what’s happening?! informationweek’s chief of the year roy dunbar, eli lilly cio was trained as...
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What’s Happening?!What’s Happening?!InformationWeek’s Chief of the Year
Roy Dunbar, Eli Lilly CIO
Was trained as a pharmacist, studies comparative religion and meditates daily.
Succeeded in making IT an integral part of the company’s business strategy. He had business management experience but no technology background.
Spearheaded IT projects that speed drug research and production.
Helped form a venture-fund subsidiary that incubates IT-driven business models.
Was promoted to president of intercontinental operations.
What’s Happening!?What’s Happening!?First exam is currently scheduled for Feb. 3 (T) and Section I and II of the ATP are due on Feb. 5 (TH).
A possible change would be to move the midterm exam to the following Tuesday, Feb. 10 with the understanding that it will mean that it will probably delay the return of the exams until Tuesday of the following week.
New ScheduleNew Schedule
Feb. 3 (T) Strategic Option Generator and Roles, Roles and Relationships Concept (not on the exam)
Feb. 5 (TH) Redefine and/or Define Concept (not on the exam)
Section I and II due that day. Midterm Exam clinic at 6 PM. Feb. 10 (T) Midterm Exam covering Chapter 1
through 7 and course assignments.
ISM ToastmastersISM Toastmasters
I have a schedule conflict today so we will not I have a schedule conflict today so we will not
meet. meet.
We will either add another Thursday or We will either add another Thursday or
pick a Tuesday to make up the loss session.pick a Tuesday to make up the loss session.
Oracle Industry DefinitionOracle Industry DefinitionDatabase System and Enterprise Application Software Industry.
Business Strategy Model:
Product Strategy: Software categories, operating systems and processor categories.
Customer Strategy: Categories of targeted customers.
Market Strategy: Geographic
Development Strategy: (in lieu of manufacturing)
Sales/Distribution: Field sales force, Internet direct, Value-add resellers, retailers.
Company Structure:
Information Systems:
Computer SoftwareComputer Software
General-Purpose
ApplicationPrograms
General-Purpose
ApplicationPrograms
Application-Specific
Programs
Application-Specific
Programs
SystemManagement
Programs
SystemManagement
Programs
System Development
Programs
System Development
Programs
ApplicationSoftware
System SoftwareSystem
Software
ComputerSoftware
ComputerSoftware
MS Office Groupware Integrated Desktop
Packages
• Business, Accounting & Finance Engineering ERP, SCM, CRM, etc.
• Operating Systems Network Management Database Management Systems Utilities Performance & Security
• Programming Languages Programming Editors CASE Packages
Intel Industry DefinitionIntel Industry Definition
Semiconductors is too broad.
Microprocessors is too narrow.
PC Component IndustryMicroprocessorsMotherboardsNetwork devicesMemoryStorage
Worldwide PC Sales - 4th Quarter 2003
0.00% 2.00% 4.00% 6.00% 8.00% 10.00%
12.00%
14.00%
16.00%
18.00%
Toshiba
Fujitsu-Siemens
IBM
Dell
HP
Chapter 4 SummaryChapter 4 Summary
Airline Industry AnalysisAirline Industry Analysis
Airline Industry EvaluationAirline Industry Evaluation
Understand the goals of the industry.Understand the goals of the industry. Examine the causes of financial difficulty.Examine the causes of financial difficulty. Evaluate the environment using the Porter Evaluate the environment using the Porter
competitive model.competitive model. Assess the importance of IT. Assess the importance of IT. Learn from successful company examples. Learn from successful company examples.
Poor Financial Performance Poor Financial Performance Reasons Reasons
Wars and terrorist attacksWars and terrorist attacksOperating cost increasesOperating cost increases
» Aircraft fuelAircraft fuel» Employee wagesEmployee wages
Capital-intensiveCapital-intensiveOther airlines in bankruptcy proceedings Other airlines in bankruptcy proceedings resort to a cheap ticket strategy.resort to a cheap ticket strategy.
The Airline IndustryThe Airline Industry
3 Goals of the Airline Industry3 Goals of the Airline Industry
* * Provide Public Service to CustomersProvide Public Service to Customers
* Produce a Return to Stockholders* Produce a Return to Stockholders
* Function as Strategic Resource for the Country* Function as Strategic Resource for the Country Presidential Commission ConclusionsPresidential Commission Conclusions
Things that needed to be addressed for the US Things that needed to be addressed for the US
carriers to succeed domestically and in the carriers to succeed domestically and in the global global
marketplace marketplace
Porter Competitive ModelPorter Competitive Model
Intra-Industry RivalrySBU: American AirlinesRivals: United, Delta, US Air,Northwest, Southwest
BargainingPower of Buyers
Bargaining Power
of Suppliers
Substitute Products
and Services
PotentialNew Entrants
Airline Industry Analysis - North American Market
•Travel Agents •Business Travelers•Federal Government•Pleasure Travelers•Charter Service•U.S. Military•Cargo and Mail
•Alternate Travel Services•Fast Trains•Boats
•Private Transportation•Videoconferencing•Groupware
•Aircraft Manufacturers•Aircraft Leasing Companies•Labor Unions•Food Service Companies•Fuel Companies•Airports•Local Transportation Service •FAA•IT Vendors
•Foreign Carriers•Regional Carrier Start ups•Cargo Carrier Business Strategy Change
Figure 4-2
Major Lessons of Successful Airlines Southwest Airlines: Focus, focus and focus of business strategies Point-to-point route structure Least cost operations Good relationship with unions Strong company culture Impressive business leadership
Singapore Airlines: Strategic location in Asia Airline strategy is integral to the nation’s strategies Good IT infrastructure Strong Management Team
Importance of Information Importance of Information Technology to AATechnology to AA
1. Convenience to Customers.• Passenger Reservation System
2. Knowledge of Customers. • Frequent Flyer Program
3. Providing a foundation for other systems.• Passenger Reservation System
4. Building a base for other businesses.• Sell use of systems or the actual systems
Possible Exam Questions!Possible Exam Questions!
1. How can the Porter Competitive Model be effectively used in writing our Analysis Term Papers?
2. Identify and explain which business strategies are most important to airlines..
Chapter 5 IntroductionChapter 5 Introduction
Using IS to Redefine Competitive Using IS to Redefine Competitive Boundaries and Creating the Boundaries and Creating the
Extended EnterpriseExtended Enterprise
Networks – Crossing company Networks – Crossing company Boundaries to Improve ResultsBoundaries to Improve Results
Increase efficiency. Increase efficiency. Ex: JIT inventoryEx: JIT inventory Increase effectiveness. Increase effectiveness. Ex: Wal-MartEx: Wal-Mart Improve customer service. Improve customer service. Ex: UPSEx: UPS Enable creation of strategic alliances. Enable creation of strategic alliances.
Ex: Airline alliances like Star and SkyteamEx: Airline alliances like Star and Skyteam
Alliances – Providing Growth Alliances – Providing Growth OpportunitiesOpportunities
Allow a company to compete more effectively by:Allow a company to compete more effectively by: Providing access to new products or markets.Providing access to new products or markets. Improving the position of the enterprise in the Improving the position of the enterprise in the
current market.current market. Reducing time-to-market on new products.Reducing time-to-market on new products. Dramatically changing cost structures.Dramatically changing cost structures.
Electronic Data InterchangeElectronic Data Interchange
1.1. A formalized computer network used to A formalized computer network used to share critical business information.share critical business information.
2.2. Speeds orders and payments between Speeds orders and payments between alliance partners.alliance partners.
3.3. Reduces overhead that would be allocated Reduces overhead that would be allocated to to
manually processing orders.manually processing orders.
Email Enabled ApplicationsEmail Enabled Applications
Not software applications, but business Not software applications, but business applications/processes.applications/processes.
Comparable to a less formalized EDI that may be Comparable to a less formalized EDI that may be used within an enterprise or across several used within an enterprise or across several different enterprises seamlessly.different enterprises seamlessly.
More flexible than EDI in areas where information More flexible than EDI in areas where information may not be easily normalized. may not be easily normalized.
Ex: Sun Microsystems travel reimbursementsEx: Sun Microsystems travel reimbursements
The InternetThe Internet
Changes traditional business networks by connecting Changes traditional business networks by connecting
everyone, everywhere, all the time.everyone, everywhere, all the time.
Allows all other networking systems to be Allows all other networking systems to be implemented implemented
quickly and relatively inexpensively.quickly and relatively inexpensively.
ConclusionsConclusions
IS extends a company’s capabilities: IS extends a company’s capabilities:
Builds inter-organizational systems.Builds inter-organizational systems. Deals with business process changes involving Deals with business process changes involving
customers, suppliers and business partners.customers, suppliers and business partners. Establishes multiple forms of strategic business Establishes multiple forms of strategic business
alliances.alliances.
Chapter 5 Chapter 5
Information Systems Can Redefine Competitive
Boundaries
Chapter TopicsChapter Topics
A. Interorganizational Systems
B. Strategic Business Alliances
C. Electronic Data Interchange (EDI)
(extranets versus EDI?)
With an added dose of globalization.
Chapter QuestionsChapter Questions1. Which word—global, international or interdependent—best
describes current markets, products and services, and business relationships?
2. Why is growth such an important part of business success?
3. What is an extended enterprise and why is it an important competitive consideration? (What terms are currently more commonly used to described an extended enterprise?)
4. What role does information technology play relative to an extended enterprise?
5. Have the physical limits of strategic alliances disappeared because of current network capabilities?
6. Do strategic alliances really work and if so, why?
Topic ATopic A
Interorganizational Systems are defined as
automated information systems shared by two
or more companies. Enhance business relationships. Establish strategic alliances. Gain efficiencies. Gain effectiveness. Lower cost of doing business.
Interorganizational System Interorganizational System GoalsGoals
Efficiency
Effectiveness
Competitive Advantage
Competitive AdvantageCompetitive Advantage
Advantage can be gained through better customer service that accrues from inter-organizational systems.
Customer Satisfaction:– We are available.– We are interested in you.– We are responsive.– You can count on us.– We want to earn your trust and respect.
Topic B - Strategic AlliancesTopic B - Strategic Alliances
How (why) do they work? Companies bring strengths to the alliance
table. Alliances create long term advantages. Alliances drive business growth. Alliances often represent a difficult
transition.
Strategic AlliancesStrategic Alliances
Why establish a strategic alliance? To build a combined capability that makes
it a stronger competitor. Extended enterprise against the
competitor’s extended enterprise. Difficult, costly and risky to try to deal with
the challenges of a global business.
Topic C - EDI Topic C - EDI Electronic Data Interchange (EDI) (Predecessor to extranets)
Exchange of routine business transactions in a structured computer-processed format. Traditional applications included purchasing, pricing, scheduling, payments and financial reporting.
Why stay with an EDI system?Why stay with an EDI system?
1. It is established and proven.
2. The network costs are not large enough to justify switching to an extranet approach.
3. There are other priorities within the organization.
EDI ExamplesEDI Examples
Boeing Parts Logistic System: Provides information
regarding parts availability to support aircraft maintenance.
Links with contractors in Japan and U.S.
Charles Schwab Trading systems that connect to stock exchange
systems.
EDI Value-Added Network ServicesEDI Value-Added Network Services
Two major elements: Telecommunications network. EDI application translation support.
Connects Trading partners: Broad range of geographic locations. Provides network management-multiple routing
paths and security.
(Would probably be called an ISP or ASP today)
The Benefits of a VAN (ISP or The Benefits of a VAN (ISP or ASP) ASP)
Having 24-hour service on demand. Gaining access to national and international
networks to connect to trading partners. Support for multiple telecommunications protocol
conversions. Interchange support for even a smaller number of
transactions, since you only pay for the services that you actually use.
Boundaries?Boundaries?
Across town?
Throughout the state?
Across multiple US regions?
Encompassing the entire US?
North America?
Western Hemisphere?
Multiple Continents?
Total World?
Customers?
Suppliers?
Support Service Providers?
Business Partners?
Industry Forces, Associations, Government?
Mobile employees relative to the above?
Interorganizational SystemsInterorganizational Systems Is this just another name for outsourcing?Is this just another name for outsourcing? Is there any difference between sending work Is there any difference between sending work
from Santa Cruz to San Jose and sending it from from Santa Cruz to San Jose and sending it from Santa Cruz to Bombay?Santa Cruz to Bombay?
According to Gartner, 10 per cent of info tech jobs with US based technology companies will be based in countries in emerging markets by the end of 2004.
The trend is not new and may be overstated.
It is unlikely that the federal government will do anything to limit or ban outsourcing.
The Best Term?The Best Term?
• Global
• International
• Interdependent
Globalization DriversGlobalization Drivers
• Customers are global.
• Channels are global.
• The marketplace is global.
• Products that travel.
The InternetThe Internet
Provides the ability to slash transaction and partnering costs between companies.
It supports the ability to mesh information, data and processes with other entities to created a new infrastructure for creating successful customer relations.
This is a rising tide that doesn’t lift all boats. Only the right business model backed by the right
business strategies will lift a specific boat.
Toyota DiversificationToyota Diversification
At a time when diversification is often suspect, Toyota, guided by a historical perspective, is moving into other areas such as prefab housing and especially telecommunications.
Toyota PerspectiveToyota Perspective
The company’s plan is driven by historical cycles dating to the 1700s that suggest that a single line of business rarely prospers for more than sixty years.
“We are not arrogant enough to believe that the automobile business can be profitable perpetually.”
The waves of change are reflected in the dominant infrastructure of the time.
In 2000 they achieved 10% of sales ($10 billion) to come from outside the auto and truck business.
Prevailing InfrastructurePrevailing Infrastructure
1800 Canals
1850 Railroads
1900 Highways
1950 Telecommunications
Interstate Highway SystemInterstate Highway System
Created the modern economy and reshaped the Created the modern economy and reshaped the companies on the Fortune 500.companies on the Fortune 500.
A major public works project involving 42,793 A major public works project involving 42,793 miles of pavement.miles of pavement.
Bill signed by President Eisenhower on June 29, Bill signed by President Eisenhower on June 29, 1956.1956.
Impact of Interstate Highway System Impact of Interstate Highway System
Lead to an America that was more mobile, less plagued by regional differences, and vastly wealthier than before.
Sold as a savior for rural America and declining urban core.
Instead it accelerated the trend toward suburanization. Accelerated the transformation to chain restaurants, hotels,
stores, chain everything. The combination of the new highway system and shipping
containers enabled overseas manufacturers and small domestic companies to get products to market faster than ever before.
Highway System PerspectiveHighway System Perspective Federal funding of highways in the US began in 1916 but
became significant in 1956. Highways became a state versus federal issue. Wealthy states built their own. Poorer states were unable
to do so. Southern states gained significant economic benefits from
the federally funded highway system. By eliminating its transportation disadvantages southern
states attracted manufacturers, retailers and shipping companies.
Boom cities of the second half of 20th century did their growing along the lines determined by Interstate planners.
Los Angeles, Atlanta, Dallas, San Jose, Denver, Phoenix and Las Vegas.
Impact of Interstate Internet Highway Impact of Interstate Internet Highway System System
Lead to an America that was more mobile, less plagued by regional differences, and vastly wealthier than before.
Sold as a savior for rural America and declining urban core.
Instead it accelerated the trend toward suburanization. Accelerated the transformation to chain restaurants, hotels,
stores, chain everything. The combination of the new highway system and shipping
containers enabled overseas manufacturers and small domestic companies to get products to market faster than ever before.
Highway System PerspectiveHighway System Perspective Federal funding of highways in the US began in 1916 but
became significant in 1956. Highways became a state versus federal issue. Wealthy states built their own. Poorer states were unable
to do so. Southern states gained significant economic benefits from
the federally funded highway system. By eliminating its transportation disadvantages southern
states attracted manufacturers, retailers and shipping companies.
Boom cities of the second half of 20th century did their growing along the lines determined by Interstate planners.
Los Angeles, Atlanta, Dallas, San Jose, Denver, Phoenix and Las Vegas.
Necessary QuestionsNecessary Questions
1. How does the Internet impact the structure of the company?
2. Is a networked enterprise a better vehicle to compete and succeed than a vertically integrated approach.
3. Does this dictate that a company needs to be smaller to be agile, flexible and responsive?
4. Can enough of the benefits of the Internet be realized through intranets and similar techniques?
Necessary QuestionsNecessary Questions
5. Should mergers be emphasize to realize a virtual company approach?
6. Does outsourcing an important business function represent loss of control?
7. How is this different from traditional outsourcing?
8. How do you decide what is a core function?
9. What happens next that will dictate a major change?
Internetworking The GlobalEnterprise
Internetworking The GlobalEnterprise
EmergingGlobal
Markets
EmergingGlobal
Markets
Global BusinessOperations &
Alliances
Global BusinessOperations &
Alliances
InformationTechnologyInformationTechnology
GlobalizationGlobalization
Information Technology and Globalization
Transportation Technology
Drivers of Change
Competitive Environment
Business/IT Strategy
Business Implementation
“Products that travel”
Global MotivationGlobal Motivation
Offense/Defense—Opportunities/Threats
Global economies of scale to recoup R&D and capital costs.
Build and strengthen global brands—economies of scope.
If your competitors have established a global position do you really have a choice as to whether you should also compete on a global basis?
Acknowledge the better standard of living and increased mobility of a greater number of people in countries around the world.
ThereforeTherefore
1. Grasp the opportunities and challenges of the global marketplace.
2. Generate and focus the personal skills and organizational energies needed to attack the global opportunities and challenges.
3. Transform these efforts into world-class performance.
IOS ConclusionsIOS Conclusions
• Successful small information systems tend to grow into larger systems.
• Interorganizational systems are changing business processes, strategies and relationships.
Global LeadershipGlobal Leadership
Business Business AcumenAcumen
Relationship Relationship ManagementManagement
Personal Personal EffectivenessEffectiveness
Culture
PerformanceEvaluation
Organizational Structure and Core Processes
A Sobering ThoughtA Sobering Thought
“It takes at least 25 years to build an effective global management team.”
Alfred Zeien
Former CEO, Gillette
Changes in Concepts, Terminology and Changes in Concepts, Terminology and NetworksNetworks
Interorganizational Systems:
• E-Business and E-Commerce
• Core Processes and Outsourcing
• Business Alliances
• Internet as a global, standardized network
ScopeScope
E-Commerce versus E-Business.
Front end versus business strategies, core business processes, policies and practices geared to succeed with an E-Commerce approach.
Basic Business PrincipleBasic Business Principle
If there is no payment, there is no business transaction.
No business transactions translates to no business revenue.
No business revenue results in a bankrupt business.
US Consumer Payments
0% 10% 20% 30% 40% 50%
Electronic Payment
Other Paper Methods
Debit Cards
Credit Cards
Checks
Cash
US Payment Systems $ Purchase Volume
0% 10% 20% 30% 40% 50% 60%
Other
Cash
Cards
Checks
Payment Process IndustryPayment Process Industry
Member Banks
Visa, Mastercard, Discover, Amex
Merchants
Cardholders
•Businesses
•Individuals
E-Business Check ListE-Business Check List
1 REENGINEER YOUR COMPANYThe Internet lets you communicate instantly with every supplier, partner, and customer--and, in many cases, lets them communicate with each other.
2 THINK BEYOND THE BOUNDARIES OF THE OLD BUSINESS MODELAsk a very basic question: Just who are you in the Internet Age? As you face more global competition online and have to cut your prices, doesn’t it make sense to reexamine yourold business model?
3 REALIZE THAT THE BUYER ALWAYS WINSUnderstand that the buyer runs the show on the Net. Up to now, buyers faced big obstacles to getting the best prices and service--limited time and data to compare vendors' products and the cost of dealing with far-flung suppliers. No more. The anytime-anywhere Net knocks down those barriers.
4 HOLD YOUR CUSTOMER'S HANDRoll out the red carpet--or whatever the cyber-equivalent is. You can use some nifty software package that analyzes purchases and suggests other things the customer might buy. That kind of software helps sell more to customers at little extra cost and treats them as individuals. It is called Customer Relationship Management.
5. OUTSOURCE NON-CORE BUSINESS JOBSThe instant communications power of the Net shatters the physical-world need to do product development, manufacturing, distribution, marketing, and customermanagement all in-house. There are lots of specialists that can do everything from hosting our Web site to running warehouses.
6. NO WEB SITE IS A DESOLATE ISLANDIn going online, an established brand name and purchasing power can work to a company’s advantage.
7. CREATE AN ONLINE SENSE OF COMMUNITYThink global. People all over the world are congregatinginto virtual communities on the Web.
8. FOLLOW THE MONEYThe name of the game in the business world is to make a profit.
9. A WEB OF NERDS? DON'T BELIEVE IT There are 510 million people online worldwide.
10. GET EXECUTIVES LOGGED ON Only 25% of CEOs in a recent Price Waterhouse Coopers survey regularly log on to the Internet. It really helps to get your fingers on a keyboard every day. This is something you can't delegate.
Dell ComputerDell Computer
Occasionally, rarely, history is made when a gifted leader, who has a vision of new processes and technologies, produces a brilliant new business model. Henry Ford did it in automobiles and Michael Dell has done the same in PCs. The parallels are remarkable.
Jacques A. Nasser
Former President and CEO
Ford Motor Company
Ford and Dell?Ford and Dell?
Appreciated the principle of elasticity of demand.
Emphasized innovation in manufacturing.
Vertically integrated. (Ford in-house, Dell outsource)
Stressed standardization and modularity of product.
Passed cost savings along to the customer.
Stressed innovation with a product in a relatively new industry that fundamentally changed the industry.
The popular, low cost product had a major impact on existing products that offered similar function.
The products also had a societal impact.
Dell ComputerDell Computer
Dell Computer is a great American success story. In 2001 Dell became the No. 1 PC manufacturer in the U.S. and the world.
This all happened because Michael Dell started selling computers from his dormitory room while he was a student at the University of Texas. When he consistently grossed $30,000 a month he concluded that he was onto a business opportunity that was too good to pass up.
He quit school as a pre-med student and founded Dell Computer in May 1984.
Direct Business ModelDirect Business Model
Dell was a pioneer and has become the leader of the customer-direct, build-to-order computer systems business.
Its financial success stems from developing and implementing strategies designed to maximize the strengths of the direct business model.
Virtual IntegrationVirtual Integration
Interweaving distinct businesses so that partners
are treated as if they are inside the company.
(A major emphasis on outsourcing non-core
business processes)
Dell Business StrategiesDell Business Strategies
1. Speed to market.
2. Superior customer service.
3. A fierce commitment to producing consistently
high quality products.
4. Custom-made computer products that provide the
highest performance and the latest relevant
technology to customers.
5. Early and effective exploitation of the Internet.
Benefits of the Direct Business ModelBenefits of the Direct Business Model
This business model provides the following competitive advantages.
1. It bypasses computer dealers and avoids related price markups.
2. It enables Dell to build each system to a specific customer order, which eliminates inventories of finished goods to resellers and enables it to move faster to new technologies and lower-cost components.
3. It provides direct contact with thousands of customers every day to tailor support offerings to fit customer target markets and to control the consistency of customer service around the world.
4. Leveraging its relationships with key technology partners enables Dell to rapidly incorporate the most relevant new technologies into its products.
5. The low inventory and low fixed-asset model results in the highest returns on invested capital in the computer industry.
Customer FocusCustomer Focus
The focused vision made Dell the world's leading direct computer systems company, with 29,300 employees in 33 countries around the globe. A bold concept—direct customer contact—has made Dell one of the most successful companies in the world.
Nearly two-thirds of Dell's sales are to large corporations, government agencies and educational institutions. Dell also serves medium and small businesses and home PC users.
What About Financial What About Financial Performance?Performance?
Dell has consistently led the computer industry in performance against all three major priorities: growth, profitability and liquidity.
Competitors won’t just give all the Competitors won’t just give all the PC business to Dell!PC business to Dell!
Several of Dell’s competitors are trying to emulate characteristics of how Dell operates its PC business.
• IBM ceased selling PCs through retail channels.• Gateway has traditionally sold direct but also operates its own retail outlets.• It is fairly safe to conclude that the HP-Compaq merger was motivated by an intent to challenge Dell.
Dell and the InternetDell and the Internet
If you sat back and said, let’s design a technology that could radically impact this company in positive ways.
It would be hard to create one better than the Internet. It essentially puts us that much closer to our customers. It is the ultimate form of direct for us. Because we were already dealing directly with our customers, it was a natural extension for us. We didn’t have to change the way we do business in order to do business on the Internet. Everything was already in place. A nice plus is that the Internet lowers the cost of doing business for us and our customers and it speeds transactions whether you are talking about sales, support or customers getting information.
Michael Dell
Dell Premier Web PagesDell Premier Web Pages
A tailored web page for major customers that contains:
• Purchasing procedures
• Approved computer configurations
• Negotiated prices
• Purchase authority limits
• Order history and discount levels
This cuts order time, helps decrease order errors, keeps track of shipment status and has a record of all Dell units by serial number.
Product DevelopmentProduct Development
Dell employs over 2,000 engineers who focus on providing leading-edge products.
Cisco SystemsCisco Systems
Implemented Cisco Connection Online (CCO) in 1993 as a web-based order entry system at a cost of about $3 million.
Wants to be a model user of its own equipment and “its own network.”
CCO provides twenty-four/seven world access.
Claims to generate 80% of its revenue through CCO.
Serves 1,200 customers exclusively online.
Claims an annual savings of $500 million while increasing customer satisfaction.
Cisco Web AwardsCisco Web Awards
Cisco Connection Online is ranked #1 in this year's Net Marketing 200 best business-to-business Web site. The sites were graded and ranked based on a variety of criteria, including ease of navigation, design, presentation, and e-commerce capabilities.
The Association of Support Professionals bestowed the Top Ten Support Site Award upon CCO based on performance, usability, content, navigation, and appearance.
CCO is Three-time Winner of CIO's 50/50 Award
John Chamber on CiscoJohn Chamber on Cisco
If we do it right, we have a chance to become one of the most influential companies in history.
Intel E-CommerceIntel E-Commerce
Intel went from zero to $1 billion per month in six months.
The close connection to Intel's business strategy gives the IT organization constant feedback on how the products impact Intel's ability to deliver in the marketplace.
“It was a combination of really smart people, disciplined management, a strong team ethic, the ability to apply resources where needed and a culture that lets people switch gears rapidly.”
Doug Busch, IT Vice President
B2B Time LineB2B Time Line
Challenge from Senior Vice President of Sales in early 1998 to take in $1 Billion in sales orders via the Web in Q4 1998.
Took first order in July 1998.
Arrived at $1 Billion per month by the start of Q4 1998.
B2B Readiness B2B Readiness
1. Business Strategy
2. B2B Infrastructure
3. Business Processes
4. Application Development
Secondary ReadinessSecondary Readiness
1. B2B External Initiative
2. Trading Partners
3. Solution Provider
4. Legal
5. Security
6. Audit
Need for StandardsNeed for Standards
They knew that they needed standards.
Did not want standards that would take years to develop.
Standards needed a sound, extendable architecture; would have to be adopted rapidly; and would be demanded by management and supported by business and technology stakeholders in Intel’s business environment.
Helped found Rosettanet—a self supporting organization to develop and support B2B standards.
Links with SuppliersLinks with SuppliersBefore Intel could satisfy its customers' just-in-time demands, it needed to make its own production capacity responsive to demand fluctuations and tighten links to its suppliers.
It assessed the strength of its supply chain at the product development level by analyzing each supplier's ability to provide requisite quality and quantities of materials and equipment.
The company's ongoing effort to innovate often means signing on emerging companies with breakthrough products. Reliance on such youthful suppliers can present logistical challenges: "What if a company is used to making 1,000 widgets but we need a million when we go into production?"
Links with SuppliersLinks with Suppliers
To help its suppliers develop products in harmony with Intel's production needs, the company installed new Web-based tools that allow suppliers to study product drawings and specifications as Intel engineers draft them.
Intel also uses the Web to post policies and guidelines for companies seeking the certificates of compliance that Intel issues to eligible suppliers.
By providing information and forms over the Web, Intel automated most aspects of the formerly paper-intensive certification process.
Links with SuppliersLinks with Suppliers
Intel is in the enviable position of being able to require its suppliers to hold inventory until it's needed on the factory floor.
Intel works to balance its own inventory reduction goals with its suppliers' business needs.
Some suppliers initially balk at holding inventory for Intel, the chip maker helps ease their risk by showing them how to improve their own inventory- and demand-forecasting methods.
IS SupportIS SupportYou're only as good as your supply chain.
That commitment to efficiency also extends to the company's IS practices. Because Intel modifies its product line at least every 18 months, manufacturing plants and the IT that supports them must be nimble.
Intel has instituted a "copy exactly" strategy for systems that support 18 manufacturing, testing and assembly sites on three continents.
Identical architecture and applications support ordering and production planning at every site.
Helping Customers Anticipate Helping Customers Anticipate Market Needs Market Needs
Intel's customers, for the most part PC makers number in the thousands.
Because they assemble their finished products from many components with limited shelf life, OEMs assume the highest risk associated with inventory obsolescence.
Customer Order ConfirmationCustomer Order Confirmation
The improvements Intel has made to its supply chain are paying off.
The company used to require at least 24 hours to confirm orders through an overnight batch system.
Today, Intel is able to confirm delivery dates as orders are placed.