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 Engineering
POSTECH
2. Strategic Information System
Strategy Tree (1/2)
1) Introduction
■ Use of Information
Automation
Information
(IT, IS)
Innovation
■ Automation
Work Automation
Automation
Manufacturing Automation
■ Strategic Use of Information
Strategic Information System(SIS)
Strategic
Use of Information
(IT, IS)
Non-strategic Information System (NSIS)
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2. Strategic Information System
Strategy Tree (2/2)
1) Introduction
■ Strategic Management
Strategic Management (SM)
Strategic
Management
Non-strategic Management (NSM)
■ Information Strategy Tree
Work Automation
Automation
SIS
SM
Manufacturing
Automation
Information
Innovation
NSIS
3
NSM
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 ?
4
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
Problem
Usually business people or young couple mind to
check in and check out at the hotel front desk
Allowing customers
to check in and check out
without going to the front desk
Saving and managing
VIP customers’ information
“Customer Relationship Management (CRM)”
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Information Technology Strategy Case (2/10)
■ Asiana Airlines
Difficulties in tracking and managing baggage
• Risk of loss
• Higher likelihood of terrorist attacks
RFID-enabled air baggage tracking and control system
• RFID: Radio Frequency Identification
• Automatic identification method, relying on storing and remotely
retrieving data using devices called RFID tags or transponders
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Information Technology Strategy Case (3/10)
■ G-market
Problems
E-security
Reliability of
transaction
Solution
SSL complementary system
• Weak payment system
• Certificate user by ID/password
(SSL: Secure Sockets Layer)
• Deception of trade
• Weak warranty of the products quality
Escrow service
 Escrow service of G-market
4. Receipt Comfirmation
Customer
1. Purchase/Payment
5. Transferring Payment
G-market
3. Sending Product
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2. Delivery Request
Seller
Information Technology Strategy Case (4/10)
■ Shinhan Bank
Problem
Characteristics
of
Financial
Product
•
•
•
•
•
•
Intangibility
Geographical dispersion
Balancing growth with risk
Lack of Special Identity
Individual Marketing System
Inseparability
SRMS (2000)
Back-end Office System
Middle Office System
Customer
Information
Data Mining
System
Data Collecting
and Auditing
Mining
DB
Campaign
Information
Visualized Answer
tool
Internal
Data
Visualized
Campaign
Design tool
CRM
DB
External
Data
• Catching Symptom of Customer Secession
• Scheduling for Salespeople
• Customized Portfolio
Analysis
CRM Mart
OLAP
System
Visualized Campaign
Evaluating tool
Campaign
Management
System
Sampling
Transformation
Transmission
“Customer Relationship Management (CRM)”
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Front Office System
Branch
Call Center
Internet Banking
& Tele-Banking
CD / ATM
Tele- DMI
marketer
Customers
Information Technology Strategy Case (5/10)
■ Korail
Problems
KOVIS
•
•
•
•
•
•
•
•
• Symbol of “Red Tape”
• Criticism towards the bureaucracy of Korail
• Opening of KTX, less competitive
compared to vehicle transportation
• Increase in deficit, bad management index
PM (Plant Management)
SEM (Strategic Enterprise management)
AM (Asset Management)
CM (Cost Management)
FA (Financial Accounting)
MA (Management Accounting)
MM (Materials Management)
ESS (Employee Self Service)
“Enterprise Resource Planning (ERP)”
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Information Technology Strategy Case (6/10)
■ HANSSEM
Problems
• Economic depression in Korea
• Construction industry with problems
• Appearance of new multinational
competitors such as IKEA
• Decrease of the number of marriages
that could be potential customers
• Low price competition through
home shopping
Clicks and Bricks
•
•
•
•
To
To
To
To
separate on-line business and off-line business
running their own e-commerce site, “HANSSEM mall”
sell on-line only product, “SAM”
expand types of channels to meet customers
“E-commerce”
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Information Technology Strategy Case (7/10)
■ SK Energy
Problems
• Busan Logistics center: Set stop valve
frontal/rear due to crowded space
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
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
MOLAP of Hyundai Capital
Problems
• High risk in capital business
• Business cycle frequency is reducing
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
Multidimensional OLAP (MOLAP)
• Approach to enable end-users to
interactively analyze multidimensional
data from multiple perspectives for
their decision making
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
“OLAP”
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Information Technology Strategy Case (9/10)
■ jetBlue Airways
Problems
Solution
• American low-cost airline
• Wanted feedback by customer
- Too large customers to handle with
traditional and low-cost CRM solution
- Need to make new competitive
advantage against major airlines
• sCRM
- Social CRM(sCRM) is a philosophy and business
strategy designed to engage the customer in a
mutually beneficial relationship
- It’s supported by social technology, business rules,
workflow and processes
Example
Process
Set up Twitter
account in
spring of 2007
customer's complaint
Monitoring
duties became
more
intensive
In 2009 spring,
team was
organized
Make Twitter
more
conveniently
and directly
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jetBlue’s answer on
customer's complaint
+ real actions to solve it
Process
Information Technology Strategy Case (10/10)
■ Google
Greening the data center
Problems
• High power consumption for IT
devices and data centers
• Searching on the internet generates
carbon dioxide
 Cause the global warming
3
2.26 billion
2
Use Free-cooling
by evaporation
Use thermal modeling
with Computer Room
Air Conditioner (CRAC)
Sustainable Buildings
※Unit: metric tons
1.46 million
• Eliminating pollutants through Google’s
Healthy Materials Program
1
0
Electric Power
Carbon dioxide
• Pursuing design and operational strategies
that reduce energy and water use
“Green IT”
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Add new CRAC
controller
Note
■ MIT PPT material (SIS)
– http://ocw.mit.edu/courses/sloan-school-of-management/15-565j-integrating-esystems-globalinformation-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)
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