BCIS 401 Information Systems for Management

Electronic Commerce

BCIS 401Information Systems for Management

Value Chain Models

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Physical Value Chain Model

• A series of value adding activities connecting a company’s supply side to its demand side

• Analysis of the PVC has allowed managers to redesign internal & external Processes to improve efficiency and effectiveness

• VCM treats information as a supporting element of the value adding process, not as a source of value itself

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Virtual Value Chain Model

• VVC exists in the market space• Value-adding process unique to the information

world are required to turn raw information into new market space services and products

• Creating value in any stage of a VVC involves a sequence of five activities– Gathering, organizing, selecting, synthesizing and

distributing information

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Mixing the Physical & Virtual

• Companies that do business in both the market place and the market space exploit both the PVC and VVC

• To be successful these chains must be managed distinctly but in concert

• Companies that adopt value-adding information processes generally do so in three stages

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Stages of Adoption of Value-Adding Information Process

• Visibility

• Mirroring Capability

• Value matrix

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Visibility

• Companies acquire an ability to “see”

physical operations more effectively

through information

• Large scale IS used by managers to coordinate activities in their PVC

• Foundation laid for a VVC

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Mirroring Capability

• Companies substitute virtual activities for

physical ones

• Companies begin to create a parallel value chain in the market space

• Establishing space-based relationships allows companies to extract value from the space

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Value Matrix

• Manager’s draw on information in their VVC to deliver value to customers in new ways

• This is accomplished by applying the generic value adding activities to their VVC and thereby exploit the value matrix

Physical Value Chain

Virtual Value Chain

Gather

Organize

Select

Synthesize

Distribute

New markets

Value

Matrix

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Marshall Industries

Junction Box Model

Level 1 Junction Box

Clean conduit for transactions

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Level 1

• Streamlining for cost, efficiency, and basic reliability

• Quality Order Booking, Resell App. (QOBRA)

• Automated Shipping and Receiving System (AS/RS)

• Aimed at supporting basic operational capabilities.

Level 2 Junction Box

Internal Integration

Intelligently connecting the Insides to better connect the Outside.

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Level 2

• Marshall Net - The Intranet– Automates Routine Processing– Frees up employees to provide value to

customers– Supports approximately 400 field sales

employees

Level 3 Junction Box

Empowering the Outsides to more intelligently

connect to the Insides through multiple modes

of service.

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Level 3

• Redesigning Business Processes to provide 24x7 customer service

• Marshall on the Internet– Dynamic Web site– Order tracking via UPS, on Marshall’s site

• EDI

• Connect to Marshall’s engineers on-line

Level 4 Junction Box

Customizing the connections to the

Outside for added value.

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Level 4

• Establish Extranet– PartnerNet - Draws visits from ~1,300

customers & suppliers daily– Integrated with QOBRA, DRP, sales force

applications– Enables integration of complete purchasing

cycle

• Market Intelligence System– MAP - Marshall Account Profile Planner

Level 5 Junction Box

Leveraging knowledge in the Insides and Outsides

for value innovation

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Level 5

• DRP• MAP

• Electronic Design Centers– Provides design information & simulation

ability to customers

Level 6 Junction Box

Prototyping future opportunities for value

innovation

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Level 6

• Be Proactive in planning its future in the face of the accelerating rate of new ITs

• Build IT platforms that serve to prototype the future. Marshall’s Strategic R&D– Net Seminar - Brings together Suppliers &

Customers to design new products– Education news and entertainment network