Managing Information Technology

530 Part IV • The Information Management System

Suppliers

Can we use IT to gain leverage over our suppliers?

— Improve our bargaining power?

— Reduce their bargaining power?

Can we use IT to reduce purchasing costs?

— Reduce our order processing costs?

— Reduce supplier’s billing costs?

Can we use IT to identify alternative supply sources?

— Locate substitute products?

— Identify lower-price suppliers?

Can we use IT to improve the quality of products and services we receive from suppliers?

— Reduce order lead time?

— Monitor quality?

— Leverage supplier service data for better service to our customers?

Can we use IT to give us access to vital information about our suppliers that will help us reduce our costs?

— Select the most appropriate products?

— Negotiate price breaks?

— Monitor work progress and readjust our schedules?

— Assess quality control?

Can we use IT to give our suppliers information important to them that will in turn yield a cost, quality, or service

reliability advantage to us?

— Conduct electronic exchange of data to reduce their costs?

— Provide master production schedule changes?

Customers

Can we use IT to reduce our customers’ cost of doing business with us?

— Reduce paperwork for ordering or paying?

— Provide status information more rapidly?

— By reducing our costs and prices?

Can we provide some unique information to our customers that will make them buy our products/services?

— Billing or account status data?

— Options to switch to higher-value substitutes?

— By being first with an easy-to-duplicate feature that will simply provide value by being first?

Can we use IT to increase our customers’ costs of switching to a new supplier?

— By providing proprietary hardware or software?

— By making them dependent upon us for their data?

— By making our customer service more personalized?

Can we use external database sources to learn more about our customers and discover possible market niches?

— By relating buyer behavior from us to buying other products?

— By analyzing customer interactions and questions to us to develop customized products/services or methods of

responding to customer needs?

FIGURE 12.9 Questions to Identify Strategic IT Application Opportunities

For example, an organization’s goal of market differ-
entiation by a high level of on-time delivery of products
requires that operations, outbound logistics, and service
activities (e.g., installation) be highly coordinated, and the
whole process might need to be reengineered to be Web-
enabled. Thus, an automated IS in support of such coordi-
nation could have significant strategic value. In automotive
manufacturing, for example, Internet-based systems that

facilitate sharing of design specifications among design,

engineering, and manufacturing (which might be widely

separated geographically) can greatly reduce new vehicle

development time and cost. Significant advantage can also

be gained at the interfaces between the activities, where

incompatibility in departmental objectives and technolo-

gies can slow the transition process or provide misinforma-

tion between major activities.