Nobody would argue that information is a valuable possession, especially for those who want to achieve success. It empowers people and organizations; it makes masses aware of something important and gives details for those who are attentive. However, information is nothing without means, which are able to process it. That is why information technologies (IT) are a very important aspect of any business. IT helps be hand in hand with a current situation inside the company and observe tendencies at the external level. In addition, information technologies also provide the ability to analyze and predict the behavior of competitors, which can be crucial on the highly competitive market. Nevertheless, there are many examples of companies, which managed to become thriving due to a clever organization of IT. Thus, this essay will give an account of information technologies use in the development of United Parcel Service (UPS).
Taking this into consideration, it is necessary to describe the following issues. First of all, inputs, processing, and outputs of information technologies in UPS need to be discussed. Actually, it is a basis for understanding the essence of IT incorporation into the initial business strategy. Furthermore, it should be noted that such an important role of IT is explained by the specific features of UPS. In consequence, actual information technologies should be described. It is also important to draw a link between IT and its impact on the business strategy of UPS. Therefore, matching basic theory and evident practice will make able to understand the entire mechanism of IT in a business environment. Finally, it is necessary to contrast the real performance of UPS and imaginary UPS without implemented information technologies. In such a way, the implied advantages of IT incorporation will be obviously seen.
A Mechanism of UPS’ Tracking Package System
UPS is famous for its tracking package system. In fact, it is an IT system which processes related data in a necessary way. It is important to mention that the tracking package system does not take information from any extra sources. However, it should not be regarded as a negative feature. Actually, the tracking package system responds in accordance with given input data. Taking this into consideration, it is necessary to explain what is an input data for UPS’s tracking package system. The following example can clearly describe that. For instance, an individual sends a package from Boston, MA to New York, NY by a priority delivery, which means that the package has to be delivered within 1-2 days. Thus, input information for this order is the location of a sender, the location of a receiver, terms to deliver the package, and certain payment for the order. In addition, a driver, who delivers this package, gets the shortest route to the location and priority in the list of orders so that the route can be different if the driver visits other places to deliver packages. What is more, it is worth saying that payment has not to be considered as an input or output data. It can be changed due to various circumstances like a change of delivery destination, withdrawal of order, and failure to deliver a package in time. Needless to say, both input and output should render some mutually related response. To be more exact, a change of payment has nothing to do with other input data – it is a so-called extra informational factor. All in all, it should be said that input data is always related to output. In other words, an output data is an input data which was rendered through certain parameters. In fact, rendering input data into output is called processing.
First of all, it should be noted that the processing of data in the tracking package system simply means a reflection of current parameters of the order in comparison to the initial ones (Aksoy & DeNardis, 2008, p.179). In other words, the system receives an input data, compares it with a current situation, and responds with output information. The processing of data can be described in the next example. For instance, a vehicle with the package is currently situated in North Convey, NH. The customer enters the tracking code of his or her package on the UPS website. In consequence, the tracking package system responds with relevant information about the location, time, and type of the order.
The same mechanism works with tracking package system for vehicle drivers. A driver has access to the number of packages in the vehicle, their destinations, terms, priorities, and possible routes to deliver them. In this case, the tracking package system compares the current status of a chosen package with an input data for it. For example, the package has to be delivered to Boston, MA in four hours. The driver sees that the package is not delivered and four hours left. Therefore, priority changes, and the driver takes another route. Moreover, if the driver comes to a wrong place, the tracking package system will inform about it. In addition, it accounts how many packages are delivered per load and how many left so that the driver could never miss any orders (Niemann, 2007, p.185). Taking this into consideration, it is possible to conclude that the processing of data also analyzes wrong outputs. A practical business impact on that will be further discussed, but now it is necessary to distinguish what output data means in UPS tracking package system.
As it was previously mentioned, output data is a result of input data processing. Therefore, output is a response to a customer’s or driver’s request. It is worth saying that some responds are given automatically, and some of them need an initial request. Furthermore, output data is not constant in comparison to inputs. In fact, it varies in accordance with processing parameters. In other words, the same input can give different outputs. Actually, it depends on the current status of the package. What is more, output data is possible to be compared with previous outputs if any were related to a particular package. In contrast, it should be noted that the location of a receiver can be still changed, even though it is regarded as an input data. Technically, the receiver remains the same while an appropriate route and, hence, priority are changed. In addition, it should be pointed out that the same output data is presented to a customer and to a driver differently. The customer sees information, which is related only to his or her package, while the driver receives a piece of data in the whole unit of the vehicle.
All in all, it is necessary to say that UPS’s tracking package system, as any information technology, divides its performance into three phases: input, processing, and output. All these steps are mutually related and inform customers and vehicle drivers. The main principle of the tracking package system is rendering input data according to the current parameters of a package. In such a way, the information about packages is updated in a real time regime. Needless to say, this technology efficiently boosts the performance and quality of package delivery. Taking this into account, it is necessary to distinguish how this IT influences the business strategy of UPS and by which tools UPS controls its tracking package system.
Technologies of UPS and Their Impact on Business Strategy
FedEx, the nearest competitor of UPS, introduced its wireless network application to track documents and parcel shipments in the early 1990’s. As a result, UPS had to respond with an appropriate action and qualitatively improve its own performance. That is why UPS designed its own technology, which underwent several steps of evolution, and nowadays it is the most efficient application of tracking package shipment. The number of customers increased, and the need for reporting up-to-date information about a parcel’s state started getting stronger. In consequence, UPS developed its own technology, which is called Delivery Information Acquisition Device. It is a custom-built data collection tool which captures information about the shipment and initial orders of customers. At the very beginning, the technology was implemented through Motorola modems, which provided a connection between UPS website, vehicles, and private telecommunication networks. Nowadays, DIAD is run by a special application UPScan. This application can exchange data through Bluetooth and wireless LAN technologies. In such a way, the performance of UPS became more detailed. In other words, it is possible to operate and automate business processes to a broader extent in local drop-off centers and their areas. Therefore, it means that big wireless platforms are no longer needed. That is why they were reduced from nine to three. In addition, UPS managed to improve the efficiency of employees’ performance. To be more exact, UPS designed a special scanning device, which is called Emerald. The scanner is attached to a driver’s hand and connected to the other device on a driver’s belt. The scanner captures data from the package and immediately sends updates to UPS’s databases. Moreover, this application is planned for a further usage with accounting dangerous materials, gas consumption, and analysis of route-creating operations. Finally, UPS plans to upgrade its vehicles with personal wireless access points so that each vehicle or truck can be connected to UPS database all the time, regardless of a location (Umar, 2004, p.54).
All in all, UPS tracking parcel system is based on the custom-designed platform, which is called Delivery Information Acquisition Device. It has been developed through time, and nowadays it works with high efficiency and various business operations within the company. Besides, UPS managed to broaden its tracking package system so that it works in every single drop-off center and all the nearest locations. In such a way, complex business processes can be operated without the support of big technology platforms. In addition, the work of shipment staff was also improved due to designing a scanner which captures and sends updates about a parcel status. Taking all these points into consideration, it is necessary to discuss the impact of IT on UPS’s business strategy.
It goes without saying that UPS has chosen IT as a key factor of its business strategy’s improvement. To broad extent, tracking parcel technology implementation is primarily based on the need to obtain a competitive advantage, rather than on economic considerations. In other words, it is worth mentioning that UPS clearly understands customers’ psychology. First of all, every single customer worries about whether his or her parcel has been successfully shipped (Couch, Chen, & Maines, 2006, p.8). As a result, UPS tries to satisfy this anxiety. By the same token, UPS organizes its performance. Every single action is passing through a database, and management has a real display of the situation at the moment. In such a way, parcel-handling productivity increased, and customer flow started getting more intensive.
Hence, UPS changed its approach. Instead of the promise to deliver parcels in time, UPS keeps customers informed so that every single customer feels being aware of the situation. In fact, this change influenced the whole business strategy of UPS. To begin with, it is necessary to describe an internal impact on UPS’s business strategy. Actually, information technologies became a constituent part of management. In most enterprises, IT is just a supporting tool for decision-making. IT plays another role in UPS: it actually leads management. The tracking parcel system informs about customers, payments, and certain patterns of shipment areas. As it was outlined before, UPS is going to incorporate IT in accounting fuel consumption and route planning. Thus, it means that IT controls resources and, hence, relations with partners. For example, the average gas consumption data per month reflects a demand for the next import from partners, and management decides whether it is beneficial to the company.
Speaking about an external impact on the business strategy, it should be said that UPS primarily cares about its customers being informed. As it was previously mentioned, any customer wants to be ensured that his or her parcel has been successfully shipped. It can be explained by the fact that UPS suggests only services without goods production. In consequence, the enterprise has a direct connection with its customers. Besides, UPS is minimally limited to the economic and legal circumstances. Citizens will always need to exchange packages without any respect to economic instability. Taking into consideration a legal aspect, it should be noted that UPS does not have to be additionally certified. UPS is regulated only by standard legal limitations. Finally, it is worth admitting that UPS is focused on performance on the market on its own. It does not want to establish any partnerships with competitors in order to increase a market share. Everything that UPS’s competitors can suggest, the company organizes on its own by the implementation of sophisticated information technologies.
Advantages of Information Systems
Information technologies are known as means which are closely stuck to business strategy and decision-making. Thus, IT does not play a “personal” role in a company. Nevertheless, some enterprises prove an opposite statement. Information technologies can provide management with a wide range of advantages. In order to solve certain business problems, management has to incorporate IT into a business model, at least on the level of business intelligence. In fact, as it was described before, UPS implemented IT in its management. As a result, UPS is able to take more business opportunities and perform with more efficiency. What is more, the information system enables UPS to solve the following problems without making a special effort and, therefore, investment.
To begin with, IT helps UPS focus on external issues. Taking a specific business section of UPS into account, it should be noted that information technologies focus UPS’s business strategy on its customers. In fact, the tracking parcel system was created to satisfy customers’ need to be informed about their packages.
The next advantage is a reduction of costs. In fact, information technologies are regarded as an additional tool because the data itself does not change anything. In contrast, it depends on how IT is organized. In UPS’s case, it is a part of management. Thus, it makes the whole business model work efficiently. Consequently, more efficiency means fewer costs.
However, IT in UPS does not work just for management. It is hard to argue that IT data is mutually related. Actually, IT unites the work of all departments so that everyone strives for a common business goal. Besides, it should be noted that the information system of UPS not only extends access to customers, but also predicts their behavior. Judging by the type and amounts of parcels per customer, it is possible to forecast whether this customer will use UPS’s services again. In addition, embedding UPS’ applications in customers’ websites also means that they are going to use UPS’ services for a certain period of time. Needless to say, IT provides all these data. Nevertheless, information systems (IS) do not create customer behavior patterns on their own. Actually, UPS’s tracking package system collects data about customers’ transactions. In consequence, it enables to design a pattern of paying customers’ abilities, needs for using UPS’s services, and the most “popular” drop-off centers and shipment locations.
Furthermore, IT does not perform management itself. To be more exact, informational technologies help understand a business situation, and, thus, make a right decision or take an adequate action. It is worth mentioning that the latest trends in IT do not guarantee success. It is necessary to be able to “read” data that information system provides (Peppard & Ward, 2002, pp.35-37).
In order to prove all the mentioned points, one should imagine what would happen if none of information systems were available. To begin with, the whole decision-making process would stop. IT is the primary source of data for decision-making. Without necessary data, business intelligence would be unable to design even the simplest business model. Further, it would be impossible to connect departments with each other because information systems also provide management with internal data, which is exchanged between certain departments of the company. What is more, the absence of IT means a total disconnection with a market. It can be explained by the fact that IS reflect some external data and can ground the forecast of competitors’ and customers’ behavior. In addition, it should be noted that the absence of IT would change business strategies and relationships. It is hard to deny that none of enterprises would strive to exploit some information about its competitors. In consequence, it could lead to a strong competition, which would be based on the struggle for information. Such competition makes exclusion because it does not motivate companies to perform better. Thus, it means that more companies, which are focused on informational services, would appear. These companies would obtain a monopoly so that enterprises of other business sections would become dependent on them.
Speaking about a specific case of UPS, it should be admitted that the absence of any information system would devastate the whole UPS’s business strategy and, thus, a thriving performance. To be more exact, customers would not be informed about their parcels at all, and internal accounting would be definitely harmed, as well. Moreover, it means that UPS would not be able to predict its customers’ behavior. Besides, performance of the staff would be poor. First, drivers would not be informed about route and priority changes in time. Second, it means that chances to miss some parcel would increase. Furthermore, the risk to ship a parcel to a wrong addressee would be considerably higher.
However, one more important point is worth noting. Information systems are also known as a platform for taking business opportunities and innovations design. The information system of UPS provides all the necessary data in different ways so that it is possible to notice a business opportunity or issue, which can be potentially improved. Finally, it is to be outlined that information systems can boost business performance in many respects. In order to manage that, it is required to implement IT at least on the level of business intelligence. In other words, the information system will complete more tasks if it is given more responsibilities. In addition, IT is an important tool for any company because it is impossible to run business without using information technologies. In case of no IT, the whole business practice would be considerably different.
To sum up, it is to be said that IT plays an important role in business. First of all, it is actually the basis for decision-making. In UPS’s case, IT is an efficient tool for communicating with its customers and predicting their behavior. What is more, UPS’s tracking parcel system is a perfect example of the successful implementation of IT into a business strategy. In fact, the whole strategy is supported by the information system. UPS has chosen a successful approach, which presupposes the satisfaction of customers’ need to be informed about their parcels. Speaking about UPS‘s tracking package system, it is an average information system which renders data through three states: input, processing, and output. Taking this into consideration, it is to be concluded that even a simple IT can boost a business by incorporating it into management and business strategy as UPS’s case witnesses.