It Strategy

INTE1030 IT Strategy

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Table of Content

TABLE OF CONTENT 1

TABLE OF FIGURES 3

TABLE OF TABLES 3

ABSTRACT 4

1. INTRODUCTION 5

1.1 Organizational Information 5

1.2 Project Process 5

2. STRATEGIC ANALYSIS 6

2.1 External Analysis - Porter’s Competitive Forces Analysis 6

2.1.1 Buyer power 6

2.1.2 Supplier power 6

2.1.3 Substitution 7

2.1.4 Rivalry 7

2.1.5 Barriers to entry 8

2.2 Internal Analysis - 7S Analysis 8

2.2.1 Shared Value 8

2.2.2 Strategy 9

2.2.3 Structure 9

2.2.4 Systems 10

2.2.5 Staff 10

2.2.6 Style 10

2.2.7 Skills 10

2.3 Overall Analysis - SWOT Analysis 11

2.3.1 Strengths 11

2.3.2 Weaknesses 12

2.3.3 Opportunities 12

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2.3.4 Threats 13

3. STRATEGIC OBJECTIVES 14

3.1 BSC for business strategy 14

3.2 BSC for IT Strategy 16

3.3 Description for the two BSC 18

3.3.1 Learning 18

3.3.2 Internal 18

3.3.3 Customer 19

3.3.4 Financial 19

3.4 Overall objectives 19

4. NEEDS FOR CHANGE 21

5. IT STRATEGY DEFINITION 22

5.1 STRATEGIC DEFINITION 22

5.1.1 Expand Asia Network 22

5.1.2 Increase regional hub numbers 22

5.1.3 Lower communication costs 22

5.1.4 Capturing niche markets 23

5.1.5 Alliance with e-business and e-shopping mall 23

5.2 IT Issues 23

5.2.1 IT structure and governance 23

5.2.2 IT investment portfolio 23

5.2.3 Managing emerging IT 24

5.2.4 IT Business Alignment 24

5.2.5 IT Sourcing 25

5.2.6 IT Performance Evaluation 25

6. STRATEGY IMPLEMENTATION AND EVALUATION 26

REFERENCES 27

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Table of Figures

Figure 1: Strategy map for business strategy 15

Figure 2: Strategy map for IT strategy 17

Figure 3: Strategic technology transformation alignment 24

Table of Tables

Table 1: UPS global competitors 7

Table 2: UPS SWOT 11

Table 3: BSC for business strategy 14

Table 4: BSC for IT strategy 16

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Abstract

UPS Logistics is one of the leading logistics service providers in the world.

Participating strong market growth in Asia region, particularly, China and its long

established presence and reputation in the America market foster its strategic move to

enter the global logistics market. As an organisation that is well known for its

development and optimisation of the usage of IT, leveraging its existing operating

expertise seems to be the best practice. Yet, to operate in a global scale require

tremendous investment, particularly in IT, in order to facilitate UPS’s expertise. The

paper presents IT strategy formulation that adopts the strategic technology

transformation alignment, which starts analysing the current status of UPS by

deploying competitive forces model and 7S analysis to formulate a complete image of

SWOT as to identify its current industry position. Balance scorecard is then used to

define both its strategic business and IT objectives.

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1. Introduction

1.1 Organizational Information

UPS is a well established logistics company with recognised worldwide reputation.

The current operations of UPS are involved in various economies across the world.

They currently transport more then 50 percent of the goods in USA. UPS Logistics, in

2001, managed to deliver 3.4 billion parcels in more than 200 Countries. The

revenues were, in 2001, 27 billion US dollar and after 4 years it had increased by 15

billions dollars. (UPS 2006) In year 2005, UPS reported 1 billion dollar budget

expenditure for its IT department alone.

UPS is divided in several business unit or division. The 4 main