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52 Part One Organizations, Management, and the Networked Enterprise

The Interactive Session on Technology describes some of the typical tech-
nologies used in computer-based information systems today. UPS invests heav-
ily in information systems technology to make its business more efficient and
customer oriented. It uses an array of information technologies, including bar
code scanning systems, wireless networks, large mainframe computers, hand-
held computers, the Internet, and many different pieces of software for track-
ing packages, calculating fees, maintaining customer accounts, and managing
logistics.
Let’s identify the organization, management, and technology elements in
the UPS package tracking system we have just described. The organization
element anchors the package tracking system in UPS’s sales and production
functions (the main product of UPS is a service—package delivery). It speci-
fies the required procedures for identifying packages with both sender and
recipient information, taking inventory, tracking the packages en route, and
providing package status reports for UPS customers and customer service
representatives.
The system must also provide information to satisfy the needs of managers
and workers. UPS drivers need to be trained in both package pickup and deliv-
ery procedures and in how to use the package tracking system so that they can
work efficiently and effectively. UPS customers may need some training to use
UPS in-house package tracking software or the UPS Web site.
UPS’s management is responsible for monitoring service levels and costs
and for promoting the company’s strategy of combining low cost and superior
service. Management decided to use computer systems to increase the ease
of sending a package using UPS and of checking its delivery status, thereby
reducing delivery costs and increasing sales revenues.
The technology supporting this system consists of handheld computers, bar
code scanners, desktop computers, wired and wireless communications networks,
UPS’s data center, storage technology for the package delivery data, UPS in-house
package tracking software, and software to access the World Wide Web. The result
is an information system solution to the business challenge of providing a high
level of service with low prices in the face of mounting competition.

IT ISN’T JUST TECHNOLOGY: A BUSINESS

PERSPECTIVE ON INFORMATION SYSTEMS
Managers and business firms invest in information technology and systems
because they provide real economic value to the business. The decision to build
or maintain an information system assumes that the returns on this invest-
ment will be superior to other investments in buildings, machines, or other
assets. These superior returns will be expressed as increases in productivity,
as increases in revenues (which will increase the firm’s stock market value),
or perhaps as superior long-term strategic positioning of the firm in certain
markets (which produce superior revenues in the future).
We can see that from a business perspective, an information system is an
important instrument for creating value for the firm. Information systems
enable the firm to increase its revenue or decrease its costs by providing
information that helps managers make better decisions or that improves the
execution of business processes. For example, the information system for
analyzing supermarket checkout data illustrated in Figure 1.3 on page 46 can
increase firm profitability by helping managers make better decisions as to
which products to stock and promote in retail supermarkets.

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