Strategic Information System for Ferrari: A Business Analysis Report

This report examines the strategic information system (SIS) of Ferrari, a leading luxury sports car manufacturer. It begins with an overview of Ferrari and its industry, followed by an analysis of the various information systems used at different levels, including Executive Information Systems (EIS), Management Information Systems (MIS), and Transaction Processing Systems (TPS). The report then delves into Ferrari's value chain model, identifying how the company gains competitive advantages through cost management and differentiation. It explores how Ferrari extends its value chain, virtual value chain, supply chain management (SCM), and CRM using IS/IT solutions. The report also discusses how IS/IT has changed Ferrari's business operations, enabling it to compete and survive in the automotive industry. Finally, it identifies potential areas where strategic IS/IT can provide Ferrari with a competitive advantage in its operating environment. The report provides a comprehensive analysis of Ferrari's strategic use of information systems and their impact on its business performance.

Running head: STRATEGIC INFORMATION SYSTEM
Strategic Information System: Ferrari
Name of the Student
Name of the University
Author’s Note:

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Executive Summary
The main aim of this report is to understand the concept of strategic information system for the
organization of Ferrari. Strategic information management is a specific salient characteristic in
the information technology and it is helpful for various organizations and businesses to
categorize, store, process as well as transfer the data, created and received by them. Moreover, it
is also helpful for enabling the classification of various opportunities for the utilization of
information systems for separate strategies. It provides the surety that only useful resources are
being allocated to the applications in the most sustainable way. This report has identified
different processes of information systems providing advantages to Ferrari.

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Table of Contents
1. Introduction..................................................................................................................................3
2. Discussion....................................................................................................................................3
2.1 Brief Description of the Organization with its Industry Sector.............................................3
2.2 Identification of the Various Systems in Use at every Level for understanding Information
System solutions..........................................................................................................................4
2.3 Identification of the Process of Value Chain Model evolving in the Company....................7
2.4 Identification of the Process of the organization using IS/ IT for extending its Value Chain,
Virtual Value Chain, Supply Chain Management and CRM......................................................8
2.5 Identification of the Process of IS/ IT changing the way it does business and enabling it to
Compete and Survive in the Industry Sector.............................................................................10
2.6 Identification of Different Potential Areas where strategic IS/ IT can enable Competitive
Advantage for the Organization in the Industry Sector and its Operating Environment...........11
3. Conclusion.................................................................................................................................12
References......................................................................................................................................13

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1. Introduction
Strategic information system or SIS can be referred to as the type of information system,
which is being established in the responses to few business business initiatives (Dutta, Geiger
and Lanvin 2015). This type of system is intended to provide distinct competitive benefits to the
company and it eventually deliver any particular product and service that is at a low expense for
emphasizing on a distinct market segment and even is innovative or creative in nature. It even
offers various tools to help out organizations in applying different analytical tools and metrics to
the repositories of information for allowing them in recognizing major opportunities for better
growth and also pin pointing various methods for improvement of operational efficiency
(Schwalbe 2015).
A strategic information system is majorly developed for ensuring that the technological
approach within the business is highly strategy oriented and would be gaining maximum
competitive advantages easily and promptly (Lloyd 2017). Due to the resourceful opportunities,
operations are enhanced to a high level and proper data management could be done with
effective data presentation as well as analyses. This report will be outlining a brief description on
strategic IS for the popular and noteworthy organization in the automobile industry, Ferrari with
relevant details related to various systems, value chain analysis and competing in the industry
sector.
2. Discussion
2.1 Brief Description of the Organization with its Industry Sector
Ferrari is one of the most significant and important luxury sports car manufacturer that is
based in Italy. The organization was eventually founded by Enzo Ferrari in 1939 and the first car

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was built in the year of 1940 (Ferrari.com. 2020). It belongs to the automotive industry and the
organizational inceptions as the auto manufacturer got its recognition in the year of 1947, as soon
as the first Ferrari badged car was being completed. The headquarters of Ferrari is in
Amsterdam, Netherlands and they had been serving their clients in the entire world. The
organization has always gained maximum success and the total revenue of this organization had
been 3.418 billion euros in the year of 2017 (Ferrari.com. 2020).
Ferrari is the part of the automotive industry and it comprises of a wider range of
different organizations and companies that is involved in the designing, development,
manufacturing, marketing as well as selling of various motor vehicles. The entire automotive
industry is one of the largest economic sectors within the world by revenues (Ferrari.com. 2020).
It does not include different industries that are dedicated to the overall maintenance of
automobiles following the delivery to the end users. In current situation, the industry is sharing
their services and products to different parts of the world and is also focusing on the benefits to
be provided to them.
2.2 Identification of the Various Systems in Use at every Level for understanding
Information System solutions
The organization of Ferrari has been using few of the most important and significant
systems within their business in each and every level of the business for ensuring that the
business processes and activities are being executed in the most efficient manner (Baller, Dutta
and Lanvin 2016). They have been using three types of distinct and important information
systems, which have been extremely effective and efficient for their business processes. The
pyramidal structure for understanding these distinct information system solutions in the business
of Ferrari is provided in the following paragraphs:

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Figure 1: Different Types of Information Systems in Pyramid Model for Ferrari
(Source: Marchewka 2016)
The description of these three information systems with explanation about the decisions
is provided below:
i) Executive Information Systems: The first as well as the foremost type of IS for this
particular company of Ferrari is executive information system or EIS (Sittig and Singh 2015). It
is the top level in the pyramid and they have been using this particular information system for
taking any type of strategic decision in their business. These strategic decisions are mainly
concerned with the entire environment, where the firm is operating and dealing with different
resources for forming an interface within the organizational members and resources (Xiang,
Magnini and Fesenmaier 2015). An EIS is the specific type of management support system,
which is responsible for proper facilitation and providing support to the senior executive

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information as well as requirements for decision making procedure. As a result, it provides easier
accessibility to the external as well as internal information, which is highly relevant to the
respective organizational goals. Ferrari is able to emphasize on the graphical display and easy to
utilize user interface with the help of this type of information system (Tarafdar et al. 2015). It
would offer stronger reporting as well as drilling down abilities and this particular system is
required for highlighting the trends in the most vital variables, so that they could easily monitor
performances and recognize major problems and opportunities.
ii) Management Information Systems: The second level of the pyramid of information
systems of Ferrari contains management information systems or MIS. This MIS is the computer-
based system, which consists of both software as well as hardware that serves as the major
backbones of the company based operation (Avgerou and Walsham 2017). The MIS can easily
gather data from several online systems, complete analysis of the information and then report
that data for assisting in managerial decision making process. It is extremely beneficial for
Ferrari to improve their decision making, which is quite important for them as they belong to the
automotive industry (Wu, Straub and Liang 2015). As a result, the most accurate data on a
variety of organizational assets, such as financials, project timelines, manufacturing, inventory,
marketing, research and development and real estate. This particular information system is
responsible for helping in the tactical decisions. These decisions are referred to as medium
termed decisions that span within 6 months or 1 year. Such decisions are being made in the
limitations of the predominant strategy based supply chain decision, which is required for an
automobile company (Stein et al. 2015).
iii) Transaction Processing Systems: The final level of the pyramid of information
systems of Ferrari contains transaction processing system or TPS. It is the collection of

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information that processes different data transactions within the database systems, which monitor
various transaction plans (Cui et al. 2015). The respective system is extremely helpful when
anything is being sold over the Internet connection. It eventually enables for a specific delay in
time within the time of an item to be sold to the time when it is actually getting sold. Since
Ferrari is an extremely expensive car manufacturing company, it is quite vital and noteworthy for
them to include TPS in their business. The operational decisions are being undertaken by them
with TPS (Gelinas, Sutton Jr and Federowicz 2019).
2.3 Identification of the Process of Value Chain Model evolving in the Company
Ferrari has been able to evolve their business with the help of value chain model. This
type of analysis could be helpful for them to identify distinct activities and then develop these
areas for getting a stronger competitive edge over their competitors (Passey and Samways 2016).
The generic strategies to achieve different competitive benefits in Ferrari are provided in the
following paragraphs:
i) The organization had been able to manage different cost advantages through value
chain analyses. Ferrari could gain the cost benefits by decreasing the expenses related with
different activities of value chain (Saunders and Brynjolfsson 2016). It required them to firstly
map different activities and then relate the expenses for making up every necessary adjustment.
They have been able to use the tool for negotiation of the best expenses and increment the out
bound and in bound conveyance procedures. As a result, they are able to reduce the marketing
expenses and then offer the product at the most affordable cost.
ii) Ferrari had been able to gain different cost drivers for value chain analysis for adding
values, setting differential basis as well as enhancing efficiency and effectiveness (Aasheim, Li
and Williams 2019). The major drivers, which add value include organizational policies,

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integration, timing, economies of scale, linkage, learning and spill over and capacity utilization.
The perceived value of the customers is being highlighted in this particular organization of
Ferrari.
iii) Differentiation through primary value chain activities is also being involved with this
particular analysis and hence make sure that better efficiency as well as effectiveness is being
obtained from each and every aspect and then create major logistics features subsequently (Abu-
Naser et al. 2015). The major operations that are being obtained in the business of Ferrari include
flexible manufacturing systems, wider product ranges, improvised product appearances, quicker
response to the most unique specification, improvised customers’ satisfaction and many more.
The outbound logistics and marketing and sales are also being considered on top priority by
Ferrari.
2.4 Identification of the Process of the organization using IS/ IT for extending its Value
Chain, Virtual Value Chain, Supply Chain Management and CRM
Ferrari, being one of the leading organizations in automobile industry has implemented
some of the most significant important solutions of IS and IT to eventually extend their value
chain, virtual value chain, SCM and CRM.
i) Value Chain: They have been using different systems of information technology
within the value chain, since each and every activity creates as well as utilizes information. The
subsequent presence of these distinct systems of IT within every business of the generic value
chain is quite vital for Ferrari for the multitude of activities that are being designed for achieving
the specific purpose (Bessen 2017). Moreover, they had been gaining maximum competitive
advantages through usage of such solutions like executive information system and management
information system.

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ii) Virtual Value Chain: Ferrari has also been able to utilize different solutions of
information technology or information systems for their virtual value chain. It is helpful for them
in the holistic overview of physical values and hence making it quite effective as well as
efficient. The respective information systems have the capability to capture information from
each and every part of the value chain (Akman and Mishra 2015). As they are doing business in
the entire world, it is needed for them to include virtual value chains in their organization. This
particular information is being used for optimization of performances at every stage. The virtual
value chain is the business model that provides description for the overall distribution of
different value generating information services.
iii) Supply Chain Management: Ferrari has also been able to utilize information
technology in their supply chain management for providing improved accountability as well as
visibility. This type of information technology utilization could bring the required transparency
into the entire procedure and it has allowed Ferrari for having better control over their flow of
products and information across the supply chain (Melián-González and Bulchand-Gidumal
2016). IT is important for supporting operational as well as strategic decisions for enhancing
supply chain logistics by giving real time data about the inventory level, production requirements
and product availability.
iv) Customer Relationship Management: Moreover, Ferrari has also been able to use
information technology and information system in their business for enhancing their chance of
customer relationship management or CRM. Technology serves as the major partner of CRM for
the core purpose of catering major needs of their customers. Ferrari has been able to make their
relationship quite effective in such a manner that the organization is understanding the
requirements of customers and making faster communication (Passey and Samways 2016). It is

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needed for them to ensure that the organization is maintaining a positive relation with their
customers.
2.5 Identification of the Process of IS/ IT changing the way it does business and enabling it
to Compete and Survive in the Industry Sector
Ferrari is one of the most significant and popular automobile manufacturing
organizations in the world. They have utilized information technology in their business for
changing the method of their business conduction and enabling it to compete as well as survive
in the respective industry sector (Stein et al. 2015). They have been using such distinct solutions
of IT and IS for solving the issues and complexities of customer services for the core purpose of
cutting their order entry expenses and also to provide high flexibility to the customers within the
time as well as the procedure to submit orders. The respective system is responsible for yielding
larger competitive advantages, adding extra value for the customers and ensure a substantial rise
in the sales.
The resulting sharp increment in the organizational market share forces a significant
competitor into the corporate reorganization and maintain their position in the industry sector of
automobile (Avgerou and Walsham 2017). Ferrari had even utilized this type of technology in
competing with other distinct car manufacturing companies like Lamborghini, BMW, Audi and
many more. With the help of EIS and MIS, it would had been easier for them to ensure that
strategic and tactical decisions are well executed without much complexity. Moreover, with the
help of transaction processing system, Ferrari had been able to take up subsequent decisions
related to the business operations in the most effective manner. The technology has provided
them with a single and one time chance for the business for deployment of the assets and

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thinking it as a strategy. Furthermore, the entry barriers are easily identified by them, before
entering into a new market (Tarafdar et al. 2015).
2.6 Identification of Different Potential Areas where strategic IS/ IT can enable
Competitive Advantage for the Organization in the Industry Sector and its Operating
Environment
Ferrari can be able to identify some of the most distinct and noteworthy potential areas, in
which the strategic information system or information technology could allow competitive
advantages for their business within the entire automobile industry as well as its operating
environment (Marchewka 2016). It helps to change the overall industrial structure by simply
altering the competition riles and creating competitive advantages. As a result, the company is
able to find out new methods for outperforming their rivals or competitors easily and promptly.
These potential areas are provided in the following paragraphs:
i) Big Data: The first as well as the foremost potential area that would be effective for
Ferrari by involvement of IT/ IS in the business is big data. These are extremely larger sets of
data, which might be successfully analyzed computationally for revealing different associations,
trends and patterns for any particular business and gain maximum efficiency (Schwalbe 2015).
Since Ferrari is doing business in all over the world, big data technology would be extremely
beneficial for them and they would be able to gain maximum success easily and promptly.
Information about their business and customers could be easily extracted by them with the help
of the traditional data processing software and hence ensure maximum success.
ii) Internet of Things: The second important and significant potential area that would be
effective for Ferrari by involvement of IT/ IS in the business is IoT or interne of things. It is the
interlink that is being made through the Internet of different computing devices being embedded

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in regular objects and hence allowing them to send as well as receive data in the most effective
manner (Cui et al. 2015). Ferrari can transfer their vital data over a network without involving
any type of interaction and also resolve the complexities easily.
iii) Cloud Computing: The final effective and efficient potential area that would be
effective for Ferrari by involvement of IT/ IS in the business is cloud computing. It is the
significant practice to utilize a network of different remote servers that are being hosted on the
Internet for storing, managing as well as processing the data. As a result, Ferrari would not be
facing any complexity in management of their data.
3. Conclusion
Hence, a conclusion could be drawn that strategic information system provides a major
connection within the demands of the company as well as the latest information technology. This
particular tactic is responsible for helping the company in getting hold of the market by proper
utilization of the information technology for fulfilling the challenging requirements to the
constant variation within their corporate environment. A specific strategy of information system
is termed as a major aspect of the company for its expansion and growth. As a result, it becomes
quite easier to handle the overall integration of the data system as well as its functionality. It
even makes sure that the functionalities of information system are performing accordingly and
different business objectives and goals are being supported at the distinctive levels. Different
instances of strategically information systems are present that can help to sustain the resources in
the competitive market. This report has clearly outlined a detailed analysis of strategic
information system for the popular organization of Ferrari with relevant details for technical
support in their business.

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