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Information Systems Strategy - Functional Strategies

   Posted On :  26.06.2018 09:57 pm

Corporations are increasingly adopting information system strategies in that they are turning to information systems technology to provide business units with competitive advantage.

Information Systems Strategy
 
Corporations are increasingly adopting information system strategies in that they are turning to information systems technology to provide business units with competitive advantage.
 
Multinational corporations are finding that the use of a sophisticated intranet for the use of its employees allows them to practice follow – the –sun management, in which project team members living in one country can pass their work to team members in another country in which the work day is just beginning. Thus, night shifts are no longer needed.
 
The development of instant translation software is also enabling workers to have online communication with coworkers in other countries who use a different language. Lotus Translation Services for Same time is a Java –based application that can deliver translated text during a chart session or an instant in 17 languages. Software, e-lingo (www.e-lingo. com) offers a multilingual search function and Web surfing as well as text and e-mail translation.
 
The use of information systems for improving competitive advantage has become common. The case of Wal-Mart described in Exhibit 14-1 exemplify this argument.
 
Exhibit 14-1 Wal-Mart Information Strategy
 
In 1989, Wal-Mart started building a huge database of customer information in its data warehouse systems located at its headquarters at Bentonville, Arkansas. The company collected sales and customer related information for each store and fed that information into the warehouse systems.
 
In the early 1990s, Wal-Mart continued to employ new technologies to facilitate better analysis of customer data as they became available. Wal-mart’s IT experts used 3-D visualization tools to make accurate estimates of products most likely to be bought by customers on the basis of parameters such as ethnicity, geographic location, weather patterns, local sports affiliations, and around 10,000 other varied parameters. Wal-Mart made around 90% of its stock replenishments every month, based on the analysis of customer data generated through the data warehouse.
 
To make shopping at Wal-Mart a pleasant experience, Wal-Mart installed customer information kiosks in its stores in 1996. The kiosks helped customers find out the price of any product and get a brief description of it. In 1996, Wal-Mart launched its website – www.walmart. com - to provide information to its customers on all the products it stocked and to enable online sales.
 
IT played an important role in improving the efficiency of operations at Wal-Mart. The benefits which accrued were passed on to customers, as per Wal-Mart’s policy. Wal-Mart’s annual report 1999 said, “The first and the most important thing about Wal-Mart’s information systems is precisely that the customer’s needs come first. By using technology to reduce inventory, expenses and shrinkage, we can create lower prices for our customers and better returns for our shareholders”.
 
At the dawn of the new millennium, Wal-Mart was one of the world’s largest companies, with revenues of $165 bn in fiscal 2000. Wal-Mart’s ‘store of the community’ program made effective use of bar code technology and advanced data mining techniques. The ‘store of the community’ program was a very successful initiative by Wal-Mart, which contributed to increased customer loyalty. By 2003, Wal-Mart was the world’s largest company, with revenues in fiscal 2002 amounting. 
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