“Information systems strategy” means
how you invest in information systems to meet your most important long-term
goals.
All businesses exist to make a profit, so for a business the term
“information systems strategy” always means using information systems to
increase profit. For government and
non-profit organizations, it means using information systems to meet your mission, which means your most
important objectives other than profit.
There are intermediate goals to increasing
profit or meeting your mission. For
example, increasing customer service may be an important strategic goal for a
business or organization. Achieving this
intermediate goal may be necessary to increasing profit or achieving your
non-profit mission.
BellSouth is a U.S. telephone
company that also sells internet service.
Selling internet service is a very important part of the company’s
business strategy, but in 2001 the computer system they used for customers to
order internet service was very inefficient.
The company decided to install “customer relationship management” (CRM) software
they bought from Oracle Corporation. It
took 9 months and cost $1 million but it helped BellSouth grow from 200,000
customers to 660,000 customers in one year.
Most important, 90% of the new customers were able to use the new
service to order internet service without any help from customer support
personnel. This reduced the cost to
BellSouth for taking orders for new internet service by 50%. The new system also reduced the number of
customer support calls and made it easier for BellSouth to sell other services
to internet customers. BellSouth grew
from $3 million to $500 million per year in revenue from internet service and
has the highest customer satisfaction of any internet service company.
BellSouth makes decisions about
information systems investments at the highest levels of management so that
those decisions are sure to meet the company’s most important goals. This is what “information systems strategy”
means.
Marriott International is a
worldwide operator of hotels (including in Maldives). The Chief Information Officer (CIO) of
Marriott has said that there is no difference between an information technology
(IT) project and a business project because IT is a key part of the products
and services that they provide to their customers.
What is CRM?
Customer relationship management (CRM) is a corporate level strategy
which focuses on creating and maintaining lasting relationships with its
customers. Although there are several commercial CRM software packages on the
market which support CRM strategy, it is not a technology itself. Rather, a
change in an organisation's philosophy which places emphasis on the customer.
A successful CRM strategy cannot be implemented by simply installing and
integrating a software package and will not happen over night. Changes must
occur at all levels including policies and processes, front of house customer
service, employee training, marketing, systems and information management; all
aspects of the business must be reshaped to be customer driven.
To be effective, the CRM process needs to be integrated end-to-end
across marketing, sales, and customer service. A good CRM program needs to:
* Identify customer success
factors
* Create a customer-based
culture
* Develop an end-to-end
process to serve customers
* Recommend what questions to
ask to help a customer solve a problem
* Recommend what to tell a
customer with a complaint about a purchase
* Track all aspects of selling
to customers and prospects as well as customer support.
http://en.wikipedia.org/wiki/Customer_Relationship_Management
Information Systems combine the following basic
resources to create the end result:
·
People resources include end users of the system and
the system’s planners, designers, programmers, managers, operators and support
personnel.
·
Hardware resources include computers, input and output
devices such as displays and printers, storage devices such as servers.
·
Software resources include computer operating systems,
personal productivity programs such as word processors and spreadsheet
programs, business applications and database management programs as well as the
procedures for using the system.
·
Data resources are the information that the system
manages, such as product information, sales information, personnel information
and information about expenses.
·
Network resources are the physical communication
connections, communication processors and network control software.
·
Information products are the outputs of the system,
including management reports and business documents.
Words You Should Know
Information
Technology. Computer-based systems that use computer
hardware and software, telecommunications (including the internet) and data
management processes to provide services to users.
Business
Applications.
Computer hardware and software used to operate and manage a business or
organization.
Development Process. How computer systems are
planned, designed, created, put into use and maintained.
Computer System. A combination of hardware,
software and network that accepts input of data, processes that data using
mathematical calculations, and presents the results to users as output.
There is a
difference between data and information. Data
is made up of raw facts. For example, a
store may have data about what products it has for sale, how much they cost,
what is the selling price, and how much has been sold. This data may consist of thousands of
descriptions and numbers. You can look
at this data directly but it will probably be difficult to use and
understand. It needs to be processed
into information which is more
useful. For example, it may be useful to
know how much of a product was sold last month and how much of that product you
still have in the store, so that you know if you need to buy more so that you
don’t run out. Data that has been
processed to make it useful is called information.
IT has 3
major roles in business. The most basic
role is to support business processes. This is using IT to control the operations of
the business and keep information about business activities. For example, to keep a record of the
company’s inventory, sales and expenses.
The second
major role is to support decision making.
This use of IT helps managers make decisions, such as which products to keep in
the store and how much inventory to keep on hand.
The third
major role of IT is to support
competitive advantage. This use of
IT allows a business to provide better service to customers as a way to get
more customers than competing businesses.
For example, a store may install computers in the store for customers to
use to find information about products in the store. Customers will come to that store instead of
another store because the information is useful to them.
What is Supply Chain
Management (SCM)?
Supply chain management (SCM) is the process of planning, implementing,
and controlling the operations of the supply chain with the purpose to satisfy
customer requirements as efficiently as possible. Supply chain management spans
all movement and storage of raw materials, work-in-process inventory, and
finished goods from point-of-origin to point-of-consumption. http://en.wikipedia.org/wiki/Supply_chain_management
