Beruflich Dokumente
Kultur Dokumente
LUTHRA INSTITUTE OF
MANAGEMENT
MBA (SEM-2)
CLASS-B1
SHIFT-1
Submitted By:-
Roll no. Name
Vehicle Tracking
Enterprise Mobility
INTRODUCTION
In any organization the data of the company should be
processed into information and this is where Management
Information System (M.I.S.) is primarily concerned (Robert G
et.al 2009). The diverse benefit MIS provides to a
business organization are some of these: t is a means
ofachieving effective and efficient coordination between
various Departments; it also help in fast andveracious
referencing; helps to access important data and documents;
less labour force is required;MIS also checks and manage the
day today activities like accounts, stocks payroll, etc.;
also looks out into the daytoday assistance in a
Department and MIF brings a closer contact of the company
withtherestoftheworld(KennethCet.al,2009).The
three main resources involved in the Management
information systems are people, technology, and information
One perfect definition provided by the INFOSEC for MIS is
any equipment that is connected with a computer or devices
like that, which can be useful in the storing, managing
and manipulating the motion or display with the control of
voicesalso.(INFOSEC,2010)
This assignment report mainly focuses on the introduction
and role of an integrated Management of Information
Systems in Li & Fung strategic growth. How this had helped
theorganisationtoincreasetheperformanceinitsglobalvalue
chainprocess,alsotoestablishcontinuedgrowthintheirnet
income.Thisreportalsoincludessomerecommendationfor
anefficientmanagementofinformationalltherequiredfor
smoothandbrilliantmanagementofanorganization.
COMPANYPROFILE:
In Guangzhou, two persons, Li ToMing and Fung PakLiu
laid the foundation for Li & Fung in the year 1906, and
this lead to the development of China from a small
traditional export trading company to a multinational
company globally. This organization has been now
controlled by two Harvard graduated thirdgenerations
brothers Victor Fung and William Fung who gave a
newdimensiontotheorganization.Thereturnbackofthem
causedLi&Fungsdevelopmenttoafirmthatis
managed professionally from a small business which was
managed by the family and they first time brought forth the
planningandbudgetingsystemtotheorganisation.Li&Fung
was considered to be a 2$ billion worth export trading
companygloballyin2000whichoperatesin40economies
andemploysatotalof26,000employeesworldwide.Since
1992 Li & Fung Limited found its way into the Hong Kong
Exchangesince(Mcfarlan,2005).
Collection and management for the extra volume of consumer
productsattheexacttimeforthemajorcompanieslikeThe
Limited, Warner Brothers, Avon, Bed, Bath &
Beyond,Gymboree, Abercrombie & Fitch, Tesco, Products,
LeviStrauss, and Reebok etc is done by Li and
Fung(Mcfarlan, 2005). The major product mix of Li & Fung
are soft and hard goods, Soft goods contains the clothes that
arewovenandknit,thatistheapparel,whereasproductslike
handicrafts,toysetcareincludedinhardgoods.
Under the management of two third generation brothers Victor
Fung and William Fung, they helped the company to go
international by achieving new ideas and innovations in
technology and management of the different strategies
adopted by Li & Fung for its success in the global
market, one is the enforcement of intranet and extranet
information technologies in the organization. The internet
technology helped to standardize the various systems across
the organization and readily linked the different companys
officesinvariouslocationandmanufacturingsites,thereby
promoting an easy track of the orders and checking out the
improved quality. On the other hand the extranet technology
used in the organization helped in conjoining the company
directly to its customer and set up meetings. Before the
introduction of MIS or Ecommerce into their organization
they had many queries in their minds likeWould the internet
makeanynegativeeffect?Whatwillbeourresponseifsome
one else all the data regarding buyers and factories are
providedonline?etc((Mcfarlan,2005).
Intranet&Extranet:
With the launch of intranet and extranet (ecommerce) Li &
Fung had managed to extended of its supply chain to
new markets which gave them connection to the greater
efficiencies and the great untapped market potential of that
time.Themajorfunctionofthesystemofthreeyearplanning
ofLi&Fungistohaveadeepobservationatthefactifwe
stillhavescopewhichagaindealswithifweareornotgoing
tobedisintermediated.Thisresponseleadstotheinitiationof
anInternetfacilityintheorganisation.LiandFungintroduced
aninternetlinkintheyear1995whoseaimwastocombine
the main officesof thegroup andtheirsites ofmanufacturers
globally,whichsimplifiedtheirinternalcommunicationsystems.
Internet helped them to check out the progress of the on
going orders and shipments, and the digital imagery allowed
them to solve the troubleshooting. Extranet was launched
in1997aftertheimplementationofintranet.Eachsiteofthe
organisation directly linked the company to its key customer.
By 2000, 10 such sites were launched by Li &Fung which
helped them to track the orders and the development of
productsthroughonline,andremovingormakingeasiersome
of the process . As seen earlier, the new internet
launched by Li &Fung provided a base for the coupling of
themanufacturersandtheretailers(JoanneSlater,1999)
lifung.com: In December 1999 Li & Fung and Castling
invested together for in a first round financial for the
implementation of lifung.com. For facilitating the coordination
new entry into Li & Fung fold, According to the group
chairmanVictor,notonlyforjustenduringthediversitybut
alsoforthestrengtheningofthediversity,thereisa
requirement for adapting a corporate culture, in other
sentence it is to have such culture that stays humble,
effective,andalertallthetimeandmainlyitkeepsthe
individuals of the firm to concentrate externally. Li & Fung
as a pioneering organisation Fung allowed their senior
managersofthedifferentlocationtotakeinchargetheninety
smallandglobalmanagementteamsasdistinctaswellas
individual firms. The requirements of the clients were taken
carebytheteamofproductspecialistsbytakingthemundera
section called Li and Fung corporate umbrella which are able
to provide the financial and administrative backup from
HongKongtothem.SObecauseofthistheywereable
to adapt very quickly to the fast changing seasonal
fashion.(JohnBarnathan,2000).
Lifung.comB2BportalofLi&Fungputtogetherallof
thesmallordersofSMEsandweresuccessfulinoffering
SMEs the collection of services with very less mass
customization. They further proceed by charging 1015%
commission for SME, which was very less than what they
actually pay. Limited mass customization was the other idea
of lifung.com which further extended the supply chain
customization and novelty of Li and Fung, very important in
the Internet age where every customer mainly expects greater
speedandreliabilityoftheirorderfulfilment(Mcfarlan,W.&
Young,F.2005).
.B2BParameters:Climaxresults,thegenerationofB2Bportal
lifung.com, the setting up of the management team was
done by Li and Fung in 1999. Besides Li & Fung
admittedtoothatitlefta$200mforbuildingupthenew
ecommerce lifung.com and blazoned around how the e
commercecouldmeet$billioninsalesby2004bymostlyby
targeting(SMEs)smallmediumsizedenterprisescustomers.The
verynextday$250millionwasraisedbyLi&Fungbythe
placement of60million shares viaUnderwriterGoldman Sachs
for funding the new ecommerce mission. So, the Fungs
created a three guiding strategies of lifung.com, termed as
B2B, mainly aimed to embrace a business tobusiness
approach .And Take a backtobasics" model through
executingsupplychainmanagementofLi&Fungknowhow
toSMEsonabacktobackorderbasics.Expectedearnings.
Inthefirsttwoyearsthegroupearninghadamarginof6%,
14%oftotalrevenue,by2004therewasariseofabout1/3
rd of the total revenues of the firm which was around $2
billioninsales,and78%operatingmargins.Thiswasmainly
because as the company had focused on bottom line (Joanne
Slatter,1999).
ExecutionofEcommerceTheLI&Fungslifung.com
was able to provide an extensive range of customization
offers to their clients, as for instance, the selection of on
screenlikepockets,collarsetcbytheusersofpoloshirts.The
development of lifung.com occurred and the operation of the
IT section ofthe firmwasdoneindependently becauseof the
two separate uints in two separate continents. So to map the
connectionbetweenthetwounits,Fromtimetotime,fouror
fiveprogrammersfromLi&FungsITdepartmenttravelsto
lifung.cominSanFrancisco.Actuallylifung.comwasdesigned
mainlytointeractwithLi&Funginthesamewayasoneof
themaincustomers,withordersplacedthroughanextranet.It
wasthetrustoftheFungsthatathreatwouldnotoccurdue
to B2B exchanges as it provides a platform for trading
between the those who sell and those who purchase.
(LouisKrar,2000).
Theinfluenceofinformationtechnologyinimprovingthe
supplychaininLi&Fung:
The IT has significant impact on the supply chain
management field which is mostly concerned with the
overseeingofmaterials,information,andfinancesastheyshift
in a process from supplier to manufacture, to wholesaler to
retailers to customers Birgit D et.al 2005). The IT in an
organisation make easier the information exchange and
business procedures within the company and in between the
partnersofsupplychain(BirgitDet.al2005).Inorderto
have a adaptable competitive advantage for any
organisation,theirsupplychainneedstobeveryflexible,
active,costeffective,andresponsive.(AndrewT,1999)
theMIStechnologyinLI&Fungmajorlytookonthesupply
chain customization which helped to reduce the time delay
from three months to five weeks. This rapid action inturn
reducing inventory cost for the clients. Besides Li &
Fungbenefitedinreducingthecreditrisksandensuredquality
to its valuable consumers. In addition, in contrast to the
competitors, with the worldwide network of sourcing and
economiesofscaleLi&Fungofferedhighlyflexibleandvery
low cost sourcing. From the above statement, according to
Victor Fung, Li & Fung does not have any boxes in the
supplychain.Holisticvalueofchainperceptionformsthebase
forthecreationofvaluechain.NeverthelessrecentlytheLi
& Fung commenced to enhance the operation by
integrating links in the chain with the help of technology.
IndeedLi&Fungevencouldoffertherawmaterialsourcing
TheBubbleInconcept:
ThedifferentquestionwhichtheFungbrotherhastofacewhile
adoptingEcommerceintheirorganisationareasfollows
Whatwouldbeitsstructureifitallemergesandhow?
HowthevalueofLiandFungcanbeelevatedusingthee
commerce?
Does it requires a novel group of entrepreneurs or the
prevailingITdepartmentof60isenough?
Victor finds it much essential for the strategy of e
commerce and it should be create from inside of the
company, and not from an external source. That is it
shouldbeBubble In,not bubbleout. Accordingto Victor,
if the solutions are internal only, the whole Li and Fung
organizationcouldbebenefitedcompletely."Theywantedthe
technologytopervadetheentireorganisation.Accordingto
thepresidentofLFInternationalInc,MichaelHsieh(HBS
84), giving the application of ecommerce to a third
partyfromtheoutside,islikeputtingthefoxinthechicken
coop, which could lead to a heavy loss for the firm.
Outsiders mat also be at a high risk with providing
outsiders with proprietary information, knowledge of the
companystrategy.Theyhadoptedforastrategywhichisable
tocouplethetechnologyandsupplychaintohaveaprogress
intheretail,sothestrategiesadoptedweremakingaCastling
Group i.e., to have an internet startup company which will
helptodefendtheofflineagainstonlinecompaniesthreatto
their marks on the other hand extending their online
presence ((Mcfarlan, W. & Young, F. 2005 ) Also the
Evolution of Castling from B2C to B2B is a major part for
the organisation growth and the complementation of Li and
Fungs is also very much possible. In 1999 they invested a
sum together lifung.com and came up the lifung.com for the
organization.WhenLi&Fungsonlineventurelifung.comwas
tobelauncheditwasafirstandafastmovingapproach,
forlaunchinganonlineventuretherearethreestagestobe
followedtheyarethestrategyandtacticforthebusiness,the
designbuildtest phase and then exact carrying out. For the
success of a dotcom of any organisation there is needed a
fundamental trust mostly prefer an openness and a regular
trust(Mcfarlan,W.&Young,F.2005).
.ButbeforefullyadoptingtheonlineventureLiandFungthey
wish to have a balance between old and new economy
which was a totally new idea which most of the
companies did not adopt when launching an online. The
researchforthefindingoutthestructureofthetargetmarket,
wasperformedbythemfirst,andthentheystudiedtheactual
necessitiesoftheretailers.
CompetitiveThreats
WiththelaunchofinternettechnologyinLi&Fung,they
had to face some of the difficulties like the threatening
feelingfacedbytheoldretailersduetothenewinternet.Also
William(CEO)foundoutthatInternetcompanieswiththehelp
ofmoneydamageofflinecompetitors,onewayisbytakingin
their possession. Online companies which has an old
economytradingcompanyandtheofflinecompanieswhich
were the partners always posed some threats. The actual
meaning of the internet revolution according to the two
brothersareasfollows.,"Mostlytheinternetinfluencetheway
the information is transformed to and the individuals
makemutualinteractionitis
consideredtobethemostdramaticchangeyetbutitisn't
going to be the last one" (William Fung) It is almost
like fax or telephone revelation which can prominently
lessen the delay (Joanne Slatter, 1999). Whereas Victor Fung
states"theinternetindeedisgroundbreakingtechnology,but
howevernewtechnologyisstilltechnology".
Consideration of Security issues in implementing ecommerce
system Some of the dangers associated with the
implementationofecommerceinabusinessissoseverethat
it can damage the whole organisation growth, which will take
them to go back to the traditional way of business. The
continuous attack by hackers in internet and attacking
consumersprivatedataisagreatthreatkind(KennethC
et.al 2009). Before launching the ecommerce in any
organization there are several security issues which need to
known. Mainly it is related to the reliability of the business
network and its internal systems. Having a sound and
protectedTransactionalsecuritydeepenstheconfidenceofthe
clientsintheecommerceandthebusiness.Thesecurity
oftheorganizationdependsmainlyonthemanagementteam,
how effectively they take steps to protect the privacy,
honesty, legitimacy (Ulric J et.al 2011). The unauthorized
monitoring of network can be threatening transaction privacy.
OfthesomesecurityissuesconcernedwiththeuseofITis
facingthevirusinthesystemwhichcandamagewholeofthe
systems data. Viruses are a nuisance threat in the e
commerce world. Some virus allows the data reliability and
fraudattackstobeginfromthevalidclientssystemsandvery
difficult to solve. In addition, Consumer privacy the is the
another security issue with regards to the ecommerce. In
realityconsumersneverwanttousethebusinesswhichdeliver
precise clients data like information of the credit card, SSN
information, credit limit etc (Kenneth C et.al 2011).
Conclusions
FromasmalllocalimportexportcompanyinChinaLi&Fung
grew up over the years to a great$2 billion global export
trading company today. When the revolution of internet came
about Fungsbrothergrabbed theopportunityto introduceitin
theircompanyLi&Fungtoeffectivelylinkitsemployeesand
theglobalofficeswithinthecompanyandalsotolookinto
the operations of the company with that of its external
customers needs. The MIS/IT helped in a great extent to
progress the business needs of Li & Fung. Li & Fung took
the ecommerce growth strategy further by implementing
lifung.com in 2001 to make it to reach out to the various
SME market and get good benefit fromthe e economies of
scale. During the first half of 2001, the technology showed
sales revenues of $5 million, which was not of the
expected one as it was lower than expected; its mainly
because The customers were reluctant toexcept to this
changeandnewtechnology(Mcfarlan,2005).Theypreferred
usualsalespersonneltotakecareoftheirorders.Thiscosted
for Li & Fung. The launch of the Internet bubble solved the
problemtoaextent.Li&Fungdidnotexperiencethe
tangible and intangible benefits it had hoped for.By the
strategyimplementationoforganicgrowth,theorganisations
view, understanding andimplementation of MIS/IT systems
promotedLi&Fungtostayaboveitscompetitors.
Bibliography :-
http://cio.economictimes.indiatimes.com/news/case-
studies/intellinet-datasys-creates-mobility-solution-
inhouse-looks-to-offer-it-globally/51117000
http://courseworkshub.com/assets/uploads/course_work_
hub1504_12_151449224702.pdf