Innovating To Create IT-Based

New Business Opportunities at

United Parcel Service
Agenda
n UPS’s Business Strategy
n Key Findings 1: How UPS Identify New Business
Opportunities (NBO)
n Key Findings 2: What Framework UPS Uses To
Create NBO
n Comment
n The Leavitt Model of Organisation
n Lesson learnt
n Environment Scanning
n Questions
UPS’s Business Strategy

n “Synchronise commerce”


n Use of technology to create new services

and to strengthen its operations in its
value network
n
Key Findings 1: How UPS Identify
New Business Opportunities (NBO)
Produc
ers
NBO2 NBO3

UPS’s Internal Value Chain

Supplie Distribu
rs tors

NBO1
NBO2 NBO2 NBO4
NBO5
Flow of goods

End Flow of Information

Consumer NBO New Business Opportunities

 Key Findings 2: What Framework
UPS Uses To Create NBO
Box 7
Organisation
Box 2 al
IT Assets Infrastructure
Box 1 Box 4 Box 5
Informatio Business New
n Capabilitie Business
Technolog s Opportunities
y Box 6
Investment Box 3 Complimentar
IT y Assets
Competencie
s
 Key Findings 2: Example – NBO 1

Box 7
Organisation
Box 2 al
Package Infrastructure
Box 1 Level Box 4 Box 5
Automated Detail Understand New
Operationa (PLD) Cost Business
l Systems Structure Opportunities
: Outsource
Box 6 Rural
Box 3 Complimentar
Mining Data y Assets Deliveries to
in the a
warehouse Competitor
 Key Findings 2: Example – NBO 5

Box 7
Organisation
Box 2 al
Integrated Infrastructure
Box 1 Supply Box 4
Deliver Box 5
Enterprise Chain direct to New
Resource end Business
System customers Opportunities
Box 3 :
Coordinating Box 6 Do
Complimentar
multi modal y Assets Customer’s
shipments Work for
and providing them
customers
with deep
Comment
Critique/Comment
The Leavitt Model of
Organisation
Environmen
t

Environment
Lesson learnt
Environment Scanning
Steps in Deploying NBO at UPS
Question 1: Can there be improvements ?
Suggested answers

Environment Scanning

REVIEW DOCUMENTATION
Question 2
What are the possible IT enabled innovation risk

n In the article, these are the risks mentioned:

n Resource-intensive process
n Costmay exceed benefits in investing
n competitive advantage may not result

n Lock-in by infrastructure
n limit
the creation of future business
opportunities
n Imitation/ second mover advantage (UPS
copied FedEx)
n Risk averse management
n Unable to capitalize on opportunities
n
Question 2
n What are the possible IT enabled innovation
risk?
n Rejection from consumers
n Non-IT savvy customers
n No additional benefits

n Rapid expansion
n Employees lack the knowledge
n Toyota downfall
n Incapability of sustaining cost
n Walmart’s RFID idea
n