. How do inter-organizational information systems provide competitive advantages? Q2. What is the potential conflict concerning information systems between customers and vendors? Q3. What are the major categories of inter-organizational information systems? Q4. What technology is required for inter-organizational IS? Q5. How do inter-organizational information systems benefit small businesses? Q6. How will the increasing use of inter-organizational information systems change organizational structures?

4. 4 Q1. Information Systems that Cross Organizations Integration of multiple-company operations  Selling  Purchasing  Check-clearing  Credit card processing

5. 5 Value Chain Activities across Organizations Figure 8-1

6. 6 Inbound Logistics Manufacturers  Acquisition, inventory, and control of raw materials and parts Non-manufacturers  Acquisition, inventory, and control of finished products  Operations activities only

7. 7 Customer-Centric Activities Principal flows concern activities with customer  Solicitation/order, shipment, query/response  Facilitates organization’s competitive strategy Information systems must be designed to support different strategies  Lowest cost vendor  Dell Computers  Differentiation based on quality  Laguna Tools

8. 8 Q2. Potential Conflicts Processes and flows exist between both company and customers and company and vendors  For DSI to minimize cost of ordering, vendor must minimize cost of selling Information systems can be designed to minimize processing costs for both customers and suppliers  Off-the-shelf software  DSI uses AutoCad  Custom software can be created to achieve mutual benefit

9. 9 跨組織的價值鏈活動事務之替代模型

10. 10 顧客 ∕ 賣家流程的兩個不同觀點

11. 11 Q3. Categories of Inter-Organizational Information Systems E-commerce Customer relationship management (CRM) Supply chain management (SCM) Inter-organizational transactional processing

12. 12 E-Commerce Buying and selling goods and services over the Web  Vendors sell from Web-storefronts  Web servers process http protocol  Operate order-entry application software  Customers access through Web browsers E-commerce clients are thin Types:  B2C, B2B, B2G

13. 13 Customer Relationship Management (CRM) Track interaction with customers Customer may install portion of vendor’s CRM on their system to facilitate purchasing  Thick-client software  Adds sufficient value to overcome risks of unknown software Vendor creates competitive advantage  Creates high switching costs

14. 14 Supply Chain Management (SCM) Integrates primary inbound logistics business activity Systems source, order, settle

15. 15 SCM 系統的某些功能

16. 16 Inter-Organizational Transaction Processing Systems process routine transactions between organizations Oldest form of cross-organizational IS  Automated check clearing Handles repetitive tasks

17. 17 MIS in Use: Dun and Bradstreet Sells Reports Using E-Commerce D&B collects and publishes financial data and analysis Use Web-based e-commerce  Site runs 24/7  Saves data entry and administrative costs  Can change product easily  Mines customer purchase information

18. 18 Guide: A Trojan Horse? Manufacturers install programs on distributor’s computers allowing direct ordering from CRM  Reduces lead time  Smaller inventory  Bypasses security  Manufacturer’s programs will be behind firewall  May have access to entire system How do you balance security and savings?

19. 19 Q4. Inter-Organizational Ordering/Selling Systems Sellers induce buyers with e-commerce and CRM Buyers want sellers to use SCM Organization with system is server; organization utilizing system is client

20. 20 Technologies Used in Ordering/Selling Systems (1) Email  Limited capacity  Attachments may be problematic  Security problems FTP  Greater capacity  Can be secured with password protection Thin-client e-commerce  Client needs only browser to participate  No software installed

21. 21 Thick-client e-commerce  Requires software be installed on client’s system  Security risks  Can produce administrative problems Joint custom applications  Both organizations meet to establish requirements  System jointly designed Technologies Used in Ordering/Selling Systems (2)

22. 22 顧客在跨組織科技選擇上成本的連續

23. 23 Q5. Benefits of Inter-Organizational Systems Organizations can focus on their core competencies  Can outsource most activities  Avoid time and expense of building infrastructure  Reduces capital requirement  Requires fewer employees Lowers payroll and associated costs  Shortens time to market

24. 24 跨組織資訊系統讓價值鏈活動事務能外包出去

25. 25 Inter-organizational information systems produce virtual organizations  Value chain activities shared among several entities Organizations look for the opportunity cost of time of employee performing activity to be greater than cost of outsourcing Employees should work in business activity that is directly in line with organization’s specialty, or may be outsourced Q6. Resulting Changes in Organizational Structure from Outsourcing

26. 26 Ethics Guide: The Ethics of Supply Chain Information Sharing (1) Distributor has developed information system that reads data up and down supply chain  Because you can read both directions, you know retailers are in need of product and manufacturer’s inventory is low. Believing you have only supply, you increase price claiming extra transportation costs.  Competitor has large supply as well and does not increase price, so you sell no product. You want to track competitor’s inventories, which can be estimated from information gained from reading supply chain.

27. 27  Your agreement with customers permits you to query their inventory levels for orders they have with you. System has a flaw and allows you to query all orders.  Your agreement with customers permits you to query their inventory levels for orders they have with you. Another retailer’s security is flawed. One of your developers writes a program allowing you to exploit the flaw and view all of their information. Ethics Guide: The Ethics of Supply Chain Information Sharing (2)

28. 28 How Does This Knowledge Help You at DSI? (1) Inter-organizational information systems can be used to improve the in-bound logistics  DSI sends ftp AutoCad files to manufacturers and fabricators  Each project is color coded, and the parts are color coded for easy identification  DSI does not use JIT system  Must move components in inventory  Would require serious procedural changes

29. 29 Could use RFID tags for easier locating of parts  Save labor  Reduces damage because of less handling How Does This Knowledge Help You at DSI? (2)