ch. 07 strategic information systems (sis) rev 2: apr., 2015 prof. euiho suh postech strategic...
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Ch. 07 Strategic Information Systems (SIS)
Rev 2: Apr., 2015
Prof. Euiho Suh
POSTECH Strategic Management of Information and Technology Laboratory(POSMIT: http://posmit.postech.ac.kr)
Dept. of Industrial & Management EngineeringPOSTECH
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Strategy Tree (1/2)
Information(IT, IS)
Automation
Innovation
■ Use of Information
■ Automation
■ Strategic Use of Information
Automation
Work Automation
Manufacturing Automa-tion
Strategic Information Sys-tem(SIS)
Non-strategic Information System (NSIS)
StrategicUse of Information
(IT, IS)
Success
Failure
2. Strategic Information System1) Introduction
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Strategy Tree (2/2)
Strategic Management (SM)
Non-strategic Management (NSM)
StrategicManagement
Success
Failure
■ Strategic Management
■ Information Strategy Tree
Information
Automation
Innovation
Work Automa-tion
Manufacturing Automation
NSIS
SIS SM
NSM
2. Strategic Information System1) Introduction
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SIS
■How can you define SM in terms of P5FCM ?
How can you define SIS in terms of P5CFM ?
How can you define SIS in terms of VC ?
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Evaluation on an IS (Reversely, factors in designing an IS)
■ When you evaluate an IS…
1. Type of IS ?
2. Process automation or innovation ?
3. If automation , then, work or manufacturing ?
4. If innovation, which Hammer’s principle is applied ?
5. Is it an SIS or not ?
6. If SIS, which competing forces in P5FCM to be affected ?
7. If SIS, which activities in VC to be reinforced ?
.
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Information Technology Strategy Case (1/10)
■ Marriott Hotel
Saving and managingVIP customers’ information
Allowing customersto check in and check out
without going to the front desk
Usually business people or young couple mind tocheck in and check out at the hotel front desk
Problem
“Customer Relationship Management (CRM)”
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Information Technology Strategy Case (2/10)
■ Asiana Airlines
• Risk of loss• Higher likelihood of terrorist attacks
Difficulties in tracking and managing baggage
• RFID: Radio Frequency Identification• Automatic identification method, relying on storing and re-
motely retrieving data using devices called RFID tags or transponders
RFID-enabled air baggage tracking and control system
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Information Technology Strategy Case (3/10)
■ G-market
Problems
E-security • Weak payment system• Certificate user by ID/password
Reliability of transaction
• Deception of trade• Weak warranty of the products
quality
Solution
SSL complementary sys-tem
(SSL: Secure Sockets Layer)
Escrow service
Escrow service of G-market
Customer G-market Seller1. Purchase/Pay-ment
2. Delivery Re-quest
3. Sending Prod-uct
5. Transferring Payment
4. Receipt Comfir-mation
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Information Technology Strategy Case (4/10)
■ Shinhan Bank
Problem
Characteris-tics of
Financial Product
• Intangibility• Geographical dispersion• Balancing growth with
risk• Lack of Special Identity• Individual Marketing Sys-
tem• Inseparability
SRMS (2000)
• Catching Symptom of Customer Secession• Scheduling for Salespeople• Customized Portfolio
Back-end Office System Middle Office SystemFront Office System
Data Collecting and Auditing Mining
DB
AnalysisCRM Mart
CRMDB
Inter-nal
Data
Exter-nal
Data
Visualized An-swer tool
Visualized Campaign Evaluating tool
Visualized Campaign
Design tool
Data MiningSystem
OLAPSystem
CampaignManagement
System
Call Center
Branch
Internet Banking& Tele-Banking
CD / ATM
Tele-marketer
DMI
Customers
CustomerInformation
CampaignInformation
SamplingTransformationTransmission
“Customer Relationship Management (CRM)”
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Information Technology Strategy Case (5/10)
■ Korail
KOVIS
• PM (Plant Management)• SEM (Strategic Enterprise manage-
ment)• AM (Asset Management)• CM (Cost Management)• FA (Financial Accounting)• MA (Management Accounting)• MM (Materials Management)• ESS (Employee Self Service)
Problems
• Symbol of “Red Tape”• Criticism towards the bureaucracy of
Korail• Opening of KTX, less competitive
compared to vehicle transportation• Increase in deficit, bad management in-
dex
“Enterprise Resource Planning (ERP)”
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Information Technology Strategy Case (6/10)
■ HANSSEM
Clicks and Bricks
• To separate on-line business and off-line business• To running their own e-commerce site, “HANSSEM
mall”• To sell on-line only product, “SAM”• To expand types of channels to meet customers
Problems
• Economic depression in Korea• Construction industry with prob-
lems• Appearance of new multinational
competitors such as IKEA• Decrease of the number of mar-
riages that could be potential cus-tomers
• Low price competition through home shopping
“E-commerce”
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Information Technology Strategy Case (7/10)
■ SK Energy
Communities of Practice (CoP)
• Seoul Logistics Support Team: Set in the rear in order to prevent shipping excess• Seoul oil pipeline team: set in the rear in order to prevent error from occurring due to uneven
flow, bubble formation• Ulsan refinery production team: set in the rear in order to prevent error from occurring due to
uneven flow, bubble formation• Ulsan Operations: If certain conditions are met, it makes no difference
Problems
• Busan Logistics center: Set stop valve frontal/rear due to crowded space
With the help of KM system (people of diverse backgrounds, geographies) it is concluded that setting up in the rear area is the better way to go
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Information Technology Strategy Case (8/10)
■ Hyundai Capital
Multidimensional OLAP (MOLAP)
• Approach to enable end-users to interactively analyze multidimen-sional data from multiple perspec-tives for their decision making
Problems
• High risk in capital business• Business cycle frequency is reduc-
ing and volatility is increasing• Capital company has to predict
the risk factors and control them Prediction is important, but the more important point is accuracy and risk considering
“OLAP”
MOLAP of Hyundai Capital
Result
• Easily analyze risk factors without additional education• Manage risk by using visual aids such as screen• Identify the progress from the present to the future• Increase the work efficiency
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Information Technology Strategy Case (9/10)
■ jetBlue Airways
Problems
• American low-cost airline• Wanted feedback by customer
- Too large customers to handle with traditional and low-cost CRM solu-tion- Need to make new competitive advantage against major airlines
Solution
• sCRM- Social CRM(sCRM) is a philosophy and busi-ness strategy designed to engage the customer in a mutually beneficial relationship- It’s supported by social technology, business rules, workflow and processes
Set up Twit-
ter ac-count
in spring
of 2007
Moni-toring duties
be-came more inten-sive
In 2009
spring, team was
orga-nized
Make Twitter more con-ve-
niently and
di-rectly
Process Process
Exam-ple
customer's complaint
jetBlue’s answer oncustomer's complaint + real actions to solve it
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Greening the data center
Information Technology Strategy Case (10/10)
Problems
• High power consumption for IT devices and data centers
• Searching on the internet gener-ates carbon dioxide Cause the global warming
Electric Power Carbon dioxide0
0.5
1
1.5
2
2.52.26 billion
1.46 million
※Unit: metric tons
Add new CRAC controller
Use Free-coolingby evaporation
Use thermal modelingwith Computer Room
Air Conditioner (CRAC)
“Green IT”
Sustainable Buildings
• Eliminating pollutants through Google’sHealthy Materials Program
• Pursuing design and operational strategiesthat reduce energy and water use
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Note
■ MIT PPT material (SIS)– http
://ocw.mit.edu/courses/sloan-school-of-management/15-565j-integrating-esystems-global-information-systems-spring-2002/lecture-notes/lecture02.pdf
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Reference
■ O’Brien & Marakas, “Introduction to Information Systems – Sixteenth Edition”, McGraw – Hill, Chapter 1
■ O’Brien & Marakas, “Introduction to Information Systems – Sixteenth Edition”, McGraw – Hill, Chapter 2
■ Euiho Suh, “Information & Management (PPT Slide)”, POSMIT Lab. (POSTECH Strategic Management of Information and Technology Laboratory)
■ Euiho Suh, “Role of Information Systems (PPT Slide)”, POSMIT Lab. (POSTECH Strategic Management of Information and Technology Laboratory)
■ Euiho Suh, “Strategic Information Systems (PPT Slide)”, POSMIT Lab. (POSTECH Strategic Management of Information and Technology Laboratory)