1. Effective use of IS/IT (Continued) Strategic Role of Information Systems Dr. V.T. Raja Oregon State University

2. Class Participation Exercise Examples –Ford Motor Company –1-800-Flowers

3. Business Process Reengineering (BPR) BPR - Radical redesign of business process(es) to achieve dramatic improvements in measures of performance such as quality, cost, speed, and services that facilitate gaining competitive advantage or enhancing/changing business strategy. IT/IS facilitates BPR –Examples IBM Credit Corporation Ford

4. BPR - Characteristics Advantages –Cycle time reduction –Effective communication –Restructuring organization Single point of contact for customer Hierarchical – Flattened – Networked organizations

5. BPR - Characteristics Disadvantages –Laying off employees Voluntary retirement –Retraining employees Retraining costs –Transfer of employees

6. Some Characteristics of a Virtual Organizations An organization composed of several business partners sharing costs and resources for the purpose of producing a product or service Each partner creates a portion of a product or service, in an area in which they have special advantage such as expertise or low cost Example: Flower Company

7. Example - Virtual Organization (VO) Customer VO - Flower Company Flower Supplier Amex Master Card FedEx 1. Places Order - Web Sends monthly bill 2. E - validates payment 3. Passes e- order 5. Accepts Order 4. E-acceptance Order 6. Sends pick up info electronically 7. Picks up order 8. Delivers flowers Makes e-payment Makes e-payment Makes e-payment

8. Some Characteristics of a Virtual Organization Excellence - All star winning team Resource Utilization - Competitive advantage Opportunism – Making use of market opportunities Lack of borders - Redefines traditional boundaries Adaptability – to change Trust - Essential between/among business partners Technology - Basic ingredient Resources of business partners remain in their original locations but are integrated via information systems.