Strategic Information Systems

Strategic Information Systems Vision

What Is A Vision? • It is a self image that reveals what the business wants to look like over the future. • Vision must be concrete and easily understood.

Why A Vision? A C.E.O can do only a limited amount of things to sustain competitive success. Important to draw a road map from where company is today to some imagined future. Then reinforce this by explaining how to get there. You want to motivate employees within the organization to buy into the new direction dictated by the vision.

Developing The Right Vision 3 Steps • Define The Business Environment. • Build A Company Vision • Turn The Vision Into A Plan

Vision and Information Systems Invest Vision Asset Save Money Applications Networks Strategic Expense Tools Tactical

Jack F. Welch,Jr., Chairman and CEO • “Grocery Store” • Formalities are not very popular • Summer Sessions • Surprise

General Electric • Mission & Vision • Mission:To create intelligence throughout the business supply chains of our customers around the globe by combining Six Sigma process disciplines with innovative electronic commerce technologies. • Vision:Be the world's largest provider of electronic commerce solutions that create intelligence for business supply chains.

Six Sigma Vision • Critical to Quality: Attributes most important to the customer • Defect: Failing to deliver what the customer wants • Process Capability: What your process can deliver • Variation: What the customer see and feels • Stable Operations: Ensuring consistent, predictable processes to improve what the customer sees and feels • Design for Six Sigma: Designing to meet customer needs and process capability

GE’s e-Volution of 2000 • MakeSee how the digitization of our internal processes helped GE gain key competitive advantages. • BuyLearn how GE applied e-Business strategies to dramatically improve sourcing operations and purchasing efforts. • SellExplore GE's success in digitizing online sales processes and transitioning customers to Web-based purchasing and service options.

e-Business Facts • Make-side Facts Current implementation of the digitization of internal processes has helped us identify approximately $1.5 billion in potential cost-out savings for 2001. Make-side activity encompasses more than $20 billion in base costs. GE has identified 20%-30% cost-out opportunity using Make-side e-Enablement. • Buy-side Facts Although GE businesses did only minimal online auctioning until mid-2000, we closed the year with more than $6 billion worth of goods and services auctioned online. The close-of-auction price deflation for GE in 2000 was approximately 16%. The close-of-transaction price was about 8% (providing $480 million of annualized savings). Targeting 30% of overall buying online in 2001. • Sell-Side Facts Online transactions have grown from basically $0 in 1998 to $1 billion in 1999 and over $7 billion in 2000. In 2001 we anticipate 15% of our total revenue will come from online sales.

http://aoltimewarner.com A corporation made up of many entities that wants “… to be the most valuable company in the world”

TIMELINE: TIME, WARNER, AOL • 1918 – Time Magazine idea conceived • 1918 – BrothersWarner open first West Coast studio • 1923 – Time’s first issue published • 1927 – Warner Bros. releases first synchronized talking movie • 1985 – Steve Case & Jim Kimsey conceive new co. Quantum Computer Services – no WWWeb. • 1989 – Time acquires Warner to form Time Warner • 1995 – WB Network debuts • 1996 – Time Warner & Turner Broadcast Systems merge • 1998 – AOL acquires Compuserve and ICQ • 2000 – AOL reaches 27 million members • 2001 – AOL & Time Warner merge 2001 Merger 1989 Merger

AOL Time Warner Corporate Executives (AND Forces Behind The Merger) • Gerald M. Levin • Chief Executive Officer • Graduate of U. of Pennsylvania Law School 1963 & Graduate of Haverford College in 1960 • Former Chairman and Chief Executive Officer of Time Warner Inc. • Has been with the company since joining Time Inc. (HBO) in 1972 • Leading architect of the historic merger of AOL Time Warner in 2001 • Prime Mover of Time Inc, and Warner Communications merger in 1990 • Prime Mover of Time Warner’s merger with Tuner Broadcasting Systems 1996 • Recently resigned from primary duty of placing management structure regarding company’s growth • Steven M. Case • Chairman of The Board • Graduate of Williams College with a degree in Political Science • Former Chairman and Chief Executive Officer of America Online Inc. • Co-founded AOL in 1985 • Prime force behind merger of AOL and Time Warner Inc., in 2001 • Currently, Actively involved in leading and building AOL Time Warner with particular focus on technological developments, policy initiatives and strategic investments that are driving the GLOBAL expansion of the interactive medium. • Founded Case Foundation which has supported programs like “PowerUp” – technology centers for young people in inner cities and rural areas designed to help expand digital opportunity

Evolution of a Vision AOL’s Vision “To build a global medium as central to people’s lives as the telephone or television – and even more valuable.” Time Warner’s Vision To build a global medium central to people’s lives that entertains and allows for communication. AOL/ TIME WARNER’s VISION “To transform how people throughout the world acquire information, are entertained, purchase a full range of goods and services and communicate with each other across international boundaries.”

AOL TIME WARNERS VISION • “To transform how people throughout the world acquire information, are entertained, purchase a full range of goods and services and communicate with each other across international boundaries.” • The Vision is anchored in two fundamental beliefs and anchored by a strong foundation: • Belief #1 - New deliver systems enabled by technology will alter consumer habits and relationships and, as a result, their business dramatically. Thus, boundaries between products, business, and services blur - CONVERGANCE • Belief #2 - Putting all the pieces together that relate to this convergence of products and services will enable them not only to better manage, but to drive their own destiny. • Anchor – A foundation that begins with a unique combination of technology, content and an expanding relationship with consumers throughout the world.

MISSION STATEMENT (7 Goals Needed To Achieve This Vision) • To become the world’s most respected and valued company by connecting, informing and entertaining people everywhere in innovative ways that will enrich their lives. • Values: • Creativity – We thrive on innovation and originality – encouraging risk-taking and divergent voices. • Customer Focus – We value our customers – putting their needs and interests at the center of everything we do. CUSTOMER SERVICE AS A DRIVER • Agility – We move quickly – embracing change and seizing new opportunities. • Teamwork – We treat one another with respect – creating value by working together within and across our business. • Integrity – We rigorously uphold editorial independence and artistic expression – earning the trust of our readers, viewers, listeners, members and subscribers. • Diversity – We attract and develop the world’s best talent – seeking to include the broadest range of people and perspectives. • Responsibility – We work t improve our communities – taking pride in serving the public interest as well as the interests of our shareholders.

CHALLENGES FACING AOL • Creativity – An abundance of creativity, but it’s not even flow. Employees are NOT taken seriously and allowed to become an integral part of the creative process. • Customer Focus - Not a problem. AOL and Time Warner before the merger were all about customer service. Everything they respectively built, stated, created and affected was based upon the consumer. • Agility – Not a problem. AOL Time Warner is at the forefront because they’re the first ones in and the last ones out. • Teamwork. – It’s not there yet. Too many divisions within the company. Covergence is only at it’s inception phase. Manager Top heavy. Too many walls and boundaries. • Integrity - • Diversity – Not there yet. High turnover rate. • Responsibility – Right on! Foundations created for the community. They give back and do so in a big way… Creates company consumer awareness

INFORMATION TECHNOLOGY • Need to create communication lines that are easy to use and capable of transmitting large amounts of information quickly and efficiently not only for the customers sake but within the company in an effort to “converge” • Its essential that AOL constantly be on the cutting edge of Information Technological advances, products and services. • It’s the tool needed to move them towards their shared Vision plan. • Competition is fierce and as the company expands into new markets both foreign and domestically, IT will play a much more important role within the company • AOL is in it’s most critical stage – new merger • Look at other ways to break down communication problems with IT • Currently AOLTW uses email as it’s main source of communication • They expanded on that recently by converting all entities email programs to an AOL’s email format • Securitized – passcode changes every minute • In so doing, employees can now access their own and company related email from home and on the road without the need of a company laptop computer

VISION ACHIEVEMENTS IN 2001 • Strengthened and expanded on their single most important asset – their direct relationship with the consumer. • On the creative side, they developed extraordinary new movie franchises, and the music business was able to increase it’s market share • They extended the penetration of their broadband and digital technologies and set the stage for an increasingly wide array of new offerings like high-speed Internet services and Video on demand • They expanded in key overseas markets, particularly Europe • Acquired IPC media, one of the leading publishers in Europe • Undertook a a broad spectrum of successful cross-divisional marketing initiatives. • Movie releases are promoted via the internet on AOL, HBO sites are created to enhance and promote special and coming attractions, Warner Music promotes HBO programming like REVERB • Networks extended their leadership, but their response to the events of September 11th demonstrated the increasing importance of our corporate mission to inform and connect. • Millions of people tuned into CNN and our local news channels. • Magazines • Internet • Companies financial results for 2001 were strong given the current environment

Federal Express’ Vision Created by visionary Frederick W. Smith

Federal Express Early History • Product concept introduced in 1965 by Smith in a term paper at Yale as a necessity for an airfreight system of delivery to accommodate time-sensitive shipments such as medicine, computer parts and electronics. • Incorporated in 1971 and began operations on April 17,1973 with 14 small aircraft from Memphis International Airport. • Deregulation of air cargo in 1977 brought bigger planes such as Boeing 727 and MD DC10s to the fleet • Federal Express makes first profit in 1975

Federal Express andThe Vision Process

Step One:Define the Business Environment • Smith’s genius came in the ability to position himself in an already established market of carriers using passenger routes • Smith was determined to make his system more economical and faster using a fleet of aircraft dedicated to the transport of packages only

Step Two: Build a Company Vision • Become the most economical and fastest airfreight distribution system • Be the industry leader in cost and product innovations using information technology • Make Federal Express a global organization

Step Three: Turn Vision Into PlanInternational Expansion • Acquisition of Tiger International Inc in Feb. 1989 made them the world’s largest full-service all-cargo airline • Tiger International acquisition positioned Fed Ex in 21 countries, including facilities-wise and flying routes • In 1995 acquired Evergreen International Airlines for sole US cargo carrier rights to routes in China • Today Fed Ex serves more than 200 countries in Africa, Asia, Australia, Europe, North and South America.

Vision into PlanFed Ex and IT • April 2000:FedEx introduces real-time packing tracking with wireless LAN equipment, NORCOM satellite network BellSouth wireless networks and bar code scanners • Fall 2001: FedEx begins using Clarify CRM from Nor-tel Networks to build and maintain customer profiles and route calls to the best customer service rep for their particular problem • Jan 2002: Using Deploy Solutions, Fed Ex reduced candidate application time by over 50% with an online application via Web-based browser kiosks, which were interfaced with the company’s main HRIS (PRISM)

FedEx Awardsin Information Technology • Logistics Management and Distribution Report “Quest for Quality” Award: Best Air Carrier (2000) • Wal-Mart Stores,Inc. “Carrier of the Year” (1999,2000) • Fortune: “100 Best Companies to Work for in America” (1998,1999,2000) • Fortune: “50 Best Companies for Asians, Blacks, and Hispanics (1998,1999) • Working Woman: “100 Best Companies for Working Mothers” (1998) • Compaq Computer “International Supplier of the Year” (2000)

FedEx FactsDid You Know? • FedEx handles approximately 3.3 million packages and documents each night • In a 24-hour period, FedEx planes travel almost one-half million miles • FedEx couriers log 2.5 million miles a day (the equivalent of 100 trips around the earth) • FedEx has a fleet of 642 aircraft and more than 45,000 vehicles • In 1994 Federal Express changed their name to FedEx • In 2000, it extended itself to include FedEx Express,FedEx Ground, FedEx Freight, FedEx Custom Critical and FedEx Trade Networks

Strategic Information Systems