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Walter Schroeder Library, Milwaukee School of Engineering
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Aho, Teijo
Subjects
Information technology -- Management
Electronic commerce
Business enterprises -- United States -- Communication systems
Internet (Computer network)
Information networks
MSEM Thesis.
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Aho, Teijo
by title:
Competitive advantag...
MARC Display
Competitive advantage through virtual integration / by Teijo Aho.
by
Aho, Teijo
Subjects
Information technology -- Management
Electronic commerce
Business enterprises -- United States -- Communication systems
Internet (Computer network)
Information networks
MSEM Thesis.
Description:
107 leaves : ill. ; 29 cm.
Contents:
Advisor(s): Gene Wright.
Committee member(s): David Tietyen, Kimbel Nap.
Introduction to the economics behind information flow -- Transaction costs -- Focus on core competencies -- Metcalfe's theory -- Moore's law -- The Internet -- Flow of digital information -- Virtual integration -- The digital nervous system -- Changing technology -- Digital strategy -- Virtual integration -- Creating the network structure -- Technologies for creating the network structure -- Managing the virtual company -- Benefits of virtual integration -- Drawbacks of virtual integration -- Examples of virtual integration -- Corporate overview of ABB -- The role of business units -- Corporate network -- Laying down the groundwork -- System architecture -- Reuse strategy -- Information management -- Development guidelines -- Operational improvements -- Business benefits -- Group IS strategy -- Global IS organization -- Business applications -- Electronic commerce -- IS infrastructure -- Summary and conclusions -- Recommendations -- Glossary -- Bibliography -- Appendices
Digital technology is reducing the transaction costs of conducting business in the open market. This is due to the rapid development of computing power and the increasing usage of the Internet. Companies are finding that the Internet is providing consumers with more price transparency and easier value comparison. The Internet provides a direct link between the producer of a service or a product and its consumer. Companies that are not adding sufficient value are being cut out. Growing competition is forcing companies to focus on their core competencies and outsource that which is not, to companies that do the same. Companies can compete by operating on scale, yet the real competitive advantage comes from joining forces to produce something that is the best of everything. Virtual Integration occurs when these individual companies join resources through digital exchange of information to work on something they could not separately produce in a competitive manner. Virtual Integration lets companies combine always the right amount of the best resources available. By using digital information the companies can reduce the transaction costs of traditional outsourcing. These companies are required to share information openly in an electronic format that is understood by all participants. Information can be shared over the Internet by using networking applications such as a Virtual Private Network. ABB is a $30-billion engineering and technology company that is streamlining its internal processes to reduce in-house transaction costs. ABB uses a proprietary network backbone to connect the information flow of its business units. Currently business collaborate on joint projects but share very little information otherwise. Latest efforts include information technology and network architecture development to facilitate information reuse. ABB is setting electronic commerce as one of its next strategic priorities. ABB needs to use digital information flow to consolidate many of its internal activities to centers of excellence. The business unit level companies need to share as much information as they can with suppliers and customers.
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Walter Schroeder Library
Master's Theses
AC805 .A42 1999
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