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INFORMATION SYSTEMS
INFORMATION SYSTEMS
OPENING CASES
Aerosoles IPL
AEROSOLES
AEROSOLES SCENARIO
Aerosoles is a 20 year old footwear company that has been providing high quality, fashionable shoes at affordable prices to department stores and specialty stores internationally. Aerosoles has over 700 employees to help design, import, distribute, and market a broad range of shoes such as boots, casual, dress, sandals, and sport alongwith accessories.
Moving beyond its reputation as a designer brand, Aerosoles has evolved into a multichannel retailer with 130 retail stores in the United States and worldwide. It also operates a direct channel comprised of a catalog and ecommerce site.
The company launched www.aerosoles.com in 1999, but later Aerosoles realized the site was in need of an upgrade. "The site was hosted by our technology partner, but this presented its share of challenges," Magnus Gustafsson, VP of Direct Marketing, Aerosoles, told Chain Store Age magazine.
The current site offered very limited marketing and reporting capabilities, was not scalable, and had no integration with their ERP system. Thus, majority of Aerosoles customers turned to the call center to check inventory, place orders, and track shipments.
"The configuration affected data inventory upgrades and the company lacked insight into customer information. Most importantly it was merely an order taking vehicle," he said. We were ready for a stronger web presence, a better online experience, and a more seamless customer experience that mimicked the physical store experience. It was time to re-launch the site on a new, more flexible platform." said Gustafsson
Information system and business
Businesschallenges
Informationsystem
BusinessSolutions
Technology
Organization
Management
•Develop team strategy
•Evaluate players
•Coach players
•Match videos of plays with statistical data
•Tag and index plays
Capture video
Maintain protected web site
Download video to ipods
•Analyze player performance
•Analyze team performance
•Lack of performance statistics
•High cost of players
•Intense competitive pressure
•Improve performance
•Increase revenue
ROLE OF INFORMATION TECHNOLOGY
In Asia Pacific SMB’s spent around US $153 billion on IT and telecomm.
China ,Korea and India alone make up more than 50% of Asia Pacific spending according to the latest study by New York based Access Markets International (AMI) Partners Inc
INFORMATION TECHNOLOGY CAPITAL INVESTMENT
0100200300400500600700800900
1981
1987
1993
1999
2004
2006
2008
IT INVESTMENT
INFORMATION SYSTEMS AND TRANSFORMATION IN BUSINESS
58% Americans have used a cell phone or mobile handheld devices for activities other than voice communications such as texting, emailing taking a picture, looking for maps or directions or recording video
By june 2008 more than 80 billion businesses had dot com internet sites registered ( 60 million in US alone ) ( verisign 2008 )
85% of the online users engaged in e commerce . Ireland 91%, 86% in turkey ,India and UAE jointly 84%. 67 million Americans read blog,21 write blogs . Myspace and Facebook attract over 70 and 30 million visitors a
month E commerce and internet advertising are booming google’s online
ad revenue surpassed $ 16.5 billion in 2007 and internet advertising continues to grow at more than 25 % a year reaching more than $28 billion in revenues in 2008
OPENING CASES
Aerosoles IPL
AEROSOLES
AEROSOLES SCENARIO
Aerosoles is a 20 year old footwear company that has been providing high quality, fashionable shoes at affordable prices to department stores and specialty stores internationally. Aerosoles has over 700 employees to help design, import, distribute, and market a broad range of shoes such as boots, casual, dress, sandals, and sport alongwith accessories.
Moving beyond its reputation as a designer brand, Aerosoles has evolved into a multichannel retailer with 130 retail stores in the United States and worldwide. It also operates a direct channel comprised of a catalog and ecommerce site.
The company launched www.aerosoles.com in 1999, but later Aerosoles realized the site was in need of an upgrade. "The site was hosted by our technology partner, but this presented its share of challenges," Magnus Gustafsson, VP of Direct Marketing, Aerosoles, told Chain Store Age magazine.
The current site offered very limited marketing and reporting capabilities, was not scalable, and had no integration with their ERP system. Thus, majority of Aerosoles customers turned to the call center to check inventory, place orders, and track shipments.
"The configuration affected data inventory upgrades and the company lacked insight into customer information. Most importantly it was merely an order taking vehicle," he said. We were ready for a stronger web presence, a better online experience, and a more seamless customer experience that mimicked the physical store experience. It was time to re-launch the site on a new, more flexible platform." said Gustafsson
Information system and business
Businesschallenges
Informationsystem
BusinessSolutions
Technology
Organization
Management
•Develop team strategy
•Evaluate players
•Coach players
•Match videos of plays with statistical data
•Tag and index plays
Capture video
Maintain protected web site
Download video to ipods
•Analyze player performance
•Analyze team performance
•Lack of performance statistics
•High cost of players
•Intense competitive pressure
•Improve performance
•Increase revenue
ROLE OF INFORMATION TECHNOLOGY
In Asia Pacific SMB’s spent around US $153 billion on IT and telecomm.
China ,Korea and India alone make up more than 50% of Asia Pacific spending according to the latest study by New York based Access Markets International (AMI) Partners Inc
INFORMATION TECHNOLOGY CAPITAL INVESTMENT
0100200300400500600700800900
1981
1987
1993
1999
2004
2006
2008
IT INVESTMENT
INFORMATION SYSTEMS AND TRANSFORMATION IN BUSINESS
58% Americans have used a cell phone or mobile handheld devices for activities other than voice communications such as texting, emailing taking a picture, looking for maps or directions or recording video
By june 2008 more than 80 billion businesses had dot com internet sites registered ( 60 million in US alone ) ( verisign 2008 )
85% of the online users engaged in e commerce . Ireland 91%, 86% in turkey ,India and UAE jointly 84%. 67 million Americans read blog,21 write blogs . Myspace and Facebook attract over 70 and 30 million visitors a
month E commerce and internet advertising are booming google’s online
ad revenue surpassed $ 16.5 billion in 2007 and internet advertising continues to grow at more than 25 % a year reaching more than $28 billion in revenues in 2008
WHAT’S NEW IN MISTECHNOLOGY
CHANGE BUSINESS IMPACTCloud computing platform emerges as a major business area of innovation
A flexible collection of computers on the internet begin to perform tasks traditionally performed on corporate computers
More powerful, energy efficient computer processing and storage devices
Intel’s new PC processor chips consume 50% less power , generate 30% less heat , and are 20% faster than the previous models ,packing over 400 million transistors on dual core dual core chip
Growth in software as SaaS ( Software as a service)
Major business applications are now delivered online as Internet service rather than a boxed software or custom systems
Netbooks emerge as a growing presence in the PC marketplace , suboften using open source software
Small , lightweight , low cost , energy- efficient , net- centric notebooks use Linux,Google Doc s ,open source tools , flash memory , and the internet for their applications , storage and communications
A mobile digital platform emerges to compete with PC as a business system
Apple opens its iphone software to developers, and then opens an Applications store on iTunes where business users can download hundreds of applications to support collaboration ,location- based services , and communication with colleagues
WHAT’S NEW IN MISMANAGEMENT
CHANGE BUSINESS IMPACT
Managers adopt online collaborations and social networking software to improve coordination, collaboration , and knowledge sharing
Google Apps,Google Sites,Microsoft’s Windows Sharepoint services and IBM’s Lotus Connections are used over 100 million business decision makers worldwide to support blogs ,project management , online meetings , personal profiles ,social bookmarks and online communities
Business intelligence applications accelerate
More powerful data analytics and interactive dashboards for providing real –time performance management to managers to enhance management control and decision making
Managers adopt million of mobile tools such as smartphones and mobile internet devices to accelerate decision making and improve performance
Rhe emerging mobile platform greatly enhances the accuracy , speed , richness of decision making as well as responsiveness to customers
Virtual meeting proliferate Managers adopt telepresence video conferencing and web conferencing technologies to reduce travel time , and cost , while improving collaboration and decision making
WHAT’S NEW IN MISORGANIZATION
CHANGE BUSINESS IMPACTWeb 2.0 applications are widely adopted by the firms
Web-based services enable employees to interact as online communities using blogs ,wikis , email and instant messaging services.facebook and MySpace create new opportunities for business to collaborate with customers and vendors
Telework gains momentum in the workplace
The internet ,wireless laptops ,iphones , and BlackBerrys make it possible for growing numbers of people to work away from traditional office
Outsourcing production Firms learn to use technologies to outsource production work to low wage countries
Co- creation of business value Sources of business value shift from products to solutions and experiences and from internal sources to networks of suppliers and collaboration with customers .Supply chains and product development becomemore global and collaborative; customer interaction helps firms define new product and services
GLOBALIZATION opportunities and challenges
Foreign trade as a percentage of GDP ( in rupee terms ) was over 25% in 2006 up from 14.1 percent in 1990-1991.
India’s share in global trade , including trade in merchandise and service sector , has increased from 1.1 percent in 2004 to over 2.0 percent in 2009 .
U.S exports to India $4,101.1 million and imports from India worth $11,818.3
Many firms derive half their revenues from foreign operations.For instance ,revenues are about $25 million a year and profits are “several million dollars”
80% of toys sold in the US are manufactured in China ,while about 90% of PC manufactures in China use American –made Intel or Advanced Micro Design (AMD ) chips
Manufacturing is now a very small part of US employment (less than 12%)
About 300,000 service jobs move offshore to lower wage countries
DIGITAL FIRM A digital firm is one in which nearly all of the organization’s
significant business relationships with customers , suppliers and employees are digitally enabled and mediated.Core business processes are accomplished through digital networks spanning the entire organization or linking multiple organizations.
Key corporate assets –intellectual property ,core competencies and financial and human assets – are managed through digital means
Any piece of information required to support key business decisions is available anytime and anywhere in the firm
Digital firms sense and respond to their environment far more rapidly than traditional firms, giving them more flexible global organization and management
In digital firms, both time shifting and space shifting are the norm Eg Cisco and Dell
Strategic business objectives of information systems
Business strategic Objectives
Business processes
Telecommunication
Data Management
Hardware
software
Business firm Information system
THE INTERDEPENDENCE BETWEEN ORGANIZATIONS AND INFORMATION SYSTEMS
OBJECTIVES Operational excellence
eg Walmart achieved close to US $379 billion in sales –nearly one tenth of retail sales in the United States.
New products ,services and business models Eg online music industry
Customer and supplier intimacy Improved decision making Competitive advantage Survival
Information systemDefinition:IS can be defined technically as a set of interrelated components
that collect ( or retrieve ), process ,store and distribute information to support decision making and
In addition to support decision making , coordination and control information systems may also help managers and workers analyze problems ,subjects and create new products.
Information systems contain information about significant people ,places and things within the organization or in the environment surrounding it
Three activities in the information system :InputOutputProcessing
Functions of an information system
INFORMATION SYSTEM
INPUT OUTPUT
PROCESSINGCLASSIFYARRANGE
CALCULATE
FEEDBACK
ORGANIZATION
ENVIRONMENTSUPPLIERS CUSTOMERS
REGULATORY AGENCIES
STOCK HOLDERS COMPETITORS
DIMENSIONS OF INFORMATION SYSTEM
organizations technology
management
Information
System
INFORMATION SYSTEMS ARE MORE THAN COMPUTERS
ORGANIZATIONS
Senior
Management
Middle Management
Scientists and knowledge workers
Operational management
Production and service workers
Data workers
LEVELS IN THE FIRM
INFORMATION SYSTEM AS A VALUE ADDITION(Organization and Management)
FirmProfitability
And stategic position
Data collection
And storage
Transformation into business systems
Dissemination
planning coordinatingcoordinating
controlling Modelling and decision making
Business Process
Management activities
Supply chain Management
Enterprise Management
Customer Management
Knowledge
Management
COMPLEMENTARY ASSETS
Are those assets required to derive value from a primary
investment.eg new business models ,new business processes ,management behavior , organizational culture ,or training
These investments in organization and management are known as organizational ad management capital.
COMPLEMENTARY SOCIAL, MANAGERIAL , AND ORGANIZATIONLA ASSETS REQUIRED TO OPTIMIZE
RETURNS FROM INFORMATION TECHNOLOGY INVESTMENT
Organisational Assets Supportive organizational culture that values efficieny and
effectiveness Appropriate business model Efficient business process Decentralized authority Distributed decision- making rights Strong IS development team
Managerial Assets Strong senior management Incentives for management innovation Teamwork and collaborative work environments Training programs to enhance management decision skill
Social Assets The internet and telecommunication environment IT enriched educational programs raising labor force computer literacy Standards ( both government and private sector) Laws and regulations creating fair , stable market environments
CONTEMPORARY APPROACHES TO INFORMATION SYSTEMS
MIS
OperationsResearch
Sociology
EconomicsPsychology
ManagementScience
Computer Science
Technical
Approaches
CASE STUDY
CONTINENTAL AIRLINES:THIS CALL IS BEING MONITORED
If you’ve ever placed a call to any big company’s customer service department .you’ve heard the caveat “ This call may be monitored for quality assurance purposes” But is anyone really listening? Someone is – or atleast the computers are –at continental Airlines.
To build the customer loyalty Continental enlisted the help of Witness Systems whose call center software does more than a eavesdrop. it records conversations and captures every keystroke ,so managers know whether the right actions are taken.And because the exchanges reveals what customer really customers really want, Continental is also mining the data to craft marketing plans and shape overall strategy
Before the s/w was installed in 2001,Continental’s agents were unable to resolve about 6%of the 60 million calls they fielded annually . Instead these problems were routed to an internal help desk .The witness data revealed that some agents “weren’t attempting to look up the answers on their own” says Andre Harris “,director of reservations training and quality .New standards were put up in a place and within a year nearly 20% fewer calls were being sent to help desk ,saving the company $1
Harris soon realized that the data could be a treasure trove for marketing and service operations too. “We thought we were just replacing tape recorders, “ she says ,” but it dawned on us that we could use this system to drive business decisions ”.Now if enough calls come in on one topic ,Continental can respond .For instance ,when the company learned that as many as 14 percent of customers were reconfirming flights ,it ran a notice in its in-flight magazine to assure fliers that such calls were unnecessary
To make the call monitoring more effective ,Continental added CallMiner ,a labor-saving Witness program that automatically transcribes conversations into text .”it gives me more time to analyze the data ,”Harris says ,”rather than just collect it”
Tying speech system to mainstream corporate IT system, and the use of
internet based voice system such as voice over IP (VoIP) ,are making it easier to mine database of voice records ,much as companies have mined other customer record for years .IVR analysis tools usually can keep track of the report on a caller’s choices based on which menu paths the caller has taken. But CallMiner and few other tools can go into the voice record and look for specific words or word combinations. Continental recorded a sample of its 5 million monthly calls and then used CallMiner to turn the dialogues into text and mine it for certain things .In doing so ,it discovered that about 10% of the calls contain the actual word reconfirm
Calls to reconfirm a flight are quite frankly, low value calls,” says Harris .she says she used the CallMiner analysis to justify the deployment of a new IVR system just for flight confirmation.
Continental currently has eight people listening to samples of calls in order to manually prepare a “call mix report”.which is used for analytical purposes by marketers and business planners at the airline.”The pilot test helped me realize ver quickly that I can do this with one person instead of eight,” she says
And do it better.from the manually prepared call mix report, Continental should see that it make a sale on only half of all calls , but it couldn’t tell why sales were lost.Telephone agents do try to elicit the reasons , and soon automated call mining will enable the airline to analyze callers responses, Harris says .it may also save passengers some money the next time they book a continental flight
Case Study Questions:
What are the business benefits of CallMiner system ? Provide some additional examples beyond those discussed in the case.
How can new technologies like CallMiner help companies improve their customer service and gain competitive edge in the marketplace? Explain.
Andre Harris refers to calls to reconfirm as flight as “ quite frankly low value calls “why are they classified as low value? Why do you think so many customers are placing such calls?