Although the role of information technology (IT) in enabling competitive advantage is well established, many organizations still find it a challenge to convert IT investments and assets into new business opportunities. The case study in this article describes how United Parcel Service (UPS) has used IT investments to create IT assets and IT competencies, which have led to business capabilities, then to new business opportunities. These opportunities were identified by examining the value network that links UPSâ€™s internal value chain with its customers to uncover information and IT needs of various business partners. In particular, we describe five new IT-based business opportunities that benefit UPS and its customers: (1) outsourcing rural deliveries to a competitor, (2) getting customers to do UPSâ€™s work, (3) helping customers respond swiftly to product recalls, (4) fixing customersâ€™ mistakes and (5) doing customersâ€™ work for them. There are five key lessons from UPSâ€™s experience: (1) Integrate internal IT systems before integrating customersâ€™ processes, (2) Identify service gaps in customersâ€™ business where your IT can add value, (3) Encourage and be open to ideas from front-line managers, (4) Focus first on cost-cutting business opportunities, then on revenue increasing ones, and (5) View information and IT as two distinct assets.
"Innovating to Create IT-Based New Business Opportunities at United Parcel Service,"
MIS Quarterly Executive: Vol. 6:
4, Article 3.
Available at: https://aisel.aisnet.org/misqe/vol6/iss4/3