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Betriebliche Informationssysteme
Strategy
Strategy
IS Information systems perform three vital roles in business firms. They support:
Business processes and operations Business decision making Strategic competitive advantage
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Information Systems (IS) 1. Strategy 1.1. The Evolving Role of Information Systems and Technology in Organizations: A Strategic Perspective Implications for Management and Strategic Planning Creating and Sustaining Competitive Advantage with IT/IS Strategy Tools and Techniques Cases
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References (must read) Ward, J.; Peppard, J. (2002): Strategic Planning for Information Systems, 3rd ed., Wiley Series in Information Systems, John Wiley&Sons, Chapter 1
Clarke, Roger (1994): The Path of Development of Strategic Information Systems Theory, Online: http://www.anu.edu.au/people/Roger.Clarke/SOS/StratISTh.html
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1.1. The Evolving Role of Information Systems and Technology in Organizations: A Strategic Perspective
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ORGANIZATIONS
TECHNOLOGY
INFORMATION SYSTEMS
MANAGEMENT
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Contemporary Approaches to IS
Technical Approaches Computer Science Operations Research
Management Science
IS
Sociology
Psychology
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Decision Decision Support Support Systems Systems - -Ad hoc Ad hoc Reports Reports
End User End User Computing Computing Exec Info Sys Exec Info Sys Expert Systems Expert Systems SIS SIS
Electronic Electronic Business & Business & Commerce Commerce -Internetworked -Internetworked E-Business & E-Business & Commerce Commerce
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Source: Ward/Peppard, 3rd ed., p. 12; partly derived from EDP AnalyserHow the management job is changing, June 1984, Vol. 22, No. 6
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From the data processing (DP) era (1960s) towards the management information systems (MIS) era (1970s onwards) Traditional, mainly operational and control, systems were essentially of two types:
Monitoring transaction handling and control; Exception triggered reporting and/or action. Although these provide management with information, they are primarily focused on the processing of data.
At about the same time, office automation systems provided new means of processing and communicating information.These advancements permitted two new functions to be added to the repertoire of IS/IT:
Enquiry flexible access to data and information initiated by user Request analysis decision support, with flexible processing of data and information.
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1. How was the large new investment required in hardware and softwaremany hundreds of workstations, networking costs and multiple licences for software packagesto be justified?
The rationale for investment had reverted, in many cases, from business pull to technology push.
2. How should the new applications and supporting technology be managed and, even more critically, who should be responsible?
Should the role of the IT unit be extended or should such systems be the responsibility of users?
Were the new office systems an extension to a department level of personal computing or an integral part of the organizations information processing ability and resources? How did the management of personal computing and office systems relate?
As the new strategic potential of IS/IT began to be appreciated in the mid-1980s, most organizations were still wrestling with the problems of managing concurrent DP and MIS applications based on rapidly evolving technology.
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The Strategic Information Systems Era During the late 1970s, a number of organizations had began to use IS/IT in ways that fundamentally changed how their business was conducted, changing the balance of power in their industry with respect to competitors, customers and/or suppliers.
The use of IS/IT was thus directly influencing their competitive position and had become a new weapon to improve their competitiveness, implying a new relationship between IS/ IT investment and strategic development.
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(1/2)
The objectives of DP and MIS are, strictly speaking, a subset of the SIS objectiveto improve competitiveness.
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(2/2)
Source: Ward/Peppard, 3rd ed., p. 24; adapted from R.D. Galliers and E. Somogyi, From data processing to strategic information systems: A historical perspective, in R.D. Galliers and E. Somogyi, eds, Towards Strategic Information Systems, Abacus Press, 1987
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Strategic Uses of IS/IT: Classification, and Management Implications, Factors for Success
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Classification of Strategic Systems 1/4 (Ward/Peppard) The four main types of strategic system appear to be, those that
1. share information via technology-based systems with customers/ consumers and/or suppliers and change the nature of the relationship; 2. produce more effective integration of the use of information in the organizations value-adding processes; 3. enable the organization to develop, produce, market and deliver new or enhanced products or services based on information; 4. provide executive management with information to support the development and implementation of strategy (in particular, where relevant external and internal information are integrated in analysis).
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Classification of Strategic Systems 2/4 (Notowidigdo) internal systems that have direct benefit for the company; external systems that have direct benefits for the companys customers.
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2. business network redesignchanging the way information is used by the organization and its trading partners, thereby changing how the industry overall carries out the value-adding processes;
3. business scope redefinitionextending the market or product set, based on information or changing the role of the organization inthe industry.
1.-3. called revolutionary levels within Scott Mortons framework
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evolutionary levels
localised exploitation within individual business functions. The primary objectives addressed are local efficiency and effectiveness; internal integration between different systems and applications, generally involving not just automation, but also rationalisation, and using a common IT platform. Efficiency and effectiveness are enhanced by coordination and cooperation within the enterprise.
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Business Scope Redefinition Business Network Redesign Business Process Redesign Internal Integration Localised Exploitation
Evolutionary Levels (Automate & Informate)
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Applications portfolio
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Strategy
(1/2)
The IS strategy defines the organizations requirement or demand for information and systems to support the overall strategy of the business. It is firmly grounded in the business, taking into consideration both the competitive impact and alignment requirements of IS/IT. Essentially, it defines and prioritizes the investments required to achieve the ideal applications portfolio, the nature of the benefits expected and the changes required to deliver those benefits, within the constraints of resources and systems interdependencies.
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(2/2)
The IT strategy is concerned with outlining the vision of how the organizations demand for information and systems will be supported by technologyessentially, it is concerned with IT supply. It addresses the provision of IT capabilities and resources (including hardware, software and telecommunications) and services such as IT operations, systems development and user support.
In short:
IS demand refers to the IS strategy Similarly, IT supply refers to IT strategy
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Why Have an IS/IT Strategy? Or: Consequences of not having an IS/IT Strategy
(1/2)
Systems investments are made that do not support business objectives. Systems are not integrated. This can also lead to duplication of effort and data leading to inaccuracy and no coherent information resource. No means of setting priorities for IS projects/resources and constantly changing plans leading to lower productivity, etc. No mechanisms for deciding optimum resource levels or the best means of supplying systems. Poor management information; it is either not available, inconsistent, inaccurate or too slow.
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Why Have an IS/IT Strategy? Or: Consequences of not having a IS/IT Strategy (2/2) Misunderstanding between users and IT specialists leading to conflict and dissatisfaction. Technology strategy is incoherent and constrains options. Inadequate infrastructure investments made. All projects evaluated on financial basis only. Problems caused by IS/IT investments can become a source of conflict between parts of the organization. Localized justification of investments can produce benefits that are actually counterproductive in the overall business context. Systems, on average, have a shorter than expected business life and require, overall, considerably greater IS/IT spending to redevelop more frequently than should be necessary.
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Environments of IS/IT strategy, INTERNAL perspective Framework by SULLIVAN (1/3) simple matrix to explain how the IS/IT strategic environment is being affected by forces outside the control of any individual organization. He describes two axes within which an organization can consider the implications of these forces:
Infusion: the degree to which an organization becomes dependent on IS/IT to carry out its core operations and manage the business; Diffusion: the degree to which IT has become dispersed throughout the organization and decisions concerning its use are devolved.
By plotting high and low degrees of infusion and diffusion, four essentially different environments are established.
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Environments of IS/IT strategy, EXTERNAL perspective The duality of IT (1/3) The duality of technology:
it not only supports the strategy of an organization (arrow astrategic alignment) but can also define the business, as strategic moves may not be possible without technology (arrow bcompetitive impact).
Strategy
Environments of IS/IT strategy, EXTERNAL perspective The duality of IT (3/3) However, an organization does not exist in isolation (unless it occupies a monopoly position), but has competitors and is part of a wider industry system and business environment.
Competitors moves, including new entrants, affect the dynamics of an industry and, consequently, the organization itself and its strategies (arrow c); at the same time, strategic plays made by the organization effect competitor moves (arrow d). Technological innovations can have disruptive effects on an industry (arrow e), rewriting the rules of competition and even challenging traditional notions of industry structure.
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1.3.
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Why is Michael Porter important? First strategy writer to analyze why information and IT can be critical to competitive advantage
Competitive Strategy, 1980 Competitive Advantage, 1985
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What are possible strategies that may lead to competitive advantage? (1/2) Competitive Strategies (Porter, 1985)
Cost leadership Differentiation Focus
Differentiation
Narrow Target
Cost Focus
Differentiation Focus
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What are possible strategies that may lead to competitive advantage? (2/2) Additional competitive strategies
growth increasing market share, acquiring more customers or selling more products. improved internal efficiency alliances working with business partners to create synergy & provide opportunities for growth innovation developing new products and services customer relationship management customer-oriented approaches time competing on the basis of time
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How Can You Deploy IT to Create a Competitive Advantage? Identify novel uses of IT that are consistent with and support your strategy These novel uses of IT may:
Reinforce your cost leadership position Allow you to provide product/service differentiation to your customers (or suppliers)
Strive to lock-in your customers (or buyers) through such innovative uses of IT
What factors can enhance customer lock-in?
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But Remember, We Said There Are Two Major Schools of Thought 1. The strategic positioning school of strategy
Associated with Michael Porter Select the right position in an attractive industry
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Unless the capabilities to create the innovative IT solution are unique and immobile, then second-movers may:
copy your great ideas more cheaply learn from your mistakes
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Resource Based View of the Firm and Sustainable Competitive Advantage A resource (asset) is valuable to the firm when: 1. It adds positive value to the firm
rather than a liability e.g., outmoded factories or employees Dorothy Leonard-Barton, Core Capabilities and Core Rigidities
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When is Competitive Advantage Sustainable or Temporary? All three criteria must be present for a firm to have a sustainable competitive advantage If only two of the criteria are present (1 and 2), then a firm has a temporary competitive advantage
if the resource is not immobile what is an example of such a resource?
If only one of the criteria is present (1), then a firm only has competitive parity
if the resource is equally distributed across firms if the resource is not immobile what is an example of such a resource?
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Which of these are sources of sustained competitive advantage for a firm? Why?
Customer lock-in Access to financial capital Proprietary technology (patents, copyrights, etc.) Technical IT skills (e.g., software developers) Managerial IT skills (e.g., IT managers, business unit managers, the ability to collaborate in order to identify and deploy effective IT)
Why do the authors argue that many of these resources cant create sustainable advantage?
IT and Sustained Competitive Advantage: A Resource Based Analysis, MIS Quarterly 1995
Prof. Dr. Detlef Schoder Betriebliche Informationssysteme WS 03/04
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(1/2)
Locking in Customers and Suppliers
Outcome
Prof. Dr. Detlef Schoder
Enhance Efficiency
Strategy
(2/2)
Build a Strategic Information Base
Outcome
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A brief critique
(1/3)
A particularly surprising weakness of the existing literature is its inapplicability to organisations which are not subject to powerful market-based competitive forces, such as notfor-profit enterprises, public sector agencies, and associations which are intentionally monopolistic, including industry and professional associations. This is so marked that some definitions of the term 'strategic IS' are restricted to systems that "confer a unique, sustainable, or otherwise significant advantage" (Ciborra 1991).
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A brief critique
(2/3)
It is contended that, even in corporations operating in free-market economies, organisational strategy should not be analysed exclusively in competitive terms. Other possible bases include:
short-term survival (which is essentially concerned with being around long enough to be able to compete at all); medium-term survival (which is concerned with the establishment or re-establishment of a platform or infrastructure on which recovery from current difficulties can be based); service ("our clients need it"); the marketing imperative ("our customers want it"); the regulatory imperative ("if we don't do it, we'll be precluded from participating by some powerful legal or political authority"); corporate infrastructure (which is concerned with investing in an environment which will support future adaptability, and the conception and implementation of as yet unspecified - and probably unspecifiable - future strategic advantage); and the national strategic imperative ("the government has determined that it is essential to the nation's competitiveness"). This is apparent as an important factor in such countries as Japan and Singapore, and is the subject of Porter (1989).
Source: Clarke, R. (1994)
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A brief critique
(3/3)
A further common feature of most papers to date is the implicit assumption that business needs drive IT and information strategy. There is evidence, however, that, in some organisations, IT strategic planning is driving corporate planning, and that IT can actively assist in the creation of business opportunities, rather than just support them (Oesterle 1991).
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1.4 Strategy Tools and Techniques Ward, J.; Peppard, J. (2003): Strategic Planning for Information Systems, 3rd ed., Wiley Series in Information Systems, John Wiley&Sons, Chapter 2
Good overview: Clarke, Roger (1994): The Path of Development of Strategic Information Systems Theory, Online: http://www.anu.edu.au/people/Roger.Clarke/SOS/StratISTh.html
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A Strategic Framework
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External IS / IT environment Strategic IS / IT planning process Planning, approaches, tools & techniques
O U T P U T S
IT strategy
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Methods and Frameworks Portfolio and Planning Matrices based on life-cycle approach (BCG) Value chain (Porter 1980, 1985) Information intensity matrix (Porter and Millar 1985) Earls procedure for generating competitive strategies (Earl 1987, based on Porter and Wiseman) Customer resource lifecycle model (Ives and Learmonth 1984)
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Source: Ward/Peppard, 3rd ed., p.71; derived from an analysis in J.M. Higgins, Strategy Formulation, Implementation and Control, Dryden Press, New York, 1985, pp. 130135
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Value Chain and IS, examples (specific to Airline industry) Identifies uses of IT for each element of the value chain
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The airline industry: how IS/IT has affected competitive forces (1/2)
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The airline industry: how IS/IT has affected competitive forces (2/2)
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Earls Procedure for Generating Competitive Strategies (based on Porter and Wiseman) Earl (1987)
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Fro m: Ive s, B. and Learmonth, G. "The Information Sy ste m a s a Co mpetitive Weapon", Co mmunications of the ACM , Dece mber 1984, page 25.
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1.5. Cases in Strategic Information Systems Success Factors in Strategic Information Systems Cases
ECONOMOST, McKesson Drugs SABRE, American Airlines MAC vs. GEORGE
Vgl. Ward/ Peppard, 2002, 3rd ed., pp. 28 Merrill Lynch, American Hospital Supply, Otis Elevators, Schneider National, Inc., Amazon.com, Bootsphoto.com, Leather Xchange.com, Ryanair, ATC Bologna,
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Success Factors in Strategic Information Systems External, not internal, focus Adding value, not cost reduction Sharing the benefits Understanding customers Business-driven innovation, not technology-driven Incremental development Using the information gained
See cases!
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Literatur: Clemons/Row, 1988; Clemons, 1991; Segars/Grover, 1993; Kettinger et al., 1994 Im Jahr 1975 fhrte der amerikanische Pharma-Grohndler McKesson Drugs das elektronische Bestellsystem ECONOMOST landesweit ein, nachdem das System bereits einige Jahre in Teilen Kaliforniens eingesetzt wurde. McKesson ist ein Grohndler, der vor allem kleine Apotheken beliefert. Mit ECONOMOST wird das Bestellwesen fr diesen Kundenkreis wesentlich vereinfacht. McKesson stellt dem Abnehmer einen Strichcode-Leser oder ein tragbares Datenerfassungsgert zur Verfgung, mit dem bei einem Rundgang durch das Lager die Bestellnummern der bentigten Artikel erfasst werden. Die Bestelldaten werden ber Telefonleitung an McKesson bertragen. In der Regel werden die Bestellungen am nchsten Tag geliefert. Bei der Zusammenstellung der Lieferung wird die Anordnung des Lagers des Kunden bercksichtigt, so dass der Kunde die Waren der Reihe nach aus der Transportverpackung entnehmen und im Lager einordnen kann. Preisschilder und Codes fr den Strichcodeleser werden von McKesson ebenfalls mitgeliefert, auerdem erhlt der Kunde auf Wunsch ausfhrliche Auswertungen ber die einzelnen Artikel. Das System bietet somit fr die Kunden wesentliche Vorteile: die Kosten des Bestellwesens und der Lagerverwaltung deutlich reduziert, McKesson gewhrt fr ber ECONOMOST bestellte Artikel erhebliche Rabatte und der Kunde erhlt Management-Informationen, ber die Einzelhndler dieser Gre sonst nicht verfgen. Die elektronische Form der Bestellungen bietet auch fr McKesson selbst erhebliche Vorteile. Das Personal fr die Aufnahme telefonischer Bestellungen wurde von 700 auf 15 reduziert. Die Abwicklung im Lager kann wesentlich schneller erfolgen, da die Bestellungen intern nach dem Aufbau des Lagers sortiert werden. Im Zeitraum 1975-1985 stieg die Produktivitt des im Lager eingesetzten Personals auf das Fnffache. Da die erforderlichen Lieferungen im System erfasst sind, kann die Transportplanung optimiert werden, was die Transportkosten wesentlich verringert hat. Insgesamt konnte McKesson im Zeitraum von 1975 bis 1987 seinen Umsatz um 424% erhhen, whrend die Kosten nur um 86% stiegen. Bereits Mitte der 80er-Jahre war erkennbar, dass die Einfhrung des Systems auch wesentliche Auswirkungen auf den gesamten Markt hatte. Zum Zeitpunkt der Einfhrung des Systems befanden sich die kleinen unabhngigen Apotheken in intensivem Wettbewerb mit groen Ketten. Die groen Ketten hatten gegenber den kleinen Apotheken erhebliche Kostenvorteile. Zum Teil bezogen die Ketten ihre Waren unter Umgehung der Grohndler direkt von den Produzenten, aber auch gegenber den Grohndlern erzielten sie auf Grund ihrer Marktmacht gnstigere Preise. Darber hinaus hatten die groen Ketten auch Effizienzvorteile durch die zentralisierte Abwicklung und qualifiziertes Management. Diese Vorteile konnten die kleinen Apotheken durch die Nutzung von ECONOMOST weitgehend kompensieren. Die kleinen Apotheken verloren zwar weiter Marktanteile, aber weitaus weniger, als dies Mitte der 70er-Jahre prognostiziert wurde. Fr McKesson (und die anderen Pharma-Grohndler) blieb damit ein wichtiger Kundenkreis erhalten. Darber hinaus erwies sich die elektronische Bestellung beim Grohndler auch fr die groen Ketten als attraktiv, so dass der Anteil an Waren, die direkt beim Produzenten gekauft wurden, insgesamt zurckging. Die Struktur des Grohandels hat sich in den Jahren nach der Einfhrung von ECONOMOST jedoch drastisch verndert. Die Zahl der Grohndler sank in zehn Jahren auf die Hlfte, der Marktanteil der fnf grten Hndler stieg in der gleichen Zeit von 40 auf 65%. Gleichzeitig sank die durchschnittliche Handelsspanne um fast ein Drittel, von 12,2% auf 8,5%. Dementsprechend ergaben sich in der Struktur der Branche deutliche Unterschiede. Wiesen die drei fhrenden Unternehmen 1976 noch sehr unterschiedliche strategische Positionen bezglich ihrer finanziellen Struktur, der Effizienz ihrer Distribution und ihrer Marketingaktivitten auf, waren die strategischen Positionen Mitte der 80er-Jahre sehr hnlich. Alle fhrenden Unternehmen wiesen hohe Effizienz in der Produktion und einen betrchtlichen Anteil an Fremdfinanzierung auf. McKesson selbst hat aus der Entwicklung von ECONOMOST jedoch keine nachhaltigen Wettbewerbsvorteile gegenber seinen unmittelbaren Konkurrenten gezogen. Der Marktanteil stieg zwar von 20% auf 27%, diese Erhhung ist aber auf den Aufkauf eines frheren Konkurrenten zurckzufhren, die 27% entsprechen weitgehend der Summe der frheren Marktanteile der beiden Unternehmen. Dies ist nicht zuletzt darauf zurckzufhren, dass die Konkurrenten auf die Einfhrung von ECONOMOST bald mit der Entwicklung hnlicher Systeme antworteten. Die Umstellung zwischen den einzelnen Systemen, wenn eine Apotheke von einem Grohndler zu einem anderen wechselt, kann in einem Tag durchgefhrt werden. Die meisten Grohndler bieten fr den Wechsel zu ihrem System Untersttzungen und bernehmen auch die anfallenden Kosten.
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Vorteile McKesson
Bestelldaten elektronisch verfgbar geringerer Personalaufwand bei der Bestellannahme Optimierung interner Ablufe Optimierung Transportwesen
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1976 begann die Girard Bank in Philadelphia mit dem Aufbau ihres Netzwerkes von Geldausgabeautomaten unter dem Namen "GEORGE". Girard war zu diesem Zeitpunkt die drittgrte Bank in Philadelphia und war insbesondere im Privatkundenbereich sehr stark vertreten. Der Aufbau eines Netzwerkes von Geldausgabeautomaten in Verbindung mit der bestehenden groen Zahl von Filialen sollte diese Position weiter strken und wurde auch intensiv beworben. Die Philadelphia National Bank war zu dieser Zeit die zweitgrte Bank in Philadelphia. Ihre Strken lagen vor allem im Bereich der Geschftskunden, verglichen mit Girard hatte diese Bank ein weitaus kleineres Netz von Filialen. Der Aufbau und die aggresive Vermarktung von GEORGE wurde von Philadelphia National Bank als ernste Bedrohung angesehen, da befrchtet wurde, dass sich ein grerer Verlust von Privatkunden an die Girard Bank langfristig auch negativ auf das Geschft mit den Firmenkunden auswirken wrde. Auf Grund der geringen Zahl von Filialen und des insgesamt geringen Privatkundengeschfts sah die Philadelphia National Bank jedoch keine Mglichkeit, alleine ein konkurrenzfhiges Netzwerk an Geldausgabeautomaten aufzubauen. Das Management von Philadelphia National beschloss daher, ein Netzwerk in Kooperation mit anderen Banken aufzubauen. Dabei wurden zunchst zwei Strategien betrachtet: 1. Der Aufbau des Netzwerks in Form eines gemeinsamen Tochterunternehmens oder eines Konsortiums, bei dem das Netzwerk im gemeinsamen Eigentum der beteiligten Banken steht 2. Der Aufbau eines Netzwerkes in alleinigem Eigentum von Philadelphia National und das Angebot an andere Banken, das Netzwerk als Dienstleistung gegen Entgelt mit zu benutzen. Auf Grund der erwarteten Schwierigkeiten beim Aufbau eines Konsortiums wurde der zweiten Strategie der Vorzug gegeben. Philadelphia National Bank begann, ein eigenes Netzwerk aufzubauen und intensiv an andere Banken zu vermarkten. Bereits bei Beginn des Netzwerkbetriebes 1979 nahmen 13 Banken teil. Das Netzwerk expandierte rasch und 1988 wurde das CashStreamNetzwerk der Mellon Bank, die zuvor Girard und damit das GEORGE-Netzwerk aufgekauft hatte, ebenfalls bernommen. MAC erlangte damit eine Monopolstellung im Groraum von Philadelphia. Inzwischen ist MAC mit 32.000 Automaten das grte Netzwerk von Geldausgabeautomaten der USA und ein Teil eines eigenstndigen Unternehmens, das im gemeinsamen Eigentum mehrerer Banken steht.
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Information Systems (IS) 1. Strategy 1.1. The Evolving Role of Information Systems and Technology in Organizations: A Strategic Perspective Creating and Sustaining Competitive Advantage with IT/IS Strategic Information Systems Strategy Tools and Techniques Cases
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