to Gain Competitive Advantage
Sar on K. Yef t a1, Indr a Gamayant o2
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St af Pengaj ar Jur usan S1 Si st em Inf or masi Fakul t as Teknol ogi Inf or masi
Uni ver si t as Kr i st en Mar anat ha
Jl . Pr of . Dr g. Sur i a Sumant r i No. 65, Bandung 40164 Emai l : sar on. ky@eng. mar anat ha. edu
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Jl . Di pat i Ukur 80-84 Bandung 40132 Emai l : gama@i t hb. ac. i d
Abst rak
E-busi ness bukanl ah i su yang bar u. Keber adaannya t el ah mendor ong or gani sasi t r adi si onal ber ubah menj adi or gani sasi vi r t ual . Wal aupun demi ki an, menur ut penul i s, t opi k i ni masi h memi l i ki i su pent i ng yang har us di ekspl or asi kar ena car a pandang yang ber beda mengenai t opi k i ni akan member i kan hasi l yang ber beda pul a. Hasi l yang ber beda t er sebut dapat di i mpl ement asi kan unt uk ber bagai si t uasi yang ber beda, sesuai hasi l peni l ai an t i m manaj emen. Or gani sasi har us memi ki r kan pemahaman pembuat an dan ut i l i t as knowl edge ser t a memper t i mbangkan kedua f akt or yang t ak dapat di pi sahkan t er sebut sebagai i nf r ast r ukt ur or gani sasi unt uk memaksi mal kan unj uk ker j a or gani sasi . Knowl edge management adal ah sebuah car a unt uk meni ngkat kan kapabi l i t as or gani sasi dal am mendayagunakan i nf or masi unt uk meni ngkat kan ef i si ensi dan pr odukt i vi t as. Agar dapat memahami dan mengekspl or asi l ebi h j auh car a knowl edge management membant u or gani sasi vi r t ual , penul i s mengumpul kan ber bagai i nf or masi dar i per pust akaan, dat abase onl i ne, buku-buku, dan hal aman web. Sel anj ut nya, unt uk dapat l ebi h menggambar kan keunt ungan-keunt ungan yang dapat di capai , ancaman, dan t ant angan yang di hadapi or gani sasi , penul i s menggunakan sebuah st udi kasus. Kasus t er sebut akan di gunakan sebagai pembandi ng dan pendukung t eor i , j uga unt uk menggambar kan si t uasi yang sesungguhnya dal am duni a nyat a.
Kat a kunci: Or gani sasi vi r t ual , Inf r ast r ukt ur or gani sasi , Ef i si ensi
1. Introduction
mechanism. Buyers and sel l ers communicat e via Int ernet al l owing t he product s t o be bought and sol d over comput er net works. The principl e concept is t hat t he product s are purchased and paid f or over t he Int ernet and dist ribut ed by l ogist ics carriers t o t he buyers’ addresses. That onl ine buying, sel l ing, and paying is an int egral part of e-business.
The evol ut ion of Int ernet is growing rapidl y because more peopl e use Int ernet t o seek inf ormat ion (see Figure 1). From Turner’ s (2000, p. 8)
point of view, t he driving f act ors of t he rise of t he Int ernet are: reduced cost of t he t el ephone cal l s; t he spread of PC; t he spread of open st andard; and t he devel opment of onl ine services. Because of t he swif t dif f usion of t he Int ernet t echnol ogy, Int ernet has made a big change in t he business environment gl obal l y creat ing a new market f orm t o t rade f rom t radit ional business int o e-business t rade or virt ual organizat ions (see Figure 2a and Figure 2b). According t o McKie (2001, p. 69), Int ernet al so pl ays a
signif icant rol e as an int ermediary f or B2B (business t o business) and B2C (business t o consumer) in a way t hat Int ernet disint er mediat es t radit ional B2B and B2C rel at ionships t hen t he suppl y chains are reint ermediat ed by promot ing new t ypes of virt ual int ermediaries t hat rel y on it . Int ernet is connect ing businesses t o t he cust omers, part ners, suppl iers, and al so compet it ors.
Figure. 1. Int ernet Growt h Worldwide
Figure. 2a T radit ional Business
Figure. 2b. E-Business
Sour ce: Far r el l , et al . , 2001, ‘ E-busi ness@wor k’ , p. 3-4
2. The Advantages of E-business
According t o Amor (2000, p. 13), t he st rengt hs of e-business depend on t he st rengt hs on t he Int ernet , which are t he inf rast ruct ure can be expanded in t he f ut ure, t he avail abil it y of access f or 24 hours everyday and l ow cost as wel l . However what Amor want s t o show is t hat how Int ernet can change t he t opol ogy of business. Amor (2000, p. 14) reckons t hat t here are seven advant ages t hat can be obt ained by t he e-business organizat ions (see
Figure 3).
Delivery/Shipping
Customer sales support
Customer
Clicks and mortar vendor
Banking/Shopping /Cart/Validation
Supplier or Service Partner
Warehouse delivery agent
Web Shop E-Business
Sales agent or vendor
Bank, outsourcers
Customer Warehouse or
Figure. 3. Advant ages of E-Business
Sour ce: Amor , D. , 2000, ‘ The E-busi ness Revol ut i on’ , p. 14
3. Knowledge Management Implementation
Organizat ions shoul d be concerned in underst anding of knowl edge ut il izat ion and creat ion and consider t he t wo inseparabl e f act ors as an organizat ional inf rast ruct ure t o maximize t he organizat ional perf ormance. According t o Dut rénit (2000, p. 35), t he process of knowl edge creat ion is:
‘…t he cent er of at t ent i on and i ssues about t he management of knowl edge ar e pl ayi ng an i ncr easi ngl y i mpor t ant r ol e i n t he expl anat i on of t he ef f ect i veness of t hi s pr ocess’
Furt hermore, t he use of knowl edge management f acil it at es t he process of creat ion and enhancement of knowl edge f or t he devel opment of st rat egic t echnol ogical capabil it ies.
According t o t he American Product ivit y and Qual it y Cent er (1996, avail abl e at : ht t p: / / www. st ore. apqc. org/ report s/ Summary/ know-mng. pdf), knowl edge management is a set of st rat egy t o acquire t he right knowl edge t o t he right peopl e at t he right t ime and hel p t he individual s or groups t o share and use t he inf ormat ion int o act ion in a way t o enhance organizat ional achievement . Moreover, knowl edge management is a compl icat ed process t hat shoul d be reinf orced by a robust f oundat ion of enabl ers – st rat egy and l eadership, cul t ure, measurement , and t echnol ogy. Each enabl er shoul d be al igned t o generat e t he knowl edge process – procurement , present at ion, t ransf er, ut il izat ion, and removal (see Figure 4). To obt ain knowl edge, organizat ions shoul d be agil e in bal ancing t he
knowl edge management el ement s – peopl e (cul t ure), processes (cont ent ), and t echnol ogy. Abel l and Oxbrow (2001, p. 37) reckon t hat t hose el ement s have f ormed a knowl edge management phil osophy – t o manage t he knowl edge bal ance which f urt her det ermines an organizat ion and it s rel at ionship in t he market (see Figure 5).
Advantages of e-business
1. Gl obal accessi bi l i t y and sal es r each. Businesses can expand t heir cust omer base gl obal l y and even t heir product l ine.
2. Cl oser r el at i onshi ps. B2B sel lers shoul d be abl e t o const ruct cl ose rel at ionship.
3. Fr ee sampl er s. Product s can be sampl ed via t he Web quickly, easil y, and f ree of charge. 4. Reduced cost s. Businesses can minimize t he cost l y product ion by dynamical l y adj ust ing
prices.
5. Medi a br eaks. The Int ernet reduces t he number of media breaks which are needed t o t ransf er inf ormat ion.
6. Ti me t o mar ket . Short er t ime t o market and f ast er response t ime t o changing and compet it ive market demands.
Figure 6 Knowledge Management Advant ages
Sour ce: Raddi ng, 1998, Knowl edge Management , p. 60-61
5. Knowledge Management Benefits Tree
According t o Skyrme (2002, p. 1), t he use of t he benef it s t ree is t o show int er-correl at ions bet ween dif f erent t ypes of benef it . The use of t he benef it s t ree is import ant f or senior execut ives bef ore t hey invest because t he benef it s t ree wil l apparent l y describe an expl anat ion of t he bot t om l ine benef it s of knowl edge management . Commonl y, a knowl edge init iat ive is a base pl an where t he cost is obvious, but t he benef it s are dispersed int o t he organizat ion. A benef it s t ree connect s t he immediat el y obvious benef it s, t hrough a series of ways t o t hose underst ood by senior execut ives (see Figure 7).
Knowledge management advantages
1. Prevent ion of knowl edge l oss – enabl es an organizat ion t o ret ain crit ical expert ise and prevent crit ical knowl edge l oss resul t ing f rom ret irement , downsizing, empl oyee depart ures, et c.
2. Improved decision making – decisions are made f ast er wit h great er qual it y and al so can be made at a l ower l evel in t he organizat ion.
3. Adapt abil it y and f l exibil it y – st af f s can work in cross-f unct i onal sit uat ions and t he organizat ion i mproves empl oyee moral e.
4. Compet it ive advant age – enabl es t he organi zat ions t o f ul l y underst and it s cust omers, prospect s, market , and t he compet it ion, t hereby enabl ing t he ident if icat ion of compet it ive gaps and opport unit ies.
5. Asset devel opment – improves t he organizat ion’ s abil it y t o capit al ize on l egal prot ect ion f or int el l ect ual propert y.
6. Product improvement – val ue of product s is increased in direct proport ion t o t he degree and qual it y of knowl edge in t he product .
7. Cust omer management – enabl es organizat ions t o sharpen cust omer f ocus and service. Increased cust omer knowl edge expedit es response t o cust omer queries, suggest ions, & compl aint s. It al so ensures t he consist ency and qual it y when servicing cust omers.
8. Leverages invest ment s in human capit al – organi zat ions can bet t er l everage t heir invest ment in hiring and t raining workers such as t he abil it y t o share l essons l earned, document
Figure. 7 Benef it s T ree
Sour ce: Skyr me, 2002, KM Benef i t s Tr ee
6. Information and Communications Technology (ICT)
The devel opment of ICT has produced opport unit ies and chal l enges. According t o Abel l and Oxbrow (2001, p. 52):
Earl y appl icat ions of t echnol ogy of f ered t he prospect of increased product ion and l ess rel iance on human. The int egrat ion of communicat ions and inf ormat ion t echnol ogy int roduces opport unit ies t o operat e in new market s, change ways of working, del iver dif f erent product s, and maybe t o devel op business rel at ionships wit h a variet y of suppl iers. ICT enabl es f l exibil it y, al l owing inf ormat ion t o be exchanged across geographical and t ime barriers. Virt ual organizat ions, mobil e work f orces, and innovat ive part nerships have al l been dif f used by ICT. ICT al so brings new probl ems, f or exampl e, t echnical direct ors and t echnical st af f argue t o ut il ize a compat ibl e IT pl at f orms and sof t ware appl icat ions t o enhance f ast er and cheaper communicat ion.
7. Virtual Organizations
ICT has made a new f orm of business named virt ual organizat ions. Skyrme (1999, p. 1) has def ined t he virt ual organizat ion as t he organizat ion dif f used geographical l y and organizat ional work is dist ribut ed t hroughout el ect ronic communicat ions. Many smal l er organizat ions or even st art -up companies are now concerning about t he advant ages of becoming or maybe as a part of a virt ual organizat ion, which can give t hem t he benef it s knowl edge in peopl e, peopl e in an organizat ion is considered as t he most val uabl e asset because peopl e act as t he mot ivat or t o invent innovat ive ideas and generat e t he work process. Third, t he knowl edge in process can be il l ust rat ed as t he st ruct ure – vert ical or horizont al – of t he organizat ion, t he way t he empl oyees work t oget her in an compl ex sit uat ion, and if t he organizat ion has a f l exibl e management t hen can be wel l adapt ed t o t he dynamic of changes, because no mat t er what changes wil l appl y.
9. The Success of Virtual Organizations
cont inue t o become un-t et hered, of t en wit hout warning t o t he ent erprise and it s IT inf rast ruct ure, it is increasingl y t he responsibil it y of t he ent erprise t o provide t he educat ion and change management necessary f or t he empl oyee's success in a virt ual environment . IT execut ives shoul d ensure t hat t he appropriat e educat ion and compet encies are devel oped among it s core st af f t o l everage t he f ul l pot ent ial of a successf ul virt ual t eam (Ader, M. , 2003).
Successf ul virt ual t eams invol ve a st rong combinat ion of peopl e, process, and t echnol ogy. For peopl e t o work seaml essl y across boundaries, dist ance, and t ime, col l aborat ion t ool s and services t o cat al yze product ivit y must be readil y avail abl e. IT execut ives shoul d eval uat e t ool s f rom emerging prof essional services aut omat ion (PSA) vendors, proj ect management and col l aborat ion pl ayers, as wel l as l eading audio and video st reaming t echnol ogy t hat can support t he act ivit ies of a virt ual t eam (Hasel korn, M. , 1998).
10. Challenge and Solution in Knowledge Management
Al t hough knowl edge Management can become a good st rat egy in many organizat ions t o achieve compet it ive advant age in compet ing wit h ot hers, it al so present s signif icant chal l enges t o t he organizat ions especial l y t o managers and IT prof essional s. The compl exit y in def ining t he most suit abl e knowl edge management model , ref ining inf ormat ion, choosing t he most appropriat e t echnol ogy are t he exampl es of issues t hat f ace by organizat ions. However t hough t he probl ems are a l ot , it doesn’ t mean al l t he organizat ions f ace t he same issues. The issue wil l depend on t he organizat ions t hemsel ves, what is t he core business and how t he organizat ion runs t he act ivit ies (KMWorl d, 2002).
11. Distributing Information
How t o dist ribut e and del iver t he inf ormat ion is one of t he issues which have impact organizat ion great l y. Spreading t he inf ormat ion among workers in organizat ion, t o ot her branches of organizat ions and col l aborat ed organizat ions can det ermine t he f ait h of organizat ion it sel f . Speed of dist ribut ion and avail abil it y of inf ormat ion are t he t hings t hat organizat ions t ry t o sust ain and achi eve. Bef ore considering a way of dist ribut ing t he inf ormat ion, organizat ions have t o underst and cl earl y f irst , what kind of inf ormat ion t hose organizat ions have. According t o Vice President of Hummingbird Lt d. , Pet er Audit ore (KMWorl d, 2002), t here are t hree t ypes of inf ormat ion in an organizat ion, which are;
Expl i ci t Knowl edge, knowl edge t hat can be ext ract ed f rom books,
document s, email s and dat abases. This is t he easiest way t o get and gat her knowl edge in an organizat ion.
Embedded Knowl edge, knowl edge t hat f ound during running
Taci t Knowl edge, undocument ed knowl edge. This kind of
knowl edge is avail abl e inside t he head of workers and can be spread among t hem via mout h t o mout h.
Af t er underst anding what kind of knowl edge an organizat ion has, t hen managers and IT prof essional have t o t hink t he scope of inf ormat ion dist ribut ion. There are t wo scope of inf ormat ion dist ribut ion, which are
di st r i but i on of i nf or mat i on among wor ker s i n an or gani zat i on and di st r i but i on of i nf or mat i on t o t he vi r t ual or gani zat i on wor l dwi de (Int ranet
Journal , 2003).
12. Distribution of Informat ion among Workers in an Organization(focus
on people)
Sharing inf ormat ion among workers in an organizat ion isn’ t a new probl em in knowl edge management issue however it is st il l exist . One of t he ways t hat used nowadays is Int r anet t echnol ogy. Research has al ready
demonst rat ed t hat Int ranet t echnol ogy has showed signif icant increase in ef f iciency and product ivit y of an organizat ion. And al so t here is signif icant correl at ion bet ween int ranet and j ob sat isf act ion (Int ranet Journal , 2003).
Int ranet t echnol ogy can bring a l ot of benef it in dist ribut ing knowl edge management . Of course cost of t he t echnol ogy is one of t he benef it s however it ’ s not t he onl y advant age t hat organizat ion seeks. Int ranet can al so benef it worker in many ways such as a t ool of communicat ion not onl y bet ween workers and organizat ion but al so among t he workers. Int ranet t echnol ogy al l ows workers t o access knowl edge f rom organizat ion nevert hel ess, not onl y has t hat Int ranet st il l had ot her advant ages (see
Figure 8) but al so hel p workers t o communicat e each ot her especial l y in
dist ribut ing t acit knowl edge which is very hard t o be document ed by organizat ion (Int ranet Journal , 2003).
Intranet Features/ Advantages
• Focuses on user needs — not t echnology promises
• Direct l y support s t he organizat ion's goal s and processes
• Enabl es col l aborat ion and communit ies
• Inspires l earning, innovat ion and new t hinking t hrough sharing best pract ices
• Promot es and del ivers bot t om-l ine result s
Figure. 8. Int ranet Feat ures/ Advant ages
Source: Int ranet Journal (2003), ‘ Knowl edge Management and Int ranet s: Put t ing Peopl e’ , avail abl e at :
13. Distribution of Informat ion to the Virtual Organization Worldwide (focus on technology)
The power of Int ernet and web t echnol ogies has become a new paradigm of inf ormat ion sharing. By using Int ernet , an organizat ion can share t he inf ormat ion t o al l corners of t he worl d. It means t hat t he act of sharing inf ormat ion t o virt ual organizat ion emphasizes t he use of t echnol ogy. Unconsciousl y, organizat ions wil l f ocus more on t echnol ogy t han t he inf ormat ion it sel f (Int ranet Journal , 2003).
Ent erprise inf ormat ion port al is t he f orm of f ut ure knowl edge management t hat want s t o be achieved by many organizat ions. Al l t he inf ormat ion and business int el l igence around t he worl d wil l be brought t oget her and become a key rol e in empowering virt ual ent erprise. By providing an easy and personal ized access, rel evant inf ormat ion can be shared t o al l peopl e who can enabl e peopl e t o make a f ast er and bet t er decision. Not onl y has t hat , Ent erprise inf ormat ion port al (EIP) can incorporat ed st reaming audio and video t o enhance t he capabil it y of e-l earning and e-t raining el ement s t hereby pot ent ial l y reducing overal l organizat ion cost (KMWorl d, 2002). There are several t echnol ogies t hat can be used t o enhance t he dist ribut ion of inf ormat ion around t he worl d via Int ernet (see Figure 9 f or
inf ormat ion; which are expl icit knowl edge, embedded knowl edge and t acit knowl edge. Though al l t he inf ormat ion can be ident if ied at t his t ime, it doesn’ t mean t here wil l be no more inf ormat ion. Inf ormat ion in an organizat ion wil l increase by t he t ime goes. The bigger an organizat ion t he more inf ormat ion it needs and t here is a habit f or l arge organizat ions t o
The abil it y t o search across al l or ganizat ional st ruct ured (dat abases) and unst ruct ured (document s, records, emai l s, video & audio f il es, et c) inf ormat i on sources.
Taxonomy, Classification and Indexing of Information Sources
Indexing of inf or mat ion resources and est abl ishment and/ or aut omat ion of an inf ormat i on t axonomy f or indust ry-specif ic or organizat ional l y specif ic inf or mat ion.
Document/ Information Management Systems Business Process Mgt. and Community of Interest Building
Facil it at es best pract ices and communit y of int erest buil ding by l everaging an EIP f ront end wit h t hreaded discussion groups and col l abor at ive t echnol ogi es t hrough an EIP. Intelligent Agents—web crawlers, “ knowbots”
can signif icant l y enhance inf ormat ion discovery and access. Expert Systems
The probl em wil l occur when an organizat ion got a l ot of inf ormat ion. Bef ore an organizat ion can share t he inf ormat ion, al l t he inf ormat ion has t o be sel ect ed and cl assif ied t o ease workers t o f ind inf ormat ion. To sel ect and cl assif y usef ul inf ormat ion isn’ t an easy j ob t o do. However t here are several t echnol ogies can be used t o hel p manage t he inf ormat ion, which are (KMWorl d, 2002);
• Inf or mat i on Management Syst em, a syst em which f acil it at es t he
organizat ion, indexing, cl assif icat ion of document s, cont ent and digit al asset s such as audio and video f il es, il l ust rat ions, records et c.
• Busi ness Int el l i gence, Formerl y used as decision support by many
organizat ions t o manage dat a warehousing, f inancial inf ormat ion f or rout ine dat a anal ysis, st andard report writ ing and dat a mining. However, now, it is al so used t o cl assif y and arrange inf ormat ion.
15. Over promising Myths about Knowledge Management
Knowl edge management can hel p an organizat ion t o gain more benef it such as increase ef f iciency and product ivit y however it doesn’ t mean t hat knowl edge management can do everyt hing. There is a misunderst anding misguided by over promising of advant ages of knowl edge management .
According t o Hil debrand (Knowl edge Management Forum, 2002), t here are t hree dominant myt hs in using knowl edge management . There are:
Knowl edge management t echnol ogi es can del i ver t he r i ght i nf or mat i on t o t he r i ght per son at t he r i ght t i me. In real it y,
t echnol ogy is a t ool t o del iver t he inf ormat ion however it cannot ensure t hat t he right peopl e wil l get t hat inf ormat ion. Though it ’ s a f act t hat t echnol ogy can increase t he possibil it y t hat right peopl e can receive right inf ormat ion however Peopl e t end t o t hink t hat by adopt ing t he most updat ed t echnol ogy can ensure right peopl e t o receive t he rel evant inf ormat ion.
Knowl edge management can st or e human i nt el l i gence and exper i ence. Technol ogies such as dat abase can st ore inf ormat ion
in f orm of bit s and pixel s but it cannot st ore t he rich schemas t hat peopl e possess f or making sense of dat a bit s. The dat a ret rieved by dif f erent person can resul t dif f erent scenarios in handl ing an event .
Knowl edge management can di st r i but e human i nt el l i gence.
Bef ore embarking t o use knowl edge management , an organizat ion has t o check t he purpose t hat want s t o be achieved by using knowl edge management and not t o bel ieve on t he percept ion of what knowl edge management of f ers (Knowl edge Management Forum, 2002).
16. Case Study: Caterpillar Inc. Fends off Competit ion
Cat erpil l ar Inc. (CAT) of Peoria, Il l inois, is a worl d l eader in manuf act uring Robot s, comput er-aided design, and comput er-aided manuf act uring are f unct ioning t hroughout t he various pl ant s. These and ot her comput erize syst ems resul t ed in in-process invent ory reduct ions of 60 percent and savings of several mil l ion dol l ars. Nonessent ial l abor was el iminat ed, product ion processes were simpl if ied, cost l y pl ant s and warehouses were cl osed, l ead t ime t o buil d a product was reduced f rom 45 days t o 10, and on-t ime del iveries t o cust omers increased by 70 percent . Modern management t echniques, such as a comput erized Mat erial s Requirement Pl anning II, were inst al l ed, and comput erized purchasing and l ogist ics syst ems were put int o operat ion. A sophist icat ed syst em f or managing repairs and providing repl acement part s t o deal ers and cust omers was inst al l ed. This syst em enabl ed deal ers t o provide part s t o t heir cl ient s
An execut ive inf ormat ion syst em enabl es business unit s t o anal yze dat a, ident if y t rends, and eval uat e each deal er’ s perf ormance.
CAT’ s deal ers and suppl iers are on an EDI syst em.
Ninet y-f ive percent of t he company’ s empl oyees can access dat a on t he company’ s ent erprisewide syst em (an int ranet ).
A worl d-cl ass repair and part invent ory syst em was devel oped.
The IT proj ect support ed a massive reengineering of t he company. By 1993, Cat erpil l ar had become st ronger t han it s compet it ors, cont rol l ing more t han 30 percent of t he U. S. const ruct ion equipment market . The f irm was abl e t o export more t han hal f it s sal es t o f oreign buyers yet keep it s manuf act uring pl ant s and t he j obs in t he Unit ed St at es. For it s ef f ort s, CAT was a winner of Inf ormat ion Week’ s 1991 “ Excel l ence in IS” award. And what about CAT’ s chief rival : Komat su of Japan? Komat su shif t ed it s const ruct ion-equipment st rat egy away f rom bul l dozers in order t o avoid head-t o-head compet it ion wit h CAT.
Source: Turban, E. , Mcl ean, E. and Wet herbe, J. 2001, Inf or mat i on Technol ogy f or Management , John Wil ey & Sons, Inc. , USA.
16. 1.The Impact of Informat ion and the New Economy
Cat erpil l ar (CAT) is f acing t he compet it or f rom t he ot her part of t he worl d because of t he gl obal izat ion. They compet ed in t he same market t hat is become t he gl obal market . Komat su of Japan is t he main compet it or who ent ers t o US market t o compet e wit h CAT and of f er t he bul l dozers wit h f ort y percent l ower t he price t han CAT of f ered. CAT must cut down t heir product s price t o be abl e t o compet e wit h Komat su but it is not a good st rat egy. They al so f acing a poor economy and at t he same t ime, t he l abor st rike make t he sit uat ion even more worst . The Cat erpil l ar l ost amount of $953 mil l ion by 1985 and t hey have t o l ay of f t heir empl oyees and al so cut down t he expense as t hey next st rat egy. However, t his st rat egy does not respond in posit ive t o t he company, market share st il l pl unge whil e t he l osses are increasing. It can be seen t hat t he CAT who normal l y in t he l eader posit ion are f acing t he probl em of new economy in t heir home count ry t hat is impossibl e in t he past . Komat su got t he benef it of cheaper raw mat erial s and l ow l abor cost of manuf act ure is Asia become t he main compet it or when t hey ent er t o t he gl obal market and can of f er t he cheaper product t o t heir cust omers. Cat erpil l ar need t o change t heir st rat egy t o be abl e t o compet e wit h it s compet it or and sol ve al l t he probl em t hat occur due t o t he gl obal izat ion and t he new economy t hat t he ot her int ernat ional or virt ual f irm become t he maj or compet it or in t heir own home count ry.
16. 2.The Challenge
be sure t hat when wil l t he company can get t he ret urn f rom t hose
environment t o t he head quart er t o decide and adapt t heir st rat egy more rapidl y and al so more ef f ect ivel y t o mat ch wit h t he sit uat ion and respond t o t he new environment quickl y. In t his way, CAT wil l be more f l exibl e t o adapt it sel ves t o t he ext ernal environment .
Cat erpil l ar al so used t he execut ive inf ormat ion syst em t hat hel ps t he manager t o anal yze t he inf ormat ion and al so eval uat e t he deal er’ s perf ormance. The execut ive inf ormat ion syst em hel ps t he manager t o make more ef f ect ive decision. It has great l y increased t he avail abil it y and appl icabil it y of inf ormat ion and ought t o provide a maj or cont ribut ion t o t he sense of great er conf idence, cert aint y, and reduce risk in making t he decision (Rit chie & Brindl ey, 2001). The execut ive inf ormat ion syst em can hel p manager of CAT anal yze t he inf ormat ion and f ind t he rel evant sol ut ion f or t he probl em.
The Cat erpil l ar is now using t he EDI syst em wit h it s suppl iers and deal ers. There are several of benef it s t hat CAT can gain f rom t his syst em. The EDI enabl e t hem t o send and receive l arge amount s of rout ine t ransact ion inf ormat ion rapidl y around t he worl d (Ward & Peppard, 2002 p. 270). In t his way, t he EDI syst ems hel p CAT t o t rade wit h ot hers deal er and cust omers around t he worl d wit hout boundaries, it is not t ime consuming and it is very f ew errors in t he t ransf ormed dat a as a resul t of comput er t o comput er dat a t ransf er. EDI can al so hel ps CAT t o access t he deal ers and cust omers dat abase t o see t he needs of product and spare part s if t here are l ow st ock so t hat t he Cat erpil l ar can provide t he product on t ime f or t he cust omers and deal ers. In t he same way, it can hel p creat e t he sense of part nership rel at ionship since it invol ves a commit ment t o a l ong-t erm invest ment and t he ref inement of t he syst em over t ime. As a resul t , it wil l hel p make t he barrier t o ot her compet it or t o gain access t o t he dist ribut ion channel and prevent t hem f rom ent ering t he market (Thompson 1998, p. 78).
not exact l y know t hat when wil l t hey get t he ret urn and benef it f rom t he invest ment . However, CAT manager underst and t he need f or inf rast ruct ure t hat wil l enabl e t he knowl edge management t hat is very vit al l y t o compet e wit h gl obal compet it or.
Cat erpil l ar had impl ement ed t he inf rast r uct ure such as CIM syst em and so f ort h. A gl obal net work has been creat ed t o t ransf er t he import ant inf ormat ion bet ween t he company, deal ers and cust omers al l around t he worl d. In t his way, t he net work generat ed t he share of import ant inf ormat ion such as t he quant it y of product in st ock t o hel p CAT del iver t he product on t ime. Cat erpil l ar can al so know t he need of spare part s and t he l ead t ime t o produce t he goods wil l be reduced. The net work can be use as a t ool t o share t he knowl edge bet ween col l eague eit her in t he same of f ice or t he ot her count ries. It is al l ow t he co-worker t o communicat e wit h each ot her f or sharing t he inf ormat ion t o sol ve t he probl em, share experience, ask f or an advice, share t he inf ormat ion about t he market environment so t hat t he company can handl e t he change rapidl y and so f ort h. Cat erpil l ar can benef it f rom t his knowl edge sharing and it wil l provide t he compet it ive advant age t o t he organizat ion. Cat erpil l ar al so used t he execut ive inf ormat ion syst em t o anal yze t he inf ormat ion t hat has been col l ect ed t o make t he f urt her decision t o expand t heir operat ion or t o sol ve t he specif ic probl em and al so predict t he f ut ure environment . This syst em can reduce t he risk and reduce t he uncert aint y of t he sit uat ion and it can al so hel p CAT t o gain t he compet it ive advant age as wel l .
Conclusion
E-business is an int erest ing way f or business t o earn more prof it and ef f iciency. Though t here are a l ot of benef it t hat can be gained f rom e-business, it ’ s a wise decision t o l ook at t he negat ive sides such as t hreat s, obst acl es et c. In order t o gain t he benef it s, companies or organizat ions t hat wish t o impl ement Int ernet as part of t heir businesses act ivit ies have t o l ook bot h t he advant ages and t hreat s or obst acl es t hat have t o be f aced.
Knowl edge management is a met hod of t he creat ion, capt ure, organizat ion, access and use of organizat ions int el l ect ual capit al on consumers, market s, goods (product & services), and int ernal processes (Abel l and Oxbrow, 2001, p. 33). It is a powerf ul way t o hel p an organizat ion or company t o at t ain compet it ive advant ages in compet ing wit h ot her companies. The impl ement at ion of knowl edge management has successf ul l y encouraged t he cont inuance of many organizat ions t o achieve goal s. The charact erist ics of successf ul organizat ions t hat impl ement knowl edge management are conservat ism in f inancing, sensit ivit y t o t he environment , sense of cohesion and company ident it y among st af f s and, t ol erance of new ideas, circumst ances, and changes.
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