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Chapter Thirteen Translating e-Business Strategy into Action: E-Blueprint Formulation
© e-Business Strategies, Inc.www.ebstrategy.com Introduction E-Business blueprints the missing link between strategy and execution An e-Business blueprint is the whole fabric of applications, processes, and services that shape and sustain customer value e-Commerce Value Proposition What is the customer looking for? Strategy Formulation e-Business Application Foundation What applications are needed to facilitate value creation? e-Blueprint Planning
© e-Business Strategies, Inc.www.ebstrategy.com Setting Stage for e-Blueprint Planning Today’s e-business efforts –Vague ideas substitute for cohesive management and well- developed plan –Intuition, not reason, directs development of new plans With rising tech spending, e-blueprint planning more important and difficult –Tech investments not linked to definable e-strategy –Difficult to make tech-related decisions –Analysis and implementation of tech projects meeting stated objectives rare –Confusion about tech due to high market activity Strategic alignment between business models and decisions on tech spending seen necessary
© e-Business Strategies, Inc.www.ebstrategy.com Focusing on e-Blueprints, Not Single Projects Today, e-business projects being treated the same as any other initiative –Each e-effort undertaken as one project at a time –No forethought of achieving economies of scale and scope or shared resources –No shared strategic vision in place –Mergers and acquisitions compounding problems Causing serious app infrastructure problems E-business blueprint planning hurdles –Lack of political will –Departmental resistance giving precedence to individual projects over enterprise-wide need –Microsoft alternative to single-project mentality highly successful
© e-Business Strategies, Inc.www.ebstrategy.com Focusing on e-Blueprints, Not Single Projects Work backwards Time Thinking Ahead Approach An e-Blueprint combines a clear understanding of where you need to be with what needs to be done. Goal Where do we need to be 3 years from now? Where should we be next year? You are here And next year? Time Incremental Approach An incremental approach to application development will not work in the e- Business world. Goal Why some companies stagnate...Why some companies grow... And next year? You are here
© e-Business Strategies, Inc.www.ebstrategy.com Beginning the e-Blueprint Journey e-Business Design Customer Drivers Technology Drivers Organizational Drivers Business Drivers e-Business Aggregate Blueprint Individual Application Framework Projects Corporate Goals & Objectives Technology/Innovation Strategy Customer/Market Strategy
© e-Business Strategies, Inc.www.ebstrategy.com Beginning the E-Blueprint Journey Approaches for e-blueprint planning –Short-term Patch together an e-blueprint plan incorporating the company’s existing apps –Long-term Start over with an entirely new group of apps as the core piece of its e-blueprint plan
© e-Business Strategies, Inc.www.ebstrategy.com To Patch or Not to Patch Three challenges when deciding to patch or not to patch existing infrastructure –Integration of existing infrastructure –Building seamless infrastructure on a fragmented app base Front-end experience for customers must be a seamless, well-integrated service delivery platform –Knowing when to walk away and start over
© e-Business Strategies, Inc.www.ebstrategy.com Evaluating Your Company’s e-Business Blueprint Process Red flags indicating e-blueprint process in trouble –Platform projects take too long –Many substandard projects in pipeline for years –All projects being implemented are long-term, multibillion dollar, big bang efforts –Almost all projects reinventing the wheel –Too much procrastination when making decisions –Project interdependence difficult to manage –Lack of communication and business side buy in
© e-Business Strategies, Inc.www.ebstrategy.com Basics of e-Blueprint Planning e-Blueprint Creation Create a Prioritization Framework How should you invest in framework integration? What framework projects are high, medium and low priority? What set of framework projects do we need to initiate? e-Blueprint Facilitation Make a Business Case for Action e-Blueprint Execution Tactical Implementation What is our chosen path? Are we following our plan? How do we keep the plan relevant? Who develops the framework business case? How can frameworks be aligned to achieve business goals? Can we make a compelling case to decision makers about the need for change? Key Objectives Action Plan Feedback
© e-Business Strategies, Inc.www.ebstrategy.com E-Blueprint Creation: Defining the Blueprint in Your Company Five steps of e-blueprint creation 1.Establish aim of overall e-business design 2.Establish scope of the effort 3.Classify and analyze the app frameworks 4.Prioritize what needs to be done 5.For each app framework, design the execution plan
© e-Business Strategies, Inc.www.ebstrategy.com E-Blueprint Creation: Defining the Blueprint in Your Company Step 1: Establish aim of overall e-business design
© e-Business Strategies, Inc.www.ebstrategy.com E-Blueprint Creation: Defining the Blueprint in Your Company Step 2: Establish the scope of the effort –Map your ebusiness design into 3 types of improvement Process improvement Strategic improvement Business transformation Strategic ImprovementBusiness Transformation Focus of ChangeBuild exceptional internal capabilities Gain unusual insight into the customer and market needs Skill DevelopmentDistinctive process thinkingExcellent strategic decision making Implementation ApproachHighly linearEntrepreneurial Measuring ProgressEfficiency targetsMarket share
© e-Business Strategies, Inc.www.ebstrategy.com E-Blueprint Creation: Defining the Blueprint in Your Company Step 3: Classify and analyze the app frameworks
© e-Business Strategies, Inc.www.ebstrategy.com E-Blueprint Creation: Defining the Blueprint in Your Company Example of App Framework Project: B2B portal Credit Availability Price Web-based order capture tools Customer prioritization Price management and invoicing Returns and claims Service & Warranty Payment Strategic Profitability analysis Multi sourcing Multi shipping Distribution B2B Portal
© e-Business Strategies, Inc.www.ebstrategy.com E-Blueprint Creation: Defining the Blueprint in Your Company Step 4: Prioritize what needs to get done Screen 1 Screen 2 Screen 3 phase 1 phase 2phase 3phase 4 Small Wins Rapid Application Module Development and Deployment Prioritize Specific Projects within Application Framework Define Each Application Framework - Scope and Scale Define the Aggregate Blueprint - High- level Design
© e-Business Strategies, Inc.www.ebstrategy.com E-Blueprint Creation: Defining the Blueprint in Your Company Step 5: For each app framework, design execution Required Capabilities Driving ForcesImplications Fast and Responsive Changing customer expectations; accelerating value migration Shorter time-to-market cycles High execution productivity Scarce resources; wrong moves can destroy company Make better management decisions about resource allocation and project selection Flexible configurations Continuous innovation; changing customer needs Make architectural decisions that allow flexibility InnovationDemanding customers; intense competition Creativity combined with integrated solutions
© e-Business Strategies, Inc.www.ebstrategy.com E-Blueprint Creation: Defining the Blueprint in Your Company Elements of an execution map E-Business Blueprint Execution Plan Development Blueprint Customer Blueprint Integration Blueprint People and Critical Skills Map Technology Map Project & Application s Map Process Reengineering Map Infostructure Map Legacy Integration Map Application Integration Map Customer Needs Profile Map Adoption Management Map Product Versioning Map Vision & Priorities Map Develop- ment Tactical Plan Integration Tactical Plan Customer Experience Tactical Plan0 Application Framework Map
© e-Business Strategies, Inc.www.ebstrategy.com e-Blueprint Facilitation: Making a Business Case for Action Execution Target: Focused on Customer Needs and Change Legacy Infrastructure New Framework Investments Evergreen Blueprint Business Case Projects in Pipeline Customer Pain Competition
© e-Business Strategies, Inc.www.ebstrategy.com e-Blueprint Facilitation: Making a Business Case for Action Who develops a business case? –Today, technology influences business design –Blueprint sponsors CEO, President, COO or GM CIO CFO Operating VPs Board –Dangerous to let consulting partners or IT functions to “bet- the-company” app infrastructure in isolation Decisions should be participatory LOB managers, marketing execs, and corporate leaders should join IT professionals in tech review and decision- making process
© e-Business Strategies, Inc.www.ebstrategy.com e-Blueprint Facilitation: Making a Business Case for Action Key elements of an e-Business case How? (will we get there) Why? (will we win) Where? (are we going) When? (will we get there) Idea Customer selection Value proposition Technology selection Scope selection Project Selection Channel selection Partner selection Supplier selection Differentiation Metrics
© e-Business Strategies, Inc.www.ebstrategy.com e-Blueprint Facilitation: Making a Business Case for Action Changing a firm’s business strategy tantamount to committing money and HR in face of business risk and uncertainty –Preliminary assessment of scope can mitigate concerns Elements of preliminary scope –Organizational –High-level app architecture –High-level project plan –Resource requirements Detailed feasibility analysis next –Financial –Organization and cultural –Technical –Suppliers, partners, customers
© e-Business Strategies, Inc.www.ebstrategy.com e-Blueprint Facilitation: Making a Business Case for Action E-Business business case checklist –Setting business direction should be preceded by realistic look at the marketplace and at a company’s circumstances –After that, responsible mgrs must follow these guidelines Develop a goal statement Set measurable goals Set objectives Develop short- and long-term action plans Gain approval
© e-Business Strategies, Inc.www.ebstrategy.com The Serious Business of e-Blueprint Planning Aligning strategy with e-business execution a serious undertaking E-blueprint necessary –Builds creative work environment in which steady stream of high-potential ideas can emerge and be manifested through enterprise’s infrastructure and strategy Top mgmt should play strong role in the blueprint- planning process –Blueprint decisions among most important company decisions –Cuts across several product lines or divisional boundaries –Frequently requires resolution of cross-functional conflict
© e-Business Strategies, Inc.www.ebstrategy.com Alignment in Today’s Environment 75% of e-commerce projects are bound to fail because of a lack of good business planning and unreal expectations of what new technologies can do for their business. [Gartner Group] Primary Cause of Misalignment 40% of IT purchasing decisions are made by Line of Business Managers (e.g., heads of marketing). The CIO and IT staff are then responsible for implementing the technology to fulfill that department’s business goal.
© e-Business Strategies, Inc.www.ebstrategy.com Communicate, Communicate, Communicate Create an elevator pitch Create a cross-functional e-blueprint team Take baby steps Clearly communicate plans and benefits of the new e-blueprint Document success and publish results
© e-Business Strategies, Inc.www.ebstrategy.com The Problem of Leadership Lack of consistent sponsorship from top mgmt the single biggest impediment to e-business blueprint planning Bad planning due to overdelegation Some responsibilities cannot be delegated –Sitting on the blueprint committee –Approving strategic direction and corporate vision it supports –Setting project’s goals –Participating in deployment process –Personally reviewing performance against strategic goals
© e-Business Strategies, Inc.www.ebstrategy.com Questions on Executive Commitment Is senior-mgmt involved in e-business decision- making? Is top mgmt selling value of integration to decision makers? Has the company recognized that improving e- business investment mgmt is a long-term process and should be planned accordingly? Has the company ensured that e-business investment decisions are strongly linked to strategic business objectives? Has the company built a shared e-business vision through various mgmt levels?
© e-Business Strategies, Inc.www.ebstrategy.com Why e-Business Initiatives Fail Design app blueprint on your own, in your own dept Don’t do homework or auditing of company problems Don’t bother learning from other companies If you assemble a task force, meet several times in private Don’t seek outside help and if you do, hire a brand-name guru who knows nothing about technology or blueprint management When mgrs have questions, get defensive, rail at these “cynics” and “negative thinkers” who don’t get it
© e-Business Strategies, Inc.www.ebstrategy.com Why e-Business Initiatives Fail Don’t worry about communicating Blueprint doc is 3 binders thick, full of checklists and spreadsheets Don’t bother with process or project mgmt Don’t waste time taking baby steps to execute Don’t factor in periodic feedback as an opportunity for course correction Don’t factor in existing projects
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