Federal Express, founded in 1971, handles an average of 3million package-tracking request Every day. To stay ahead in a highly competitive industry, the company focuses on customerService by maintaining a comprehensive web site, www.FedEx.com, to assist customers and Reduce costs.

For example, every request for information that is handled at the web site instead of by the callCenter saves an estimated $1.87.

Federal Express has reported that customer calls have decreased by 83000 per day since 2000,Which saves the company $ 57.56 million per year. And since each package-tracking requestCosts Federal Express 3 cents, costs have been reduced fromMore than $1.36 billion per year to $21.6 million per year byCustomers using the Web site instead of the call center.

Another technology that improves customer service is ShipManager, an application installed on customer’s sites so thatUsers can weigh packages, determine shipping charges, and print shipping labels. Customers can also link their invoicing, billing, accounting, and inventory systems to ship manager.

However , Federal Express still spends almost $326 million per year on its call center to reduce Customers frustration when the Web site is down or when customers have difficulty using it. Federal Express uses customer relationship management software called Clarify in its call centers to make customer service representatives jobs easier and more efficient and to speed upResponse time.

1.Is technology by itself enough to ensure high-quality customer service?

2.What are Federal Express’s estimated annual savings from using information technology?

3.What are a couple of examples of information technologies used by Federal Express?

Management Information System.

InformationSystems

Data

Hardware

People

Telecommunications

Software

Term Management :

Term Information :

Term System : It is a set of interrelated components, with a clearly defined boundary,Working together to achieve a common set of objectives.

Components of System

Management Information System Definition

A system to convert data from internal and external sources into informationAnd to communicate that information in an appropriate form to managers at All Levels in all functions to enable them to make timely and effective decisionsFor planning , directing and controlling the activities for which they are Responsible.

MIS is- A system It combines human and computer based resources It is meant to provide information to managers This information enables managers to make timely and effective decisions.

Management Information Systems Resources and Products

1. People Resources Specialists: Systems analysts, Software developers, System Operators.End Users: any one else who uses information system.

2. Hardware Resources:

Machine: Computers, video monitors, printers, optical scanner.Media: Floppy disks, magnetic tape,

3. Software Resources:

Programs: operating system programs, spreadsheet programs, word processing Programs, payroll programs.

Procedures: data entry procedures, error correction programs.

4. Data Resources: Product descriptions, customer records, employee files, inventory database.

5. Network Resources: Communication media, communications processors, network access and control software.

6. Information Products: Management reports and business documents using text and graphics displays, audio responses, and paper forms.

Basic Characteristics of MIS

1. Management-oriented: MIS should start its journey from appraisal of management needs, mission and goal of the business organization. It may be individual or collective goals of an organization.

The MIS is such that it serves all the levels of management in an organization i.e. top, middle and lower.

2. Management directed: When MIS is management-oriented, it should be directed by the management because it is the management who tells their needs and requirements more effectively than anybody else.

3. Integrated:. Development of information must be integrated so that all the operational and functional information sub systems should be worked together as a single entity.

4. User friendly/Flexibility

5. Common database ----Master Table -----------Transaction Table

6. Computerized

The Importance of Information System

1. HRIS (Human Resource Inf. Sys.)

Choosing the best job candidate Scheduling and assigning employees Predicting the organization’s future personnel needs.

2. LIS (Logistics Information System)

Improving routing and delivery schedule Selecting the best mode of transportation Improving transportation budgeting Improving the shipment planning.

3. MFIS(Manufacturing Inf. Sys.)

Maintaining the manufacturing cost.

Product Cost CalculationSpace UtilizationAnalysis of Price changes and discounts

4. FIS (Financial Inf. System)

Improving budget allocation Minimizing capital investment risksMonitoring cost trendsManaging cash flow

5. MKIS(Marketing Information System)

Analyzing market share, sales and sales personnelSales forecastingPrice and cost analysis of items sold.

Wal-Mart Stores, Inc.

Wal-mart, the largest retailer in the world, built the Wal-Mart Satellite Network, Which is the largest private satellite communication system in the United States.

It links branch stores with the home office in Bentonville, Arkansas, by using two-wayVoice communication. Wal-mart uses the following information technologies to gain a Competitive advantage:

Telecommunication is used to link stores with the central computer system and then to supplier’s computers. This system creates a seamless connection among all parties.

Network technologies are used to manage inventory and implement a just-in-time inventory system. As a result, products and services are provided at the lowest possible prices.

Wal-Mart uses an extranet, called Retail Link, to communicate with suppliers. Suppliers can use this extranet to review product sales records in all stores and track Current sales figures and inventory levels. Wal-Mart is a major user of RFID technologies which have improved its Supply Chain and Inventory Management System.

The Business Information Value chain

Firm Profitability and Strategic position

Data Transfor DissemiCollection mat ion nation and Data into storage Business Systems

Planning coordination controlling Modeling and decision making

Supply Enterprise customer knowledge Chain manage mange managementManage ment mentment

Information processing activities

Management Activities

Business Processes

Topic No—2 Types of Information System

Topic No—2 Types of Information System

Groups Served

Functional Areas

Sales andmarketing

Manufacturing & production

Finance&accounting

Human Resources

Strategic Level ExecutiveSupport Systems (ESS)

Managementlevel

Middle Managers

Operationallevel

Management Information Systems (MIS)Decision support Systems (DSS)

Transaction ProcessingSystems(TPS)

Sales mngt.Sales region analysis

Inventory controlProduction schedule

Annual BudgetingProfitability analysis

On 12th September 2002, Blue Dart and DHL signed a Sales Alliance Agreement which came into effect from 1st October 2002 on a principal to principal basis. This alliance was further strengthened in 2005 when DHL Express (Singapore) Pvt. LTD. acquired 81.03% stake in Blue Dart and currently holds 75% stake since 23rd November, 2012 

While Blue Dart is the leader of the air express industry in India, DHL Express is the No.1 international air express services provider in India offering its customers the entire spectrum of express services from international air express to high-end logistics solutions including repair and return, strategic inventory management and direct express inventory distribution.

The coming together of the world's No. 1 international air express service provider and India's No. 1 domestic express services provider is a logical step in a win-win relationship to benefit all the parties involved, the customer and the stakeholders of both organizations. 

Chapter 3

Information Systems To Achieve Competitive Advantage

Firms that “do better” than the others are said to have a competitive advantage over other:

They either have access to special resources that others do not, or

They are able to use commonly available resources more efficiently-

Usually because of superior knowledge or information asset.

Why do some firms do better than others and how do they achieve Competitive advantage?

How can you analyze a business and identify its strategic advantages?

How can you develop a strategic advantage for your own business?

How do information systems contribute to strategic advantages?

Michael Porter’s competitive model.

The most widely used model for understanding competitive advantage Is Michael Porter’s competitive forces model

General view of the firmGeneral view of its competitorsGeneral view of the firm’s environment . which includes New market entrantsSubstitute productSuppliers customers

Porter’s Competitive forces Model

In this model, five competitive forces shape the fate of the firm.

PotentialEntrants

Substitutes

Suppliers Buyers

Threat of new entrants

Bargaining powerOf Buyers

Bargaining powerOf supplier

Threat of Substitutes products Or services

Industry Competitors

Rivalry among existing Competitors

1. Low-Cost Leadership: Use Information Systems to produce products and services at a lower price than competitors while enhancing quality and level of service. example: Big Bazar.

2. Product Differentiation: Use Information systems to differentiate products, and enable new example: Rediff.com, Google, eBay,

3. Focus on market niche: Use information systems to enable a focused strategy on a single market niche; specialize.

4. Customer and Supplier intimacy: Use information systems to develop strong ties and loyalty with customers and suppliers. example: Amazon.com

Example

Ch-4, Database Systems, Data Warehouses, And Data Mart

1. Databases : Database is a collection of related data that can be stored in a central location or in multiple locations.

2. Data Hierarchy : is the structure and organization of data, which involves fields, records, and files.

629-12-1127 Mary SmithS.E.

Barber

510-16-9211

Alan BidgoliN.E.

Morrison

524-13-1926 John BrownS.W.Broadway

File

Records

Interaction between the User, DBMS, and database

User DBMS Database

User makes a

Request forinformation

DBMS returns

Information to

The user

DBMS retrieves

the informatio

n

DBMS searches

thedatabase

Database Systems, Data Warehouses, and Data Marts

Types Of Data in a Database

To Generate Business Intelligence the database component of an information systems needs access to two types of data:

1.Internal Data: Collected from the organization. ex: Transaction records Sales Record Personnel Records

2. An Organization might use internal data on customer’s past purchase to generate BI about future buying patterns .

3. External Data: Collected from outside the organization. ex: Competitors, customers and suppliers Distribution network Economic indicators (consumer price index) Government regulations Labor and population statistics Tax records

Data Warehouses

Data warehouse is a collection of data from a variety of sourcesUsed to support decision-making, application and generate businessIntelligence.

Data warehouses store multi dimensional data, so they’re sometimes called “Hypercube ”.

Data Warehouse Configuration

Raw dataSummary data Metadata

Extraction Transformation and loading

External data sources

OLAP analysis

Data-mining analysis

Decision-makingreports

Databases

Transactionfiles

EnterpriseResource Planning systems

Customer RelationshipManagement

Data can come from variety of sources

1.ERP system collect, integrate, and process data that can be used by all functional areas in an organization.

2. CRM systems collect and process customer data to provide information for improving customer service.

3. Extraction, Transformation, and loading (ETL) refers to the process used in a data warehouse. Extraction means collecting data from a variety of sources and converting it into a format that can be used in a transformation processing.

Extraction process can also parse (divide into pieces) data to make sure it meets the data warehouse’s structural needs.

ex: parsing can be used to separate the street number, street name, city etc.

Transformation processing is done to make sure data meets the data warehouse’s need. It is basically sorting and filtering of the data. It is also aggregating and and summarizing data before loading it in the data warehouse.

5.Loading is the process of transferring, data to the data warehouse depending o on the organization’s need and the data warehouse’s storage capacity .

Collected information is organized in a data warehouse as

Raw data : Is the information in its original form.

Summary data : Gives users subtotals of various categories, which can be useful.

Metadata : Is information about data – its content, quality, condition, origin, and other Characteristics. Metadata tells users how, when, and by whom data was collected and how data has been formatted and converted into its present form.

ex: Metadata in a financial database could be used to generate a report for shareholders explaining how revenue , expenses and profits from sales transactions are calculated and stored in the data warehouse.

1. Online Transaction Processing: Systems are used to facilitate and manage

transaction –oriented applications, such as point of sale data entry retrieval transaction processing

2. Online Analytical Processing: It generate business intelligence. It uses multiple

sources of information and provides multidimensional analysis, such as viewing data based on time, product and location.

3. Data-mining Analysis: is the process of analyzing data from different perspective and summarizing it into useful information that can be used for increasing revenue.

4. Decision –Making Reports: A data warehouse can generate all types of information as well as reports used for decision making.

Data Marts : is usually a smaller version of data warehouse , used by a Single department or functions.

Protecting Information Resources

•A comprehensive security system can protect an organization’s information resources, which are its most important asset after human resources.

Types of Threats

Malicious Software: Malicious software programs referred to as malware Include a variety threats such as:

1. Computer viruses2. Worms3. Trojan horses

>> Computer viruses: Computer virus is a rogue software program that attaches itself to other software programs or data files in order to be executed, usually without user knowledge or permission.

* It destroys data. * clogging computer memory. * Reformatting a computer’s hard drive. * Causes program to run improperly.

>> Worms: Many recent attacks have come from worms. Which are independent computer programs that copy themselves from one computer to others over network. They are independent in nature.

worms can destroy * data and programs * It also disrupt or even halt the operation of computer network.

Worms and viruses are often spread over the internet from files of Downloaded software Files attached to e-mail transmissions, or from compromised e-mail messages.

>> Trojan horse: A Trojan horse is a software program that appears to be gentle, but then does something other than expected. The Trojan horse is not itself a virus because it does not replicate, but is often a way for viruses or other malicious code to be introduced into a computer system.

Hackers and Cyber vandalism: A hacker is an individual who intends to gainUnauthorized access to computer system.

Hacker activities have broadened beyond mere system intrusion to includeTheft of goods and information as well as system damage and cyber vandalism.

Spoofing and Sniffing : Hackers attempting to hide their true identity often spoof, orMisrepresent themselves by using fake e-mail address or camouflaged as someone Else.Spoofing also can involve redirecting a web link to an address different from the intendedOne,

A sniffer is a type of eavesdropping program that monitors information Traveling over a network. When used legitimately, sniffer can help identify Potential network trouble-spots or criminal activity on networks but when Used for criminal purpose they can be damaging and very difficult to detect.

Types of Information systems Control

1. General Controls: General controls include software control, physical hardware controls, computer operations controls, data security control etc.

2. Application controls: Application controls include both automated and manual procedures that ensures that only authorized data are completely and accurately processed by that application.

> Input control: checks data for accuracy and completeness when they enter the system.

> Processing control: establishes that data are complete and accurate during updating.

> Output controls: ensures that the results of computer processing are accurate, complete, and properly distributed.

Technologies and Tools for Security and Control.

It includes :

1. Tools for authentication

2. Firewall

3. Intrusion Detection system

4. Antivirus software

5. Encryption

1. Access Control: Access control consists of all the policies and procedures a company uses to prevent improper access to systems by unauthorized insiders and outsiders. To gain access a user must be authorized and authenticated.

2. Firewall: The use of firewalls to prevent unauthorized users from accessing private networks. A firewall is a combination of hardware and software that controls the flow of incoming and outgoing network traffic.

3. Intrusion Detection Systems: In addition to firewalls, commercial security vendors now provide intrusion detection tools and services to protect against suspicious network traffic and attempts to access files and databases.

4. Antivirus software: Antivirus software is designed to check computer systems and drives for the presence of computer viruses.

5. Encryption: Many organizations rely on encryption to protect sensitive information transmitted over the internet and other networks. Encryption is the coding and scrambling of messages to prevent unauthorized access to or understanding of the data being transmitted.

It can be encrypted with the help of numerical codes.Eg; Credit card information.