CLASSIC CASES: AN INTRODUCTION TO INFORMATION SYSTEMS IN ORGANIZATIONS Coors Ceramics Revamps Information Systems Coors Ceramics was spun

off from the Adolph Coors Company in December 1992. Today the company is one of the leading suppliers of ceramic materials and components to the semi-conductor and laser industries and has developed a worldwide reputation for quality and precision. Coors's old information systems took as long as two days to process new orders. Because of delays and inaccuracies in processing, there was no way a salesperson could track the exact status of a particular customer's order. With 1,500 orders coming in monthly, that was a huge problem. To compensate for the processing delays, Coors would produce more orders than it received so that it could build up inventory to meet customers' desired delivery dates. Although it did help meet customer demand, this approach raised inventory levels, production costs, and overhead costs. Customer delivery was also a problem. The old system could only track shipments on a weekly basis. If a customer wanted an order on Monday, and Coors shipped it by the following Saturday, the system logged that order as being on time. When customers called to complain, the salesperson would get no valid data from the system other than an incorrect shipped on time report. It was clear that improvements were needed; however, before investing in the development of new information systems, Coors defined three key business goals that the new systems must achieve: First, they had to increase customer satisfaction. Salespeople were under tremendous pressure to get information for customerswhich in turn prevented them from developing new orders and selling product. Second, Coors wanted to reduce lead times. If work-in-progress, inventory, and delivery schedules could be reduced, then Coors could produce more customer orders. Third, Coors needed to reduce operating costs. Coors's approach to meeting these goals required redoing and streamlining many fundamental business work processes. In other words, the project team focused first on how to meet the needs of the customers before they thought about how to update their outdated information systems. This rethinking often required challenging fundamental assumptions about how the business should operate. Once the work processes were redesigned, the project team implemented an integrated set of information systems. These new systems automated the work processes associated with acquiring raw materials, transforming raw materials into top-quality products, and delivering them to customers within the shortest possible time. The project proved to be highly successful. Since the systems were installed, Coors's product cycle has been cut from an average of 12 weeks to 8 weeks and on-time shipments have improved to over 95%. Coors salespeople can now be confident that shipped on time means the order was delivered on timenot just that it shipped within a seven-day period. The new information systems have also improved business decision making. Each morning, the general manager of sales and marketing meets with key people from manufacturing, engineering, and sales. They review the previous days sales and requests

for new products. They discuss how things are going and can check on the current status because everything that happened as of that morning is already in Coors's information systems, ready for decision making. Discussion questions: 1. How has implementation of an integrated set of information systems enabled Coors to meet customer needs more effectively? 2. Did this system meet all three key business goals for new systems at Coors? Why or why not? Critical Thinking Questions: 3. Identify three key decisions that must be made at the business review meeting each morning. Identify six questions that are likely to be asked by the general manager at the morning business review meeting. 4. What additional features or benefits might you want this basic system to deliver? Sources: Adapted from Investor Relations and Products and Services portions of the Coors Tek Web site at *http://www.coorstek.com; About QADs Applications portion of the QAD Web site at *http://www.qad.com/product Sears Employs Modeling Software to Manage Growth Through its network of 850 full-line stores and more than 2,100 specialty stores, Sears provides apparel, home, and automotive products and related services for nearly 60 million American households and generates revenues in excess of $40 billion. Searss full-line stores, located in many of the nation's shopping malls, are at the heart of the company's retail strategy. Their dramatic transformation over the past five years as part of a $4 billion building and remodeling plan speaks to Searss commitment to create a compelling shopping destination for the American consumer. Fifty-seven million square feet of space in these stores has been remodeled since 1993, with 65 new stores to be added between 1998 and 2001. Sears has developed a planning and scheduling model that defines templates identifying all the tasks, effort, and elapsed time associated with planning, building, and opening a new store. This data enables Sears to forecast how long it will take to complete each new store. The construction and remodeling process has become more efficient by using this model to schedule the delivery of construction items, fixtures, and store merchandise. The software can combine several subprojects into one schedule, allowing the user to build a master schedule that maps out an overall store project. Users can also check for changes in upstream project tasks that will impact other project tasks and deadlines downstream. "The benefits of this model were apparent immediately. Under the old system, schedule delays were not communicated, causing urgentand sometimes costly requests for fixtures or merchandise to prepare the store for its opening. Merchandise was delivered too early or too late, resulting in last-minute changes to floor presentations. Likewise, crews were inappropriately scheduled. But the improved project tracking available through the new model keeps everyone informed of up-to-the-minute changes.

If the construction deadline for a portion of a store or the installation of a display changes, the materials suppliers, construction teams, display builders, and merchandise buyers are all quickly informed. They then can adjust their tasks to avoid further complications or cost increases. Furthermore, as a result of this improved planning capability, "Sears estimates that the company has reduced the time it takes to complete a new store by two weeks, bringing in additional revenue earlier. Discussion Questions: 1. What sort of reports do you think the model generates to simplify the effort of tracking the progress of opening each store? Would graphical output be of value? Why? What sort of graphs? 2. Identify the key benefits of using this model. Critical Thinking Questions: 3. How should the model handle variations in work rate where crews at one store may work substantially faster than crews at another store? 4. Where would Sears derive the templates and the effort and elapsed time associated with each task for the planning, building, and opening of a new store? Is it possible that the planning, building, and opening of one store may require new tasks not in the template? Is it possible that certain tasks in the template could be eliminated for a given store? How would the model allow for these possibilities? Sources: Adapted from Sears Annual Report; Sears Announces Expansion of the Great Indoors. Whirlpool Implements Automated Pricing System Whirlpool Corporation is the world's leading manufacturer and marketer of major home appliances, with headquarters in Benton Harbor, Michigan. Its 60,000 employees manufacture fine appliances in 13 countries and market them under 11 major brand names in approximately 140 countries around the world. Recent revenues exceeded $8.5 billion annually. Responding to a competitive price change used to take a lot of effort for Whirlpool. When one of its competitors dropped price, a flurry of faxes and overnight packages flew out of Whirlpools headquarters to match them. Yet, it was often weeks before Whirlpool could adjust its prices. A price increase also created major problems. Customers, ranging from mega-retailers such as Sears Brand Central to little mom-andpop stores, became understandably upset when they ordered a product and received an invoice with a higher price when the product arrived. Whirlpool had to issue a credit for the difference, but this created extra paperwork and worse yet, dissatisfied customers. Under this system, changing pricing on every product each quarter took over three months and was error prone. Performing the quarterly pricing required calculating new prices, reviewing them, printing them, reviewing them again, and feeding them into a mainframe-based computer system. After that, the new price lists were mailed, faxed, and sent by overnight delivery to trading partners and regional sales representatives.

To break free of the cumbersome pricing system, Whirlpool implemented a new system and streamlined work processes to make it quicker to respond to market changes or to launch a special promotion of its own. Now sales agents access a centralized pricing database for quick reference when making their calls. The new system consolidates pricing and order entry systems the entire company and halves the time it takes to reprice Whirlpools entire product line of more than 2,000 models. The result is that it is easier to do business with Whirlpool. Whirlpools information technology overhaul is spreading to other systems also. Not only is the company implementing a new corporate pricing system, it is also undergoing a massive reorganization to streamline all its business functions. Why is this necessary? To enable Whirlpool to compete with major companies such as General Electric, Maytag, Electrolux Corp. and Amana. Discussion questions: 1. How are companies using information technology to improve services, lower costs, and become more competitive? 2. What are the fundamental components associated with a successful information system? Sources: adapted from Randy Weston, Whirlpool to Try Pricing Systems. Haworth Improves Furniture and Its Order Process Haworth, Inc., is the second-largest office furniture maker in the world, with recent sales of $1.5 billion annually. Haworth operates internationally with offices, showrooms, dealers, and manufacturing facilities in virtually every global market: Europe, North America, Central America, South America, the Caribbean, Asia, and the Middle East. Based in Holland, Michigan, the international company employs 10,000 and has more than 60 showrooms worldwide. Haworth customers are both individuals and businesses. Corporations represent Haworths core business, but is also provides products to institutions, theaters, hospitals, and schools. Haworth credits its standing in the industry with its emphasis on customer needs. For example, Haworth's Next Generation Seating design team (a collection of designers, engineers, neurologists, and marketing experts) spent hundreds of hours researching how the body and mind affect one other while a person is working. And they uncovered some fascinating information: when people move while sitting they are considerably more alert and more productive. They also have fewer back problems associated with poor posture from lack of movement. Designing office space for clients can be complicated. It requires analysis of lots of variables and understanding customer needs. The baffling array of possible Haworth furniture combinations is so complex that many customers don't know exactly what they've bought until it's delivered. For example, an office chair alone could be assembled in 200 different ways with many possible color combinations. Today, the salesperson and CAD operator typically have to go through a CAD mock-up of an order several times with the sales representative returning each time to the customer to show the mock-up. Only after the last CAD mock-up is approved is the CAD workstation software used to

create a bill of materials that goes to Haworth's factory for manufacturing. What's more, having the sales representative relay information from the customer to the CAD operator sometimes allows errors to creep into the mock-up. But before the first piece of furniture even gets through a customers door, Haworths sales force will soon be using three-dimensional software to provide a preview of what the customers offices will look like, as well as an estimate of the total projects cost. On a typical $15,000 project, the system also provides pricing estimates accurate within a couple hundred dollars. Haworth has equipped sales representatives with computer-visualization software from the Trilogy Development Group. The software lets sales representatives with laptop computers show a customer exactly what's being ordered and how it will look when assembled and installed at the customers site. The Trilogy visualization software will reduce the number of sales representatives' trips back and forth between the customer and CAD operator as well as decrease the number of errors. Sales representatives who use the laptops equipped with Trilogy software can configure clusters of as many as 10 cubicles and provide the customer with a close cost estimate of what has been created on the laptop screen all without returning to the dealership. The result is that the salesperson can do `what ifs' with the client all day long. Haworth's executives hope that the Trilogy application, called the Sales Builder Engine, will shorten the company's sales cycle by eliminating some of the repetitive CAD work and repeated sales representative trips to the customers' sites. It will also make its huge parts catalog more easily understood and increase order accuracy. Haworth spent more than $1 million on the Trilogy software. The Trilogy application shouldn't be confused with traditional sales-force automation, which typically involves providing a salesperson a laptop computer and software tools for expense reporting, sales tracking, and e-mail. With the Trilogy software, Haworth is re-engineering its sales by shifting detailed parts-assembly information from the corporate level to the customer level. Haworths project is one of several the furniture company is relying on to stay competitive with its number one rival, Steelcase, Inc. That company is also pushing cutting-edge technology for its sales force. Haworth is an unusual customer for Trilogy because of its effort to get customers involved in the sales effort. Rather than wanting the salesperson to fill out a form and present the customer with a bill of materials to be ordered, Haworth wants its customers to be deeply involved in the whole process of deciding what they are going to buy.

Discussion Questions: 1. What potential problems could be associated with the rollout of this new technology? What would you recommend to avoid these potential problems? 2. What additional features and capabilities might be added to this sales support system to meet customer needs even better? Kim Girard, Want to See That Desk in 3-D? Computerworld. Liz Claiborne Upgrades Its Information Systems

Liz Claiborne designs and markets an extensive range of women's fashion apparel and accessories, with versatile collections ranging from casual to dressy. The company also designs and markets men's apparel and furnishings, as well as fragrances for women and men. Net sales for a recent year were a record $2.4 billion. It should come as no surprise to anyone who has ever tried to keep up with fashion trends, that change is driving the apparel industry today. But change is occurring more than in the design of clothes. The structure and nature of retailing and manufacturing are also shifting. Geographical boundaries are disappearing. Limitations are dissolving. Above all, consumers today look for versatility and value, and they, not the retailers or manufacturers, define what constitutes those qualities. For example, the move toward casual dress is an attempt to simplify increasingly complex lives. These shifting priorities mean consumers are less loyal to brands or to stores, but more discerning and very time-constrained. To keep pace with the rate of change, Liz Claiborne has put all business processes under the microscope. As a result it is concentrating on streamlining the things it does best and teaming with others through licensing and outsourcing arrangements to perform activities in which it has less expertise, from marketing watches to producing footwear and home furnishings. Specific corporate goals include doubling revenue to more than $4 billion by the year 2000, cutting operations costs by $35 million per year, reducing time from product design to availability, and improving communications with customers. To achieve these goals, Liz Claiborne is making a major technology overhaul that will result in replacing over 80% of its business processes, business information systems, hardware, software, databases, and network capabilities. Even ITSpeople are affected as they get training in the new technology and new roles are identified for current IS staff. A key challenge to this transformation process is surprisingly not installing or maintaining the new technology itself but aligning technology, business needs, and teaching people how to cope with the change. What many organizations dont realize is that if you dont manage the business part of a technology change, you can fail even if the technology part succeeds states Naomi Karten, an adviser to the company. Liz Claiborne has developed Web-based tools to improve communications with suppliers and retailers. A Web-based application allows retailers to track purchase orders and to check the status of transactions instantly a process that used to be done over the phone. Over 60% of customer orders are now placed electronically. The company also invested heavily in software to track materials around the world and to help communicate better with service providers, manufacturing partners, and freight consolidators. The technology changes have even affected the design process. In the past, Claiborne relied on pen-based sketches from external organizations for designs. Now the company uses sophisticated software tools to help in the design process. While the company used to fly in retailers to view its new designs, it now sends them electronically via the Web at a major cost and time savings. This networking technology permits the global transfer of textile and design information and is dubbed LizCADalyst. Discussion Questions: 1. What do you think Ms. Karten means when she says: What many organizations dont realize is that if you dont manage the business part of a technology change, you can fail even if the technology part succeeds? How does this apply to Liz Claiborne?

2. Liz Claiborne has made a substantial investment in upgrading its information systems. If you had to justify this investment to the board of directors, what would you say? Sources: adapted from Jaikumar Vijayan, IT Overhaul May Boost Fashion Profit, Computerworld, Tom Stein, Going Global InformationWeek, February 2, and Liz Claiborne Web page at: *http://www.lizclaiborne.com. Farmers Insurance Finds Higher Revenue and Lower Claims in Information Large companies process millions of transactions every year and store huge amounts of data on these transactions. Often, the data is spread across a variety of different computer systems in different areas of the country or the world. This raw data, although needed for record keeping, has little value to managers and decision makers unless it can be filtered and processed into meaningful information. The results can be a staggering increase in revenues and profits. But doing this is the real challenge. Finding strategic information from a mountain of data can be like finding a needle in a haystack, but the effort is usually worth it. With todays fast computers and a knowledgeable IS staff, the possibility of turning raw data into useful and profitable information can become a reality. This was the case with Farmers Insurance Group. Like other companies, Farmers Insurance Group was sitting on a huge amount of raw data. The data, however, was spread across different computer systems in different locations. As in all insurance companies, underwriting determines what insurance policies a company can offer and at what premiums. Farmers underwriting business was responsible for assessing insurance risk, which can make the difference between profits and losses. The people who are responsible for determining insurance risk are called actuaries. According to Tom Boardman, an assistant actuary at Farmers, As competition has gotten more intense in the insurance industry, the traditional ways of segmenting risk arent good enough at providing you competitive advantage. Boardman was referring to how most insurance companies categorize risk. For example, high-powered sports cars are more likely to be involved in expensive accidents than ordinary sedans. Thus, insurance companies can put sports cars in a different risk category than sedans and charge customers who own them a higher premium. In assessing risk, an insurance actuary would traditionally have a hunch, such as sports cars are more prone to accidents than sedans. Then the actuary would test his or her hunch using the computer. According to Boardman, this was like using the computer to dig up data to prove or UN-prove those hunches. One disadvantage of this old approach is that small, but profitable, market niches may be ignored or not priced correctly. As a result, Farmers decided to look into a computer system to help it find profitable market niches. The company found the help it needed through IBM, which developed a customized software product for Farmers called DecisionEdge. The computer system was an advanced decision support system that combined raw data from seven different databases on a staggering 35 million records. Consolidating the raw data into useful information took about twice as long as expected, but the additional wait was worth it. Farmers was able to locate market niches that it didnt see before the decision support system. For example, DecisionEdge helped Farmers determine that not all sports car

owners are alikethose who were older and had at least one other car were less likely to be in an expensive accident. Once this market niche was identified, Farmers could offer that segment of the sports car market lower premiums. Using DecisionEdge to find the market niche resulted in millions of dollars of increased revenues for Farmers. The approach used by Farmers is sometimes called data scrubbing. It allows a company to consolidate important information and squeeze additional revenues and profits from it. After helping Farmers and seeing a market opportunity, IBM also decided to offer its DecisionEdge software to other insurance companies. Discussion Questions: 1. How was Farmers able to transform its raw data into meaningful information and additional revenues? 2. Describe how this approach could be used in other industries. Sources: adapted from Hoffman, Thomas, Finding a Rich Niche, Computerworld, and Farmers Trim Paper Trail, Future Banker. UPS Turns to Technology for a Strategic Advantage People often claim that the saying you cant teach an old dog new tricks applies to old, traditional companies. It is often said that it takes a new, upstart company to take full advantage of changing times and the Internet age. Although this may be true for some old, traditional companies, it is not true for one of the oldest and most respected companies in America, UPS UPS began in the early 1900s by moving a limited number of packages in the Seattle area. The first vehicles used were Model T Fords. With its coffee-brown uniforms and vehicles, UPS has not only survived for almost a century, it has thrived. Company income for 1999 exceeded $2 billion on revenues of $27 billion. In recent years, the company has seen annual growth rates that exceed 20 percent. Today, the company moves 13 million packages daily. The companys ability to change and adapt is a key reason for its continued success for almost 100 years. According to Chief Executive James Kelly, We have to be more adaptable. We have to know when to add and when to subtract. Clearly, James Kelly, who started with UPS as a part-time driver, knows how to compute the way to success for UPS. And that way is through technology. The success has reached to all levels of the company. After a recent initial public offering, a number of long-term UPS truck drivers and other employees became instant millionaires as a result of their stock options. This long-term success story is a result of the staggering investment UPS has made in computer technology. Over the last ten years, UPS has invested about $11 billion in computer systems and related equipment. In the past, UPS could be categorized as a trucking company that used technology. Today, UPS thinks of itself as a technology company that uses trucks. All aspects of its business have been automated, with the Internet playing a central part in its long-term business strategy. Each driver, for example, uses an electronic tracking device, called a Delivery Information Acquisition Device (DIAD). Using this device, a company can track its shipment even before the UPS truck leaves its driveway. But UPS does much more than deliver packages. For example, UPS

delivers Gateway computers to customers with a cash-on-delivery system, where UPS collects payments from customers receiving Gateway computers and deposits the payments directly into Gateway bank accounts. UPS, however, hasnt always had an easy or successful time. A few years ago, the Teamsters walkout cost UPS about $200 million in lost sales. For many inside UPS, this was a wake-up call to be even more aggressive in using technology to propel the company into the next century. According to one observer of the impact of the Teamsters walkout on UPS, You never want to wound a tiger. You want to kill it, because if you wound it, it only becomes more ferocious. From all accounts, UPS is becoming more ferocious in its use of technology to increase profits and give it a long-term competitive advantage. Discussion Questions 1. Describe the history and success of UPS. 2. How was UPS able to use technology to its competitive advantage? Critical Thinking Questions: 3. How could the lessons of UPS be used in other industries? 4. If you were the CEO of another shipping company, such as FedEx, what would you do to keep your company competitive over UPS? Sources: Barron, Kelly, UPS Company of the Year, Forbes, and Bacheldor, Beth, Ford-UPS Alliance, Information Week. Federal Express Redefines Its Services to Maintain Competitive Advantage Federal Express (FedEx) with headquarters in Memphis, has a fleet of 40,000 ground vehicles and 600 airplanes. It generates annual revenues in excess of $11 billion. The firm also has an impressive information system architecture that is driving FedExs transformation from a package delivery company to a strategic provider of E-commerce, logistics, and other supply-chain services. FedEx knows that building and leveraging its information systems and networks is key to its success in the 21st century. As a result, it spends about $1 billion a year on information technology. FedEx is not only reorganizing its internal operations around a more flexible technology infrastructure, but its also attracting new customers and in many cases locking in existing customers with an unprecedented level of technology integration. Although FedEx pioneered Web package-tracking capabilities, these have now become an industry norm rather than a competitive advantage. All major transportation and delivery companies, from United Parcel Service to Ryder System, are making major investments in information technology. Where FedEx is different is that it is using information technology to transform itself from a delivery service to a vital link in todays networked and increasingly electronic economy. FedEx seeks to become a fully integrated corporate partner that picks up, transports, warehouses, and delivers all of a

companys finished goods from the factory floor to the customers receiving dock with status data available every step of the way. Large companies such as National Semiconductor Corp. have hired FedEx to handle most of their warehousing and distribution operations. Today, virtually all of National Semiconductors products, manufactured in Asia by three National Semiconductor factories and three subcontractors, are shipped directly to a FedEx distribution warehouse in Singapore. National Semiconductors order-processing application, running on an IBM mainframe in Santa Clara, California sends a daily batch of orders directly to FedExs inventory-management system running on a Tandem computer in Memphis. At this point, FedEx takes over the orders are forwarded to the FedEx warehouse management application in Singapore, where they are fulfilled in a FedEx warehouse and shipped directly to customers via FedEx. Except for receiving a confirmation that the order was filled, National Semiconductor is done with the order transactions. National Semiconductor has gained significant benefits: the average customer delivery time has been reduced from four weeks to seven days, distribution costs have been cut from 2.9% to 1.2% of sales. In addition, seven regional warehouses in the United States, Asia, and Europe were closed saving National Semiconductor costs for warehouse space and employees. The tight information technology links between FedEx and National Semiconductor exemplify FedExs strategy of technology integration with its corporate customers. FedEx stores the product, operates the warehouse, and processes the order and then hands it off to the carrier which, of course, is FedEx. FedEx is not alone in using information technology to move beyond package delivery. UPS, which has spent $9 billion on IT since 1986, has already formed five alliances to help disseminate its logistics software among E-commerce users with UPS providing order-entry, catalog, and inventory management. Ryder System has formed an alliance with IBM and Andersen Consulting to deliver logistics services to customers. IBM will lend technology expertise and Andersen its consulting personnel to Ryder projects worldwide. Discussion Questions: 1. What is meant by strategic competitive advantage? 2. How can information technology help a company to gain and maintain a strategic competitive advantage? Sources: Monua Janah and Clinton Wilder, Special Delivery, Informationweek,; and FedEX Web site at:*http://www.fedex.com Textron Outsources IT Services Textron Inc. has its headquarters in Providence, RI and ranks 130th on the Fortune 500 list of U.S. companies with annual sales over $10 billion, assets of $18.6 billion; 64,000 employees; and a diverse, global customer base. Founded in 1923, Textron has expanded globally to provide customers worldwide with better value and improved service. Today, Textrons customers and shareholders benefit from the

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company's leadership positions in a diverse mix of business segments: aircraft including Cessna Citation business jets and Bell commercial helicopters (29% of revenue); automotive including instrument panels, plastic fuel tanks and plastic interior and exterior trim (17% of revenue); industrial including fasteners, golf cars, turf-care equipment, hand and machine tools (24% of revenue); and finance including global consumer and commercial (30% of revenue). Textron's strategy for consistent growth is that it actively manages its mix of market-leading businesses to produce consistent earnings and revenue growth and to provide excellent returns to shareholders in constantly changing industry and economic environments. Textron plans to build upon its core business segments and execute four strategies for growth: 1. Invest in new products - About $1 billion per year is invested in R&D and capital expenditures. 2. Expand into international markets - In 1997, 39 percent of total revenues were generated outside the U.S. 3. Make strategic acquisitions - 12 market-leading businesses within its core segments have been added to Textron's family of companies since the beginning of 1997 4. Drive operating excellence Improve its operating margin by focusing on costs, quality and operating efficiency. Textrons Chief Information Officer (CIO), Bill Gauld, has made sure his companys Information Technology systems and networks enable the company to launch new products ahead of its competition. However, he has had lots of help. Gauld has turned to a number of outsourcers to build advanced information systems for Textron. AT&T Solutions, Inc. handles Textrons corporate network. IBM takes care of network security and intranet applications. EDS which handles its corporate office IT services, includes software support and corporate services.

Discussion Questions: 1. What principles might Bill Gauld follow in deciding whether a particular service should be performed by internally or whether it should be outsourced? 2. Is outsourcing consistent with Textrons strategies for growth? Can you see any inconsistency? Sources:Esther Shein, A New Flight Plan, PC Week, and Textron, Inc. Web site at: *http://www.camcar.textron.com. Black & Veatch Uses Software Tool to Compete Globally Black & Veatch is one of Kansas City's largest engineering firms and was founded in 1913. The firm specializes in civil engineering projects, including waterworks, highways and bridges, utilities, and sewerage. The firm epitomizes the reach and diversity of a global engineering/construction firm. It is working on the largest ozone disinfection project in North America, developed the first modern coal-fired power plant

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in Central America, and just completed the world's newest Planet Hollywood and the reconstruction of a 15th-century building to a five-star, 72-room U Sixtu Hotel in the heart of Prague's Old Town Square in the Czech Republic. With revenue of $1.4 billion, Black & Veatch is a relatively small engineering consulting firm that competes against behemoths such as Raytheon ($11.7 billion) and Bechtel ($8.5 billion). One of the tools it uses to remain competitive is Powrtrak, a database about every component of a project, from the supplies used, to shipping times, to how long each part of the project takes, to partners involved in a project. It bridges all project management disciplines, including civil, chemical, electrical, mechanical, and structural engineering; project scheduling; cost estimating; procurement; and construction management planning. Each component of a project is given an identification code in the Powrtrak database and is tied to the requirements for a achieving a particular function. For example, if the user decides that a 10-inch copper pipe to transport water to a boiler is too small, Powrtrak generates reports to ensure that every item associated with the pipe is changed, along with the schedules for installation of the system. Without this, designers can change the pipe to a 12-inch pipe, but the valves stay at 10 inches, and the project is suddenly in trouble. This ability to automatically generate change reports to everyone affected slashes project costs. Powrtrak also enables Black & Veatch engineers to respond to changes suggested by customers. A customer can ask for a change in the performance, and Black & Veatch engineers can quickly determine the impact on design, cost, and schedule. Discussion Questions: 1. Does the Powrtrak software provide Black & Veatch with a strategic competitive advantage? Why or why not? 2. Is it possible that larger engineering firms such as Raytheon or Becthel have similar tools, but are not getting as much value from their use as Black & Veatch? How could this be possible? Sources:Black & Veatch homepage at *http://www.bv.com/ and The Art of Innovation, Informationweek.

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