Information system

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?