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23-Ind-B4 Design of Information Systems · December 2013

Question 9 of 13: The Business Value Chain Model

Nivaar worked solution (AI-drafted; not reviewed by a licensed engineer)

Notes on this paper

National Exams — December 2013 — 98-Ind-B4, Design of Information Systems. 3 hours; closed book, no calculator permitted. The exam comprises four parts: Part A (select 20 of 40 terms and explain each in a sentence or two, 2 marks each = 40 marks), Parts B and C (select 2 of 5 questions in each part, 11 marks each = 22 marks per part), and Part D (select 1 of 2 questions, 16 marks). Complete answers to every term and every question in all four parts follow below, not only the minimum selection a candidate would submit on exam day.

Reference texts: Laudon & Laudon, Management Information Systems: Managing the Digital Firm, 15th ed.; Schwalbe, Information Technology Project Management, 9th ed.

Question 9 (Part C.3): The Business Value Chain Model (11 marks)

Question text not reproduced: the examination questions are © Engineers and Geoscientists BC. Open the official past paper (linked at the top of this page) to read the question, then follow the worked solution below.

Primary Activities

Primary activities are the activities most directly involved in producing and delivering the firm's product or service to the customer. Inbound and outbound logistics — receiving/warehousing raw materials and distributing finished goods — are supported by warehouse-management and RFID/barcode inventory-tracking systems, and by electronic data interchange with suppliers and carriers that replaces manual paperwork with real-time shipment and inventory visibility. Operations — converting inputs into the finished product or service — are supported by manufacturing-execution systems, materials-requirements-planning (MRP) systems, and process-control/automation systems that schedule production and monitor quality in real time. Sales and marketing are supported by CRM systems (Question 1's term 15), e-commerce platforms, and digital/targeted-marketing analytics that let the firm reach and convert customers far more precisely than mass, undifferentiated marketing. Service — support after the sale — is supported by field-service-management systems, customer-support portals, and searchable knowledge bases that let customers resolve issues themselves or let support staff resolve them faster with full account history in front of them.

Support Activities

Support activities do not directly touch the product but make every primary activity possible. Administration and management is supported by ERP systems and executive dashboards that give leadership an integrated, current view across every primary activity for planning and control. Human resources is supported by human-resource-information systems for payroll and benefits administration, e-recruiting platforms, and e-learning/training systems that build the workforce capability the primary activities depend on. Technology (product/process technology development) is supported by product-lifecycle-management, CAD/CAM, and R&D data-management systems that shorten the time from design to production. Procurement is supported by e-procurement platforms and supplier portals that automate sourcing, quotation (an RFQ process, Question 1's term 36), and purchase-order workflows with suppliers.

How the Model Fits Together

Porter's value chain frames every activity, primary or support, as a place where information systems can add margin — either by lowering the cost of performing that activity or by differentiating it in a way competitors cannot easily copy — and the model's real analytical power is in looking at the LINKS between activities (e.g., sales data feeding directly into operations scheduling) rather than at any one activity in isolation, since integrating adjacent activities is usually where the largest competitive advantage is found.