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Management Information Systema & Dss-unit-V
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Transcript of Management Information Systema & Dss-unit-V
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MANAGEMENT INFORMATION
SYSTEMA & DSS
UNIT-V
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Strategic Information Systems for
Competitive Advantage
Key features of the Strategic ISs are the following:
Decision support systems that enable to develop astrategic approach to align IS or IS with an organization'sbusiness strategies
Primarily Enterprise resource planning solutions that
integrate/ link the business processes to meet theenterprise objectives for the optimization of the enterpriseresources
Database systems with the "data mining" capabilities tomake the best use of available corporate information formarketing, production, promotion and innovation. The SISalso facilitate identification of the data collection strategies tohelp optimize database marketing opportunities.
The real-time ISs that intend to maintain a rapid-response
and the quality indicators.
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Elements of Strategic Management
1. Long Range Planning
2. Response Management
3. Proactive Innovation
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The Role of IS in Business Innovation
IS creates applications that provide strategic advantagesto companies
IS is a competitive weapon
IS supports strategic change, e.g, re-engineering
IS networks with business partners
IS provides cost reduction
IS provides competitive business intelligence
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Competitive Intelligence
The Internetis central tosupportingcompetitiveintelligence
Such activities drivebusiness
performance by:Increasing marketknowledge
Improving internal
relationships
Raising the quality ofstrategic planning
Many
companiesmonitor theactivities ofcompetitors
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Strategic Information systems at Rosenbluthdefending
against business pressures and competition,
(resource: Turban et al, 2006, p. 93)
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An SIS is characterized by its ability to significantlychange the manner in which business is conducted,
in order to give the firm strategic advantage. An SIScannot be classified by organizational structure,
functional area, or support system as described inthe previous chapter. Any information systemEIS,OIS, TPS, KMSthat changes the goals, processes,products, or environmental relationships to help an
organization gain a competitive advantage or reducea competitive disadvantage is a strategic informationsystem.
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It changes industry structure and alters the rules ofcompetition...
by increasing the power of buyers,
raising barriers to entry and
influencing the threat of substitution
It creates competitive advantage by giving
companies new ways to out-perform their rivals... lowering costs,
enhancing differentiation and
changing competitive scope
HOW IT/IS AFFECTS
THE NATURE OF COMPETITION
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It spawns whole new businesses, often from within acompany's own operations... by making
new businesses technologically feasible
creating derived demand for new products and
creating new businesses within old ones.
HOW IT/IS AFFECTS
THE NATURE OF COMPETITION
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PORTERS Value Chain Model
Value chain analysis describes the activities within andaround an organization, and relates them to an
analysis of the competitive strength of the organization.Therefore, it evaluates which value each particularactivity adds to the organizations products or services.
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PORTERS Value Chain Model
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Porters Value Chain Model
Porter distinguishes between primary activities and supportactivities. Primary activities are directly concerned with thecreation or delivery of a product or service. They can begrouped into five main areas: inbound logistics,
operations, outbound logistics, marketing and sales,and service. Each of these primary activities is linked tosupport activities which help to improve their effectivenessor efficiency.
There are four main areas of support activities:
procurement, technology development (including R&D),human resource management, and infrastructure
(systems for planning, finance, quality, information
management etc.).
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PORTERS Value Chain Model
The term Margin implies that organizations realize a
profit margin that depends on their ability to manage
the linkages between all activities in the value chain.In other words, the organization is able to deliver aproduct / service for which the customer is willing topay more than the sum of the costs of all activities in
the value chain.
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Porters Value Chain Model
In most industries, it is rather unusual that a singlecompany performs all activities from product design,production of components, and final assembly to
delivery to the final user by itself.
Most often, organizations are elements of a valuesystem or supply chain. Hence, value chain analysis
should cover the whole value system in which theorganization operates.
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PORTERS Value Chain Model
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PORTERS Value Chain Model
A typical value chain analysis can be performed in thefollowing steps:
Analysis of own value chain which costs are relatedto every single activity
Analysis of customers value chains how does ourproduct fit into their value chain
Identification of potential cost advantages in
comparison with competitors
Identification of potential value added for thecustomer how can our product add value to thecustomers value chain (e.g. lower costs or higherperformance) where does the customer see suchpotential
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How Enterprise Systems Work
Enterprise systems feature a set of integrated software modules and a central databasethat enables data to be shared by many different business processes and functionalareas throughout the enterprise.
ACHIEVING Operational Excellence and CustomerIntimacy: Enterprise Applications
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Management Information Systems
Supply chain Management is a set of approachesutilized to efficiently integrate suppliers,manufacturers, warehouses, and so that merchandise
is produced and distributed at the right quantities, tothe right locations, and at the right rimes, in order tominimize system wide costs while satisfying servicelevel requirements.
SUPPLY CHAIN MANAGEMENT SYSTEMS
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Management Information Systems
Supply chain: Network of organizations and processes for:
Procuring raw materials
Transforming them into products
Distributing the products
Upstream supply chain: Firms suppliers, suppliers suppliers, processes for managing
relationships with them
Downstream supply chain: Organizations and processes responsible for delivering
products to customers
SUPPLY CHAIN MANAGEMENT SYSTEMS
Prentice Hall 201119
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Nikes Supply Chain
This figure illustrates the major entities in Nikes supply chain and the flow of information upstream and
downstream to coordinate the activities involved in buying, making, and moving a product. Shown here isa simplified supply chain, with the upstream portion focusing only on the suppliers for sneakers andsneaker soles.
SUPPLY CHAIN MANAGEMENT SYSTEMS
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Management Information SystemsSUPPLY CHAIN MANAGEMENT SYSTEMS
THE BULLWHIP EFFECT
Inaccurate information can cause minor fluctuations in demand for a product to be amplified asone moves further back in the supply chain. Minor fluctuations in retail sales for a product cancreate excess inventory for distributors, manufacturers, and suppliers.
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Push- Versus Pull-Based Supply Chain Models
The difference between push- and pull-based models is summarized by the sloganMake what we sell, not sell what we make.
SUPPLY CHAIN MANAGEMENT SYSTEMS
Traditional supply chain strategies are often categorized as push or pullstrategies. Probably. this stems from the manufacturing revolution or ihe I 9&)s.in which manufacuring systems were divided into these categories.
Push. Based supply chain : In a push-based supply chain, production anddistribution decisions are based on long term forecasts. Typically. themanufacturer bases demand forecasts on orders received from the retailer's
warehouses. It therefore takes much longer for a push-bused supply chain toreact to the changing marketplace. which can lead to. The inability to meet changing demand patterns.. The obsolescence or supply chain inventory as demand ror certain productsdisappears.In addition, we saw in Chapter 4 that the variability of orders recciscd from the
retailers and the warehouses is much larger than the variabiliy in customerdemand. due to the bullwhip effect. This increase in variability leads to. Excessive inventories due to the need for large safely stocks (see chapter 3).. Larger and more ariabte production batches.. Unacceptable service levcls. Prxduct obsolcscence.
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Push- Versus Pull-Based Supply Chain Models
The difference between push- and pull-based models is summarized by the sloganMake what we sell, not sell what we make.
SUPPLY CHAIN MANAGEMENT SYSTEMS
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Management Information Systems
Business value of SCM systems Match supply to demand
Reduce inventory levels
Improve delivery service Speed product time to market
Use assets more effectively
Reduced supply chain costs lead to increased
profitability
Increased sales
SUPPLY CHAIN MANAGEMENT SYSTEMS
Prentice Hall 201124
f
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Management Information SystemsSUPPLY CHAIN MANAGEMENT SYSTEMS
THE FUTUREINTERNET-DRIVEN
SUPPLY CHAIN
The futureInternet-drivensupply chainoperates like a
digital logisticsnervous system. Itprovidesmultidirectionalcommunicationamong firms,
networks of firms,and e-marketplaces sothat entirenetworks of supplychain partners can
immediately adjustinventories orders Prentice Hall 201125
M I f i S
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Management Information Systems
CRM integratespeople, process. and technology to
maximize relationships with all customers. CRM is acomprehensive approach that provides seamless
coordination between all customer-facing functions.CRM increasinglyleverages the Internet.
CUSTOMER RELATIONSHIP MANAGEMENT SYSTEM
M t I f ti S t
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Management Information Systems
Knowing the customer In large businesses, too many customers and too many
ways customers interact with firm
Customer relationship management (CRM) systems
Capture and integrate customer data from all over theorganization
Consolidate and analyze customer data
Distribute customer information to various systemsand customer touch points across enterprise
Provide single enterprise view of customers
Customer Relationship Management Systems
Prentice Hall 201127
M t I f ti S t
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Management Information SystemsCustomer Relationship Management Systems
CUSTOMERRELATIONSHIPMANAGEMENT (CRM)
CRM systemsexamine customersfrom a multifaceted
perspective. Thesesystems use a set ofintegrated applicationsto address all aspectsof the customerrelationship, including
customer service,sales, and marketing.
Prentice Hall 201128
M t I f ti S t
C S O O S G S S S
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Management Information Systems
CRM packages typically include tools for: Sales force automation (SFA)
E.g. sales prospect and contact information, and salesquote generation capabilities
Customer service E.g. assigning and managing customer service requests;
Web-based self-service capabilities
Marketing
E.g. capturing prospect and customer data, schedulingand tracking direct-marketing mailings or e-mail
CUSTOMER RELATIONSHIP MANAGEMENT SYSTEMS
Prentice Hall 201129
Management Information S stems
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Management Information SystemsCUSTOMER RELATIONSHIP MANAGEMENT SYSTEMS
CRM SOFTWARE
CAPABILITIES
The major CRMsoftwareproducts supportbusiness
processes insales, service,and marketing,integratingcustomerinformation from
many differentsources.Included aresupport for boththe operationaland analytical
aspects of CRM. Prentice Hall 201130
Management Information Systems
CUSTOMER RELATIONSHIP MANAGEMENT SYSTEMS
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Management Information SystemsCUSTOMER RELATIONSHIP MANAGEMENT SYSTEMS
CUSTOMER LOYALTY MANAGEMENT PROCESS MAP
This process map shows how a best practice for promoting customer loyalty through customerservice would be modeled by customer relationship management software. The CRM softwarehelps firms identify high-value customers for preferential treatment.
Prentice Hall 201131
Management Information Systems
CUSTOMER RELATIONSHIP MANAGEMENT SYSTEMS
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Management Information Systems
Operational CRM: Customer-facing applications
E.g. sales force automation, call center and customer
service support, and marketing automation
Analytical CRM:
Analyze customer data output from operational CRMapplications
Based on data warehouses populated by operationalCRM systems and customer touch points
CUSTOMER RELATIONSHIP MANAGEMENT SYSTEMS
Prentice Hall 201132
Management Information Systems
CUSTOMER RELATIONSHIP MANAGEMENT SYSTEMS
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Management Information SystemsCUSTOMER RELATIONSHIP MANAGEMENT SYSTEMS
ANALYTICAL CRM DATA WAREHOUSE
Analytical CRM uses a customer data warehouse and tools to analyze customer data collectedfrom the firms customer touch points and from other sources.
Prentice Hall 201133
Management Information Systems
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Management Information Systems
Business value of CRM Increased customer satisfaction
Reduced direct-marketing costs
More effective marketing
Lower costs for customer acquisition/retention
Increased sales revenue
Reduce churn rate
Number of customers who stop using or purchasingproducts or services from a company.
Indicator of growth or decline of firms customer base
CUSTOMER RELATIONSHIP MANAGEMENT SYSTEMS