Page 51 - DMGT505_MANAGEMENT_INFORMATION_SYSTEM

Management Information Systems

Notes 3.3 Leveraging Technology in the Value Chain

At the business level the most common analytic tool is value chain analysis. The value chain
model highlights specific activities in the business where competitive strategies can be best
applied and where information systems are most likely to have a strategic impact. Primary
activities are activities most directly related to the production and distribution of a firm’s
products or services. It include inbound logistics, operations, outbound logistics, sales and
marketing, and service. Supporting activities make the delivery of a firm’s primary activities
possible. Consist of the organization’s infrastructure, human resources, technology, and
procurement.
Figure 3.2: The Value Chain

Be better than the competition. That’s the mantra of most companies that are serious about
winning the game. Areas of the organization most affected by leveraging technology are
producing the product, getting it to the stores, and making the customer happy. Think of all the
activities that go into getting the Cybernuts candy bar made, from procuring raw materials to
actual production. Then consider how the candy bar gets from the factory to the store shelves.
And what about all those product commercials? These are primary activities. Just as important
are support activities: Human Resources, Accounting, Finance. These functions support the
primary functions of Production, Shipping, and Sales and Marketing. The value chain model
below will help an organization focus on these activities and determine which are critical to its
success.

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