Question

Porter's value chain identifies primary and support activities. How could you use his value chain as a tool for the development of information systems in a large corporation?

Answer 1

In general, Information system is used by the organisations to collect data regarding different functional departments from various sources, processes it as per the needs of the organisation and at last provides different reports as per the requirement of the management.

Porter's value chain identifies mainly two types of activities in an organization. They are as follows:-

a) Primary activities

b) Secondary activities

Primary activities consists of following activities

1) Inbound logistics

2) production

3) Outbound logistics

4) Marketing

5) Service

Secondary activities consists of following activities

1) Organization infrastructure

2) Human Resource management

3) Technology development

The use of information system in Porter's value chain analysis regarding different activities are as follows:-

a) For Inbound logistics, information system can be used to collect data about diffetent raw material producers, the rates at which they provide our current requirement of material etc...

b) For Production department information system can be used to know how much production is budgeted, how much production is actually produced, to compare previous reports with current results,

c) For out bound logistics information system is used to collect store and process database regarding to sales, credit sales, customer details, orders received, discounts to be givento some customers etc...

d) For marketing information system can be used to collect data regarding demand forour product in different markets, sales target, to know feed back about our product directly from the consumer etc...

e) For service regarding warranty services, insurance services, reparing services can be done through informationsystem by recording all data regarding customers, products purchased, waranty of the product or any guarantee to the products. By processing all the data recorded by the information system management can work very fastly and effectively compared with early system.

For supporting activities also information system can be used in infrastructure for planning its future restructuring as per the upcoming requirements, Collection of data regarding employees, their salary benefits, techical and non technical employees, joining date and retirement date, retirement benefits to be given to the current retiring employees etc..and also for the technology development information system used to know the developing technologies in the world to produce more quality products at low cost etc..

The use of information system has completely changed the present day business organization with entry of computers and Internet in the management of an organisation.