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S. R.

LUTHRA INSTITUTE OF
MANAGEMENT

"MANAGING INFORMATION SYSTEM"

PART A:-CASE STUDYS


PART B: - IS USED BY LI&FUNG

MBA (SEM-2)
CLASS-B1
SHIFT-1

Submitted By:-
Roll no. Name

167500592117 Viral Upadhayay


167500592123 Yash Singapuri

Submitted To: - MS. Esha Pandya


Case study

FACEBOOK: MANAGING YOUR PRIVACY FOR THEIR


PROFIT

Facebook is the largest social networking site in the


world. Founded in 2004 by Mark Zuckerberg, the site
had over 500 million worldwide users as of October
2010, and has long since surpassed all of its social
networking peers. Facebook allows users to create a
profile and join various types of self-contained
networks, including college-wide, workplace, and
regional networks. The site includes a wide array of
tools that allow users to connect and interact with
other users, including messaging, groups,

photo-sharing, and user-created applications.

Although the site is the leader in social networking,


it has waged a constant struggle to develop
viable methods of generating revenue. Though many
investors are still optimistic regarding Facebooks
future profitability, it still needs to adjust its business
model to monetize the site traffic and personal

information it has accumulated.

Like many businesses of its kind, Facebook makes


its money through advertising. Facebook represents
a unique opportunity for advertisers to reach highly
targeted audiences based on their demographic
information, hobbies and personal preferences,
geographical regions, and other narrowly specified
criteria in a comfortable and engaging environment.
Businesses both large and small can place advertisements
that are fully integrated into primary features
of the site or create Facebook pages where users can
learn more about and interact with them.
However, many individuals on Facebook arent
interested in sharing their personal information with
anyone other than a select group of their friends on
the site. This is a difficult issue for Facebook. The
company needs to provide a level of privacy that
makes their users comfortable, but its that very
privacy that prevents it from gathering as much
information as it would like, and the more
information Facebook has, the more money it earns.
Facebooks goal is to persuade its users to be
comfortable sharing information willingly by
providing an environment that becomes richer and
more entertaining as the amount of information
shared increases. In trying to achieve this goal, the
site has made a number of missteps, but is

improving its handling of users privacy rights.

The launch of Facebooks Beacon advertising


service in 2007 was a lightning rod for criticism of

Facebooks handling of its private information.

Beacon was intended to inform users about what


their friends were purchasing and what sites they
were visiting away from Facebook. Users were angry
that Beacon continued to communicate private
information even after a user opted out of the
service. After significant public backlash and the
threat of a class-action lawsuit, Facebook shut down
Beacon in September 2009.
Facebook has also drawn criticism for preserving
the personal information of people who attempted to
remove their profiles from the site. In early 2009, it
adjusted its terms of service to assign it ownership
rights over the information contained in deleted
profiles. In many countries, this practice is illegal,
and the user backlash against the move was swift.
In response, Facebooks chief privacy officer,
Chris Kelly, presided over a total overhaul of
Facebooks privacy policy, which took the form of an
open collaboration with some of the most vocal
critics of the old policies, including the previously
mentioned protest groups founders. In February,
Facebook went forward with the new terms after
holding a vote open to all Facebook users, 75 percent
of whom approved. The site now allows users either
to deactivate or to delete their account entirely, and
only saves information after deactivation.
In late 2009, tensions between Facebook and its
users came to a head when the site rolled out new
privacy controls for users, but had adjusted those
settings to be public by default. Even users that had
previously set their privacy to be friends-only for
photos and profile information had their content
exposed, including the profile of Zuckerberg himself.
When asked about the change, Zuckerberg explained
that the moves were in response to a shift in social
norms towards openness and away from privacy,
saying we decided that these would be the social
norms now and we just went for it.
The fallout from the change and is still ongoing,
and more privacy problems keep cropping up. In
October 2010, Facebook unveiled new features giving
users more control over how they share personal
information on the site with other users and
third-party applications. These include a groups
feature allowing users to distinguish specific circles
of friends and choose what information they want
to share with each group and whether the groups are
public or private.

Shortly thereafter, a Wall Street Journal investigation


found that some of the most popular Facebook
applications (apps) had been transmitting user IDs
identifying information which could provide access
to peoples names and, in some cases, their friends
namesto dozens of advertising and Internet
tracking companies. Sharing user IDs is in violation
of Facebooks privacy policies.
All these privacy flaps have not diminished
advertiser interest. Facebook serves ads on each
users home page and on the sidebars of user
profiles. In addition to an image and headline from
the advertiser, Facebook ads include the names of
any users friends who have clicked on a button indicating
they like the brand or ad. A Nielsen Co. study
found that including information about individuals a
person knows in an ad boosted recall of the ad by 68
percent and doubled awareness of a brands message.
To determine what ads to serve to particular people,
Facebook abstracts profile information into keywords,
and advertisers match ads to those keywords.

No individual data is shared with any advertiser.

However, its still unclear how much money is


there to be made from advertising on Facebook.
The site insists that it doesnt plan to charge its
users any kind of fee for site access. Facebooks
2010 revenue was expected to approach $1 billion,
which is a far cry from a $33 billion private market
valuation. But the site has already become a critical
component of the Webs social fabric, and Facebook
management insists that its unworried about profitability

in 2010 or the immediate future.


1. What concepts in this chapter are illustrated in this
case?

The first concept is E-commerce, because Facebook is an


internet born company. E-commerce is the use of the internet
and the Web to conduct business. However the case goes a
little deeper because it involves concepts that are part of the
basic construct of e-commerce. Facebook is ubiquitous, which
means it use internet and web to conduct the business, you can
access Facebook from everywhere, even a cell phone. The
access to this service is limitless. Richness is the complexity
and content of a message, you can upload video, audio and
text messages simultaneously to large number of people.
Interactivity, it means how e-commerce allows for two-way
communication, Facebook works through interaction with the
users. Information density which is the total amount and quality
of the information available to all market participants,
consumers, and merchants and Finally,
personalization/customization which is how merchants can
target their messages to specific individuals to promote their
products

2. Describe the weaknesses of Facebooks privacy policies


and features. what management, organization and
technology factors have contributed to those weaknesses?
Facebook's policies are not weak, but they have made weak
decisions that have damaged their security credibility. Their
weakness comes from the introduction of Beacon, the
mishandling of News Feed, and the inefficient methods of
deleting an account. Beacon was program that shared users'
purchase information and what sites they were visiting with
their friends automatically because it was initially a chosen
program. News Feed is a program that was suddenly
introduced to the Facebook users that shares actions with
everyone on the Facebook Web. Finally, it was next to
impossible to delete an account that a user no longer wanted to
use. All three areas that involved personal information and
privacy was met with resistance. The Beacon program caused
Coca-Cola and Overstock.com to pull their advertising and
support away from Facebook. Facebook CEO Zuckerberg had
to publicly apologize and explain to the users about News Feed
to usurp a possible firestorm. Finally, Facebook had to improve
their technology to in order to allow the consumers to delete
their accounts. A lack of interaction with their users is what led
to the weakness in their policies and procedures. Each action
was not formally presented and outlined by the company. In
each instance, they only fixed the problem after damage had
occurred. Ultimately, it was their faulty decision making that
was the weakness in their privacy policies.

3. List and describe some of the options that Facebook


managers have in balancing privacy and profitability. How
can Facebook better safeguard user privacy? What would
be the impact on its profitability and business model?
Facebooks most valuable property is also the thing it cant
afford to sell: personal information. In terms of advertising,
Facebook knows the advantages at the negotiating table
because they have a large treasure of potential customers. The
only reason why they have a large about is because customers
are trusting them to protect their privacy so they can interact at
their own discretion. Consequently, Facebook users give them
power position, and so their privacy will never be breached.
However, it will allow the vendors to present their goods and
services by selling ad space on the site. The site has over 118
million people who can see their advertisement and click the
link to get more information, or make a purchase. To be the
number one site on the internet, Facebook have to protect the
users who built the name, reputation, and business.

4. Do you anticipate that Facebook will be successful in


developing a business model that monetizes their site
traffic? Why or why not?

Facebook did not always have a lasting business model, but


now they have one that could be successful. Facebook is
following a trend that has been benchmarked by the iPhone
and iPod markets by creating applications that complement the
base program. When Facebook Platform introduced, it was an
effort to open up its site to third-party developers to become a
platform for their applications. This is a perfect marriage
between developers and Facebook because the developers
want exposure for their technology and products, while
Facebook has network of over 118 million potential clients of
the developers. As a result, the site is more engaging, and
more innovative than ever before. In March 2008, Facebook
launched new privacy protocols that placed more control of
privacy content in the hands of the users. Users control who
has access to the site, and what information the visitors will
have a chance to view. Their growth has led Microsoft to
purchase a stake in the company which increased its value to
$15 billion. With all of their good news, it is imperative for
Facebook to drive innovative application creation, and vigilantly
protect the privacy of their users.
Case study

Intellinet Datasys creates mobility solution


inhouse, looks to offer it globally

Efficiency or security? It's a trade-off many enterprises face.


But in the attempt to jack up its army of foot soldiers, Intellinet
Datasys needed both.
The technology solution provider deals with partners and
agents who bring in business without being on the company's
rolls. This field force needs computing devices to manage and
monitor its workflow. Providing devices to this floating
workforce, however, comes with a steep price tag. Besides, the
nature of this workforce makes it improbable to roll over the
devices to others in the organization. And the challenges don't
stop at that. Giving field force an access to business application
on their device can open a can of worms. With unauthorised
access to business apps, the situation can spin out of control.
That threw this option out of the window. But at the same time,
it opened another window of opportunity: rolling out an
enterprise mobility project.
Steady hand on the tiller:-
Sharat Airani, Director- IT & CSO at Intellinet Datasys was
mindful of the limitations before his organization. Tactfully
manoeuvring these hurdles, he clubbed together enterprise
mobility and BYOD to answer the field force woes of Intellinet
Datasys.
Airani along with his IT team created an inhouse mobile
solution, Mobi-Flex that delivers any Windows server
application to mobile devices including IOS, Android, Kindle
Fire, and Blackberry and Surface and Windows/Mac machines
in a safe, secure manner. "We set a standard from the OS
standpoint. The device had to be an Android 4.0 and above or
iPhone 5.0 and above. We then allowed the field staff to
securely attach their personal device to another's network for
access to application(s) for usage," he says.
Despite all the hand-wringing over mobility initiatives, Airani
swears that CIOs can steer through the roadblocks by crafting
a comprehensive mobility strategy that addresses the areas of
concern.
At Intellinet Datasys, Airani did just that. Security was baked
into the mobile initiative.
The Windows based server solution uses patent pending
technology that leaves no trace of data of any nature on the
device. Mobi-Flex dynamically analyzes each graphical object
of the Windows Presentation Manager (WPM) and turn it into
compressed images which are sent to the mobile device or
desktop system. This is all done over one single dedicated non-
standard port number and by doing so, robots, sniffers or
hacking algorithms turn blind and cannot detect any backdoor
because it uses its own patent pending protocol. RDP, Terminal
Services or Terminal Service Server is not used or needed this
increases the security significantly.
"Mobi-Flex uses Windows authentication to provide an
application panel to the user that displays icons for the
applications the user has access to. When the user selects an
application, they are provided with only the view of the
application and no opportunity to reach a desktop. However, if a
full desktop access is desired for selected individuals, those
individuals can be provided such access with a different
solution access application that will display in their application
panel. This application provides the same secure environment
as an individual application does. It has the ability to remotely
wipe all data off from the mobile device when it is not in use,"
shares Airani.
The solution is targeted at the accounting and finance
departments for collection, marketing to update and know the
order status and customer service / support for real-time update
to back office and to get instant approval for the repairs etc.
The Payback:-
Mobility helped Intellinet Datasys balance efficiency's ying with
security's yang. And the benefits have been remarkable. For
starters, it saved the organization wads of cash. Mobility pruned
the opex by 12 percent. With reduced travel cost, real-time
update, visibility at the back office enabling just-in-time
decision, the company realized handsome savings on opex.
The initiative has created a mobile nirvana for the field force.
They can make faster, more informed decisions at the point of
action by getting the data they need. The field force has
reduced its travel time by 50 percent. This led to a better work-
life balance and notched up their productivity by 22 percent.
With the mobility initiative, Intellinet Datasys has created a
dynamic and nimble field force.
And the project will set cash registers jingling by creating a
new revenue stream for Intellinet Datasys. Airani explains,"
Some of our partner companies noticed our field force using the
mobility solution. Impressed with the results, they demanded it
for use within their enterprise. So we decided to tap into the
demand. We are going to market with a cloud based enterprise
mobility solution. This internal project helped us tap into a new
revenue stream. It will be a huge benefit for the company."

What technology factors contribute to


these case?

Vehicle Tracking

Real Time Tracking with Admin Login


Daily Route Analysis
Estimated time of Arrival - ETA
RFID Reader with Cards
Speed Alert

Field Staff Managment

Need based Information on fingertips


Real time Billing and assignments
Image capture with time & location stamp
Real time GPS tracking of field staff
Attendance by smart-phone application

Enterprise Mobility

RFID Linked Tracking


BYOD Solutions
Enterprise Mobile Apps
Real time tracking of field staff by GPS enabled smart-
phone

How secure is the server ?

The Windows based server solution uses patent pending


technology that leaves no trace of data of any nature on the
device. Mobi-Flex dynamically analyzes each graphical object
of the Windows Presentation Manager (WPM) and turn it into
compressed images which are sent to the mobile device or
desktop system. This is all done over one single dedicated non-
standard port number and by doing so, robots, sniffers or
hacking algorithms turn blind and cannot detect any backdoor
because it uses its own patent pending protocol. RDP, Terminal
Services or Terminal Service Server is not used or needed this
increases the security significantly.
INFORMATIONSYSTEM:LI&FUNG
TRADINGCO.

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).

INTEGRATED STRATEGIC MANAGING INFORMATION


SYSTEMINLI&FUNG:

Every company for rising up in their business should have a


competitive nature in them , and this is achieved mainly by
introducingthenewstrategyfromtimetotimewhichenhances
their performance to a greater extent. Their achievements
are mainly obtained by effectively utilizitation of their
resources with the help of proper information technology.
Byadoptingsomepropertechniquesthecompanycanhavea
goodsuccesswithhugeproductivity,profitabilityandgreat
rise in the organization revenue which in turn help the
company in its growth in the market share (Kenneth C et.al,
2009).
Launching of MIS/IT in the Li & Fung organisation was of
great achievements for them in their growth and also gave
themgreatopportunitytocopeupwiththemoderntrends
andfashionbymakingtheirworkinafastway.TheCompany
as it started to advance into a more sophisticated one with
having 48 offices in 32 countries, it started to provide the
necessaryservicesfromaboundlessmanufacturerthroughout
the chainof supply. The benefits that the customers of Li &
Fungs enjoyed were customization of supply chain, less
inventory costs and short time after the order, as the
organization was a middle man in the entire operation it
retainedReducedmatchingandcreditrisks,theyalsoputforth
the best Quality assurance and finally with a standardised
globalsourcingnetwork,thecustomerswereofferedlesscost
andhighreliablesourcingbyLiandFungthantheopponents
did. Since Camberley acquisition (1999) Li &Fung started
offering clients current fashion and market trend
information regularly via virtual manufacturing or product
design services using their information technologies which
provedtothemveryusefulintheirbusiness.
Astheinternetrevolutionstartedbecomingacommontrend,the
Fungbrotherswereveryquicktoadapttothenewtechnology
and implement it in their organisation. They were of sure
that the internet was something of great importance and
found out the various possible positive and negative
impactsitcouldhaveonthefirm(staffKathySchwalbe,
2010).Also for direct electronic linkage via internet. The
introductionofintegratedMISintheorganizationhadbrought
by many benefits. It helps to overlook into the production
processasitissystematicallycoordinatedwhichstartfrom
raw materials to finished goods all the way. (William J,
2002).Applicationofinternetandextranetplayedamajorrole
inthegrowthoftheorganization.

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

In total the MIS system at Li & Fung is mainly to


coordinate and control the major internal and external
information of the globally located company as well as to
manage the work with their customers, manufactures, and
logisticfirms(Mcfarlan,W.&Young,F.2005).

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 :-

Essentials of Management Information Systems Book by Jane


Laudon and Kenneth C. Laudon, Chapter 10, pg 390

http://cio.economictimes.indiatimes.com/news/case-
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inhouse-looks-to-offer-it-globally/51117000

http://courseworkshub.com/assets/uploads/course_work_
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