Deck 18: Using Advanced Information Technology to Increase Performance

Question 1

The use of management information systems, such as ERPs, often gives employees access to confidential information from all functions and levels of an organization. Employees can see important information about the company's products that is of great value to competitors. As a result, many companies monitor employees' use of the intranet and Internet to prevent an employee from acting unethically, such as by selling this information to competitors. On the other hand, with access to this information employees might discover that their company has been engaging in unethical or even illegal practices.
Ethically speaking, how far should a company go to protect its proprietary information, given that it also needs to protect the privacy of its employees? What steps can it take?

Answer 1

Proprietary information refers to the information that the company has and is not for public knowledge.
The company should keep a balance in protecting its confidential information as well as information related to its employees. Any marketing plans, production processes, names of valuable customers and employees etc should be kept confidential for gaining the competitive advantage.
To protect its confidential information companies can sign non-competition or restrictive covenants (which are enforced by the court) with their employees. It bars them to disclose company information during their job as well as after leaving the job.
The company can even have server passwords which further prohibits the employees to access the company's information.

Question 2

Why is face-to-face communication between managers still important in an organization?

Answer 2

Communication can be described as a way of exchanging information with each other by writing, speaking or by using any other medium. There are various communication channels through which people can communicate.
Face-to-face communication between managers still important in an organization because of the following reasons:
• Face-to-face communication helps you to show your true emotions and reactions to the other person. It helps in building credibility and trust.
• It allows to share ideas more freely within the teams thus boosts creativity and collaboration.
• It helps in reading non-verbal cues by detecting tone, body language, feelings and reactions.

Question 3

Using New Management Information Systems
Form groups of three or four people, and appoint one member as the spokesperson who will communicate your findings to the class when called on by the instructor. Then discuss the following scenario:
You are a team of managing partners of a large management consulting company. You are responsible for auditing your firm's MIS to determine whether it is appropriate and up to date. To your surprise, you find that although your organization has a wireless e-mail system in place and consultants are connected into a powerful local area network (LAN) at all times, most of the consultants (including partners) are not using this technology. It seems that most important decision making still takes place through the organizational hierarchy.
Given this situation, you are concerned that your organization is not exploiting the opportunities offered by new IT to obtain a competitive advantage. You have discussed this issue and are meeting to develop an action plan to get consultants to appreciate the need to learn about and use the new IT.
What advantages can you tell consultants they will obtain when they use the new IT?

Answer 3

An information system can be described as software that helps in analysing and organizing data. This system helps in solving problems related to the organization's mission.
The advantages that can be shared with accountants about using new information technology are as follows:
• It will help in increasing the speed to storing data and generating accounting reports that can be used for decision making process.
• Accountants need to classify data in a particular manner, new information system will going to help them in the data classification process.
• The data will be safe once it got entered in the system and there will be no worries regarding misused or damaged.

Question 4

Ask a manager to describe the main kinds of IT that he or she uses on a routine basis at work.

Question 5

What kinds of IT or MIS can be used to help the company better manage these forces?

Question 6

Compare the pros and cons of using a network structure to perform organizational activities versus perform organizational activities versus performing all activities in-house or within one organizational hierarchy.

Question 7

Analyzing Management Information Systems
Pick an organization about which you have some direct knowledge. It may be an organization you worked for in the past or are in contact with now (such as the college or school you attend). For this organization, answer the following questions:
Do you think that the organization's existing MIS gives managers high-quality, timely, relevant, and relatively complete information? Why or why not?.

Question 8

What are the advantages and disadvantages of business-to-business networks?

Question 9

How B M Retailers Use IT to Attract Customers
T he growing popularity of online shopping at Internet retailers such as Amazon.com, as well as at the online stores of bricks-and-mortar (B M) retailers such as Walmart and Best Buy, is causing major changes in how managers use IT in retail settings and in how they use the skills of retail employees. 44 Today more and more potential buyers are taking advantage of the limitless information they can find on the World Wide Web to become informed customers. Buyers can search online for information about and reviews of the different qualities of competing products; they can then go to specific sites that specialize in providing up-to-date prices being charged for these products by different B M and online retailers. The availability of so much information online poses huge challenges for all retailers, but especially B M retailers because their sales reps are dealing with highly informed customers, and the ability to complete a sale often depends on the retailer being able to offer extra information or customer service compared to an online retailer.
A main challenge confronting managers of B M retailers is to use IT to improve the quality of the shopping experience and to better train their employees to provide higher-quality customer service. In the past, for example, one attraction of shopping at exclusive high-priced department stores was that salespeople would go to great lengths to satisfy customers. For example, sales reps would phone other branches to locate the right size of a dress that a client wanted and have the item shipped overnight. But today, when customers are often as knowledgeable as employees because of their use of the Web, they may just ask a sales rep, "Why don't you look online?" assuming that any retailer today would have IT that provides real-time information about where such items are located. In reality, many retail stores have not kept up with the need to use IT to improve customer service; nor have they thought about how they can improve employee training to make better use of their skills. The result has been falling store performance and the loss of customers to online stores.
So how does a retailer attempt to catch up and use advanced retailing IT, combined with better customer relationship management (CRM) practices, to attract customers back to the B M world? One way is to invest in state-of-the-art retail IT such as touch-screen terminals, LCD monitors, and high-tech interactive TVs that (1) tell customers detailed information about all the important features of the products on hand, (2) help speed up customer service and checkout, and (3) "involve" customers and help convince them they have made the best buying decisions. For example, Bloomingdale's linked up with a specialty IT company in 2007 to run a three-day experiment to use IT to help salespeople aid customers in purchasing decisions. As usual, salespeople helped customers select new clothing; but after the customers tried on the clothing, they paraded before an interactive three-way mirror connected to the Internet. This lets family members and friends who were online see and comment on the different clothing selections, and the customers could use their extra input to make final clothing choices. 45 In 2010 retailers were expected to spend over $1 billion on new in-store IT to improve the shopping experience and keep customers coming back to B M stores. Another way B M stores can use IT to better serve customers is to find ways to link their stores' online sites to the B M stores to encourage customers to think of both kinds of stores as two integrated parts of the same business. Similarly, Bloom Supermarkets, owned by Food Lion, has adopted a novel approach to suit its food business: It has developed an interactive wireless shopping cart that records the nature and dollar value of the items customers put into their carts so they can keep track of their purchases.
The other main way B M companies can compete with online retailers is to make better use of their employees-especially by training employees so they have more information than IT-savvy customers and can provide services that online stores cannot-such as profitable extra services like home setup, service, and repair. Best Buy, for example, decided to retrain 30% of its top salespeople so they would not only possess detailed information about the products in their own departments (for example, PCs or flat-screen TVs) but also know how to match products across departments (for example, to help customers decide which printer is best for a PC that has a certain kind of graphics card). The goal is to give customers extra information that makes a difference and so encourage them to make their purchases in B M stores as well as to believe it is worth their while to come back in the future.
Indeed, another advantage of investing in high-quality customer service is that using IT to bring customers into the store, either to pick up products or to gain better advice, is a major source of extra sales. Why? Customer reps are trained to inform customers about the accessories that will help them better enjoy their purchases (type of protective case for a laptop, or newest video games for a game console). And in B M stores that offer a wide array of products, such as Best Buy or Walmart, customers often explore different departments and make extra purchases-such as a pack of $10 energy-efficient light-bulbs or a $2,000 HDTV. These extra purchases contribute significantly to a store's performance. Walmart, for example, which developed an online-to-B M store program in select stores in 2007, found that it increased the number of customers by 20% and that they spent an extra $60 during their pick-up visits! 46
Which kinds of IT systems discussed in the chapter are most likely to help online companies develop new ways to attract customers and increase their sales?

Question 10

Go to UPS's website (the specific page is.ups-scs.com/solutions/case_consumer.html ). Scroll through the featured case studies including Adidas, Crown premiums, and so on. Read about how UPS used its IT and logistic systems to help these companies, and answer the following questions:
In what specific ways does UPS's IT help these companies improve their efficiency, quality, innovation, and responsiveness to customers, and performance?

Question 11

What is the relationship between IT and competitive advantage?

Question 12

The use of management information systems, such as ERPs, often gives employees access to confidential information from all functions and levels of an organization. Employees can see important information about the company's products that is of great value to competitors. As a result, many companies monitor employees' use of the intranet and Internet to prevent an employee from acting unethically, such as by selling this information to competitors. On the other hand, with access to this information employees might discover that their company has been engaging in unethical or even illegal practices.
When is it ethical for employees to give information about a company's unethical or illegal practices to a third party, such as a newspaper or government agency?

Question 13

Using New Management Information Systems
Form groups of three or four people, and appoint one member as the spokesperson who will communicate your findings to the class when called on by the instructor. Then discuss the following scenario:
You are a team of managing partners of a large management consulting company. You are responsible for auditing your firm's MIS to determine whether it is appropriate and up to date. To your surprise, you find that although your organization has a wireless e-mail system in place and consultants are connected into a powerful local area network (LAN) at all times, most of the consultants (including partners) are not using this technology. It seems that most important decision making still takes place through the organizational hierarchy.
Given this situation, you are concerned that your organization is not exploiting the opportunities offered by new IT to obtain a competitive advantage. You have discussed this issue and are meeting to develop an action plan to get consultants to appreciate the need to learn about and use the new IT.
What problems do you think you may encounter in convincing consultants to use the new IT?

Question 14

In what ways can the Internet help this organization improve its competitive position?

Question 15

Analyzing Management Information Systems
Pick an organization about which you have some direct knowledge. It may be an organization you worked for in the past or are in contact with now (such as the college or school you attend). For this organization, answer the following questions:
How might advanced IT improve the competitive position of this organization? In particular, try to identify the impact that a new MIS might have on the organization's efficiency, quality, innovation, and responsiveness to customers.

Question 16

What are the various forces in a specialty furniture maker's task environment that have the most affect on its performance?

Question 17

How B M Retailers Use IT to Attract Customers
T he growing popularity of online shopping at Internet retailers such as Amazon.com, as well as at the online stores of bricks-and-mortar (B M) retailers such as Walmart and Best Buy, is causing major changes in how managers use IT in retail settings and in how they use the skills of retail employees. 44 Today more and more potential buyers are taking advantage of the limitless information they can find on the World Wide Web to become informed customers. Buyers can search online for information about and reviews of the different qualities of competing products; they can then go to specific sites that specialize in providing up-to-date prices being charged for these products by different B M and online retailers. The availability of so much information online poses huge challenges for all retailers, but especially B M retailers because their sales reps are dealing with highly informed customers, and the ability to complete a sale often depends on the retailer being able to offer extra information or customer service compared to an online retailer.
A main challenge confronting managers of B M retailers is to use IT to improve the quality of the shopping experience and to better train their employees to provide higher-quality customer service. In the past, for example, one attraction of shopping at exclusive high-priced department stores was that salespeople would go to great lengths to satisfy customers. For example, sales reps would phone other branches to locate the right size of a dress that a client wanted and have the item shipped overnight. But today, when customers are often as knowledgeable as employees because of their use of the Web, they may just ask a sales rep, "Why don't you look online?" assuming that any retailer today would have IT that provides real-time information about where such items are located. In reality, many retail stores have not kept up with the need to use IT to improve customer service; nor have they thought about how they can improve employee training to make better use of their skills. The result has been falling store performance and the loss of customers to online stores.
So how does a retailer attempt to catch up and use advanced retailing IT, combined with better customer relationship management (CRM) practices, to attract customers back to the B M world? One way is to invest in state-of-the-art retail IT such as touch-screen terminals, LCD monitors, and high-tech interactive TVs that (1) tell customers detailed information about all the important features of the products on hand, (2) help speed up customer service and checkout, and (3) "involve" customers and help convince them they have made the best buying decisions. For example, Bloomingdale's linked up with a specialty IT company in 2007 to run a three-day experiment to use IT to help salespeople aid customers in purchasing decisions. As usual, salespeople helped customers select new clothing; but after the customers tried on the clothing, they paraded before an interactive three-way mirror connected to the Internet. This lets family members and friends who were online see and comment on the different clothing selections, and the customers could use their extra input to make final clothing choices. 45 In 2010 retailers were expected to spend over $1 billion on new in-store IT to improve the shopping experience and keep customers coming back to B M stores. Another way B M stores can use IT to better serve customers is to find ways to link their stores' online sites to the B M stores to encourage customers to think of both kinds of stores as two integrated parts of the same business. Similarly, Bloom Supermarkets, owned by Food Lion, has adopted a novel approach to suit its food business: It has developed an interactive wireless shopping cart that records the nature and dollar value of the items customers put into their carts so they can keep track of their purchases.
The other main way B M companies can compete with online retailers is to make better use of their employees-especially by training employees so they have more information than IT-savvy customers and can provide services that online stores cannot-such as profitable extra services like home setup, service, and repair. Best Buy, for example, decided to retrain 30% of its top salespeople so they would not only possess detailed information about the products in their own departments (for example, PCs or flat-screen TVs) but also know how to match products across departments (for example, to help customers decide which printer is best for a PC that has a certain kind of graphics card). The goal is to give customers extra information that makes a difference and so encourage them to make their purchases in B M stores as well as to believe it is worth their while to come back in the future.
Indeed, another advantage of investing in high-quality customer service is that using IT to bring customers into the store, either to pick up products or to gain better advice, is a major source of extra sales. Why? Customer reps are trained to inform customers about the accessories that will help them better enjoy their purchases (type of protective case for a laptop, or newest video games for a game console). And in B M stores that offer a wide array of products, such as Best Buy or Walmart, customers often explore different departments and make extra purchases-such as a pack of $10 energy-efficient light-bulbs or a $2,000 HDTV. These extra purchases contribute significantly to a store's performance. Walmart, for example, which developed an online-to-B M store program in select stores in 2007, found that it increased the number of customers by 20% and that they spent an extra $60 during their pick-up visits! 46
Search the Web to discover how Amazon.com has recently adopted methods to increase its level of customer service.

Question 18

Analyzing Management Information Systems
Pick an organization about which you have some direct knowledge. It may be an organization you worked for in the past or are in contact with now (such as the college or school you attend). For this organization, answer the following questions:
Describe the management information systems that are used to coordinate and control organizational activities and to help make decisions.

Question 19

Because of the growth of high-powered, low-cost wireless communications and IT such as videoconferencing, many managers soon may not need to come into the office to do their jobs. They will be able to work at home. What are the pros and cons of such an arrangement?

Question 20

How B M Retailers Use IT to Attract Customers
T he growing popularity of online shopping at Internet retailers such as Amazon.com, as well as at the online stores of bricks-and-mortar (B M) retailers such as Walmart and Best Buy, is causing major changes in how managers use IT in retail settings and in how they use the skills of retail employees. 44 Today more and more potential buyers are taking advantage of the limitless information they can find on the World Wide Web to become informed customers. Buyers can search online for information about and reviews of the different qualities of competing products; they can then go to specific sites that specialize in providing up-to-date prices being charged for these products by different B M and online retailers. The availability of so much information online poses huge challenges for all retailers, but especially B M retailers because their sales reps are dealing with highly informed customers, and the ability to complete a sale often depends on the retailer being able to offer extra information or customer service compared to an online retailer.
A main challenge confronting managers of B M retailers is to use IT to improve the quality of the shopping experience and to better train their employees to provide higher-quality customer service. In the past, for example, one attraction of shopping at exclusive high-priced department stores was that salespeople would go to great lengths to satisfy customers. For example, sales reps would phone other branches to locate the right size of a dress that a client wanted and have the item shipped overnight. But today, when customers are often as knowledgeable as employees because of their use of the Web, they may just ask a sales rep, "Why don't you look online?" assuming that any retailer today would have IT that provides real-time information about where such items are located. In reality, many retail stores have not kept up with the need to use IT to improve customer service; nor have they thought about how they can improve employee training to make better use of their skills. The result has been falling store performance and the loss of customers to online stores.
So how does a retailer attempt to catch up and use advanced retailing IT, combined with better customer relationship management (CRM) practices, to attract customers back to the B M world? One way is to invest in state-of-the-art retail IT such as touch-screen terminals, LCD monitors, and high-tech interactive TVs that (1) tell customers detailed information about all the important features of the products on hand, (2) help speed up customer service and checkout, and (3) "involve" customers and help convince them they have made the best buying decisions. For example, Bloomingdale's linked up with a specialty IT company in 2007 to run a three-day experiment to use IT to help salespeople aid customers in purchasing decisions. As usual, salespeople helped customers select new clothing; but after the customers tried on the clothing, they paraded before an interactive three-way mirror connected to the Internet. This lets family members and friends who were online see and comment on the different clothing selections, and the customers could use their extra input to make final clothing choices. 45 In 2010 retailers were expected to spend over $1 billion on new in-store IT to improve the shopping experience and keep customers coming back to B M stores. Another way B M stores can use IT to better serve customers is to find ways to link their stores' online sites to the B M stores to encourage customers to think of both kinds of stores as two integrated parts of the same business. Similarly, Bloom Supermarkets, owned by Food Lion, has adopted a novel approach to suit its food business: It has developed an interactive wireless shopping cart that records the nature and dollar value of the items customers put into their carts so they can keep track of their purchases.
The other main way B M companies can compete with online retailers is to make better use of their employees-especially by training employees so they have more information than IT-savvy customers and can provide services that online stores cannot-such as profitable extra services like home setup, service, and repair. Best Buy, for example, decided to retrain 30% of its top salespeople so they would not only possess detailed information about the products in their own departments (for example, PCs or flat-screen TVs) but also know how to match products across departments (for example, to help customers decide which printer is best for a PC that has a certain kind of graphics card). The goal is to give customers extra information that makes a difference and so encourage them to make their purchases in B M stores as well as to believe it is worth their while to come back in the future.
Indeed, another advantage of investing in high-quality customer service is that using IT to bring customers into the store, either to pick up products or to gain better advice, is a major source of extra sales. Why? Customer reps are trained to inform customers about the accessories that will help them better enjoy their purchases (type of protective case for a laptop, or newest video games for a game console). And in B M stores that offer a wide array of products, such as Best Buy or Walmart, customers often explore different departments and make extra purchases-such as a pack of $10 energy-efficient light-bulbs or a $2,000 HDTV. These extra purchases contribute significantly to a store's performance. Walmart, for example, which developed an online-to-B M store program in select stores in 2007, found that it increased the number of customers by 20% and that they spent an extra $60 during their pick-up visits! 46
In what ways can B M stores develop new IT to help improve customers' shopping experience?

Question 21

Using New Management Information Systems
Form groups of three or four people, and appoint one member as the spokesperson who will communicate your findings to the class when called on by the instructor. Then discuss the following scenario:
You are a team of managing partners of a large management consulting company. You are responsible for auditing your firm's MIS to determine whether it is appropriate and up to date. To your surprise, you find that although your organization has a wireless e-mail system in place and consultants are connected into a powerful local area network (LAN) at all times, most of the consultants (including partners) are not using this technology. It seems that most important decision making still takes place through the organizational hierarchy.
Given this situation, you are concerned that your organization is not exploiting the opportunities offered by new IT to obtain a competitive advantage. You have discussed this issue and are meeting to develop an action plan to get consultants to appreciate the need to learn about and use the new IT.
What steps might you take to motivate consultants to learn to use the new technology?

Question 22

Go to UPS's website (the specific page is http://www.ups-scs.com/solutions/case_consumer.html ). Scroll through the featured case studies including Adidas, Crown premiums, and so on. Read about how UPS used its IT and logistic systems to help these companies, and answer the following questions:
What are the main ways in which UPS can use its IT and logistics skills to help its clients?

Question 23

Many companies have reported that it is difficult to implement advanced management information systems such as ERP systems. Why do you think that this is so? How might the roadblocks to implementation be removed?

Question 24

To be useful, information must be of high quality, be timely, be relevant, and be as complete as possible. Why does a tall management hierarchy, when used as a management information system, have negative effects on these desirable attributes?

Question 25

How can IT help in the new product development process?