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Steps to e-Business Success

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Presentation on theme: "Steps to e-Business Success"— Presentation transcript:

1 Steps to e-Business Success
Jason C.H. Chen, Ph.D. Professor of MIS School of Business Administration Gonzaga University Spokane, WA 99258, USA

2 Knowledge Management/Business Intelligence E-Customer Relationship
Focus on e-Business Applications Knowledge Management/Business Intelligence E-Commerce E-Customer Relationship Procurement Network Trading Network E-Channel Management Businesses & Consumers Businesses M:1 M:N 1:N E-Portal Management E-Services SCM/ERP/Legacy Appls

3 Roles of Information Systems
Automates Informates Innovates/ Transforms

4 eBusiness Key Concepts
eBusiness the strategy of how to automate old business models with the aid of technology to maximize customer value eCommerce the process of buying and selling over digital media (e.g., Internet) eCRM (eCustomer Relationship Management) the process of building,sustaining, and improving eBusiness relationships with existing and potential customers through digital media

5 eBusiness Processes WHY Customer Relationship
WHAT Redesign Business Processes (Outside-In) HOW Applying Technology

6 By Michiyo Nakamoto, Financial Times, Nov. 23, 1999
Why e-Business? The Information economy will make all organizations reassess their positions with respect to their customers-supplier relationship. “e-Business is bound to come and unless we are able to cope with the changes in this world, our competitiveness will decline.” this is a clear testament to the power of the new information-based economy and a warning to all companies that inertia must be overcome and change embraced. By Michiyo Nakamoto, Financial Times, Nov. 23, 1999

7 Revolution, Revolution ...
The e-Business revolution is impossible to ignore. It is transforming businesses in virtually every industry and reshaping the global economy. Organizational structures and operational practices that have served business well since the Industrial Revolution are suddenly obsolete.

8 Revolution, Revolution (continued)
The entrenched distribution networks that once served as formidable barriers to competition may suddenly become liabilities, unable to respond to the new demands of the marketplace. The e-Business revolution is as fundamental a change to current society as the industrial revolution was to its preceding agrarian society.

9 e-Business ... The heart of e-business is interconnectivity and interaction. The ability to reach more people while sharing information of increasing richness creates new opportunities for value creation in areas such as marketing, customer service, and operations.

10 e-Business (continued)
In this new world, status quo is not an option. Companies have to reinvent themselves to survive. Given the fast pace of e-business change, actions that once took years to accomplish must now be done in months or weeks.

11 Planning is everything ...
Vision develop Customers, market, competition guide Strategy create Tactic Products, Services

12 Figure: Stages of e-Business (or IS) Project Strategic Planning Vision
Mission Policies Goals Metrics Values Time Horizon Objectives Strategies Tactics Figure: Stages of e-Business (or IS) Project Strategic Planning Vision: A vision is what an organization wants it to be, and it is a message that every employee should not only hear, but should also believe in. The company’s vision is about its values, beliefs, quality, and the future. Mission : A statement of the basic purpose or purposes for which the organization exists. It tell an organization what it is, why it exists, and the unique contribution it can take (what it does not do, as well as what it does). For example, the utility company could be: "To supply energy to consumers.” Goals vs. Objectives: Broad statements of the ends the organization intends to accomplish in order to fulfill its mission. Objectives are more specific, measurable elements of a goal. For example, the utility company might have increased profitability and energy utilization as goals, measured by objectives such as specific increases in earnings per share and kilowatt hours used. Strategies vs. Tactics: Strategies are general approaches that show how goals should be achieved, and tactics are more specific guides to actions that would implement strategies. For example, a company strategy of "becoming the low-cost producer in its industry" would probably require a tactic such as increasing investments in automation. Policies: General guidelines that direct and constrain decision making within an organization. For example, many organizations have a policy of "promoting from within" that guides managers in filling job openings that occur. Policies are implemented by rules and procedures which are more specific statements that direct decision making. For example, procedures to follow in hiring employees, and rules protecting employee job rights, wold help implement a policy of promoting from within an organization. Strategic Planning: It deals with the development of an organization's mission, goals, strategies, and policies. Tactical Planning: It involves the design of tactics, the setting of objectives, and the development of procedures, rules, schedules, and budgets. Operational Planning: It is a planning done on a short-term basis to implement and control day-to-day operations. N TM -12

13 IT Planning: The Relationship Between Business, IS, and IT Strategies


15 Porter’s Competitive Forces Strategies
Cost leadership Differentiation Focus Expanded generic strategies Strategic positioning (e.g., internal efficiency) Customer service and my own view ... Innovation Dr. Chen, The Trends of the Information Systems Technology


17 Use of Porter’s Model List players Analyze business drivers
Devise a strategy Investigate supportive information technologies N Dr. Chen, The Trends of the Information Systems Technology

18 The Value Chain Model The model views the firm as a series or "chain" of basic activities that add a margin of value to a firm's products or services, indicating where IS can best be applied to achieve a competitive advantage. N Dr. Chen, The Trends of the Information Systems Technology

19 Activities of Value Chain
Support Activities Administrative and Other Indirect Value Added Firm as a value chain – describe the firm as a set of interrelated activities (value chain). -- Every firm is a collection of activities performed to design, produce, market, develop, and support its product. -- it is a reflection of its history, 2) its decision making, and 3) its approach to implementing its decisions and 4) underlying economic of the activities themselves. Primary activities are those involved in taking the raw materials and developing the products and services for the customers. There are five generic sets of primary activities. Support activities can be divided into four generic categories. Though firms in the same industry may have similar value chains, the value chains of competitors often differ. First of all, the value chains help the firm deliver products and services to its customers. From the customer’s point of view, the value delivered by a firm (to the customers) depends on the superiority of its products or service relative to the price paid by the customer. The value appropriated by the firm, on the other hand, depends on the value created by the customers, but in relationship to the firm’s cost structure. In general, the value appropriated should exceed the opportunity cost of capital. Inbound Logistics Operations Outbound Logistics Marketing and Sales Services Primary Activities

20 The Value Chain (Value) Competitive Advantage
IT can profoundly affect one or more of these activities - - sometimes simply by improving effectiveness, - sometimes by fundamentally changing the activity, and - sometimes by altering the relationship between activities. In addition, the actions of one firm can significantly affect the value chain of key customers and suppliers. Operations: Boeing -- Lean Manufacturing

21 A Transformation Model from Market to Customer
TM -21

22 Seven-step Process ... The following seven-step process can help guide a company through its e-Business transformation. Cover the gamut of e-business activities, from conception to operation

23 Seven-step Process (continued)
1. Start High 2. Think Fresh 3. Know Your Market 4. Set Vision 5. Define Strategy 6. Create 7. Refresh Regularly

24 Seven-step Process (continued)
1. Start High e-Business is more than developing a fancy Website e-Business is a business rather than a technical endeavor radical change (BPR) e-Business initiatives may also cut across corporate boundaries, shifting organizational structures, redefining job descriptions, and upsetting established processes. Only corporate executives can marshal the forces and commitment to launch an e-Business program and respond the concerns of internal and external stakeholders.

25 Seven-step Process (continued)
2. Think Fresh The Internet revolution is radically changing the business game. Start with a fresh viewpoint and assume that everything is open to question and change. What your customers are really buying from you? Is how you deliver your product more important than the product itself? Porter’s model (commodities vs. differentiation from competitor, e.g., DELL) New ways of pricing your products and services. SWAT, outsourcing SWAT - Specialist With Advanced Tools N

26 Seven-step Process (continued)
3. Know your market assess your company’s current market needs of your customers, partners, and suppliers how you can meet or exceed their needs through e-Business capabilities. expand upon this market awareness by identifying possible new products, services, and business lines encroaching competition from existing and unknown sources formulate your e-Business vision and strategy. Knowing your market means exploring your: branding, customers, competition, supply chain, demand chain (e.g., auto online)

27 Seven-step Process (continued)
4. Set Vision a long-term vision to guide your company as it enters the e-Business world the vision defines what a company wants to do, what it wants to be. do not rush to strategies, actions, and results Vision <--- Mission <--- Goals/objectives <--- Strategies <--- Tactics Complete executive buy-in is essential; executives must promote the vision and make it part of the corporate culture - therefore, employees will be imbued with new corporate vision

28 Seven-step Process (continued)
5. Define Strategy define, select, and prioritize the initiatives needed to implement the company’s e-Business vision the strategy defines how the company is going to get there. incremental actions are not enough expect high potential returns and advantages other factors to consider: process change, organizational change, technical architectures, creative needs, fit within overall vision

29 Seven-step Process (continued)
6. Create a company transforms itself through a set of coordinated initiatives that implement that needed organization, technology, and process changes the most difficult part of an e-Business transformation is changing the underlying business model (but does not mean to undercut the importance of technology nor underestimate the complexity of the implementation) when building e-business site, consider: design, content, promotion, legacy integration, development (SDLC), organizational change implementation, training

30 Seven-step Process (continued)
7. Refresh Regularly to be viable, a company must continually review, reexamine, and revise its vision, strategies, and implementations. Speed, innovation, and change are implicit parts of the e-Business world survey customers continually to learn if it is meeting their needs and goals - making money, reaching prospects, satisfying stakeholders - in order to know when and what to change keep company’s Website design and content fresh and exciting to attract new visitors and to keep them coming back for more.

31 Seven-step Process (continued)
7. Refresh Regularly (continued) launch promotional campaigns to drive traffic to its Website. Products, and services; to maintain and enhance its brand identity; and to garner a greater share of a market where switching costs are low or nonexistent e-Business promises lower prices and better selection for consumers, and unlimited opportunities for new businesses.

32 Conclusion The need for interdisciplinary thinking has never been greater … companies that can continually combine innovative business thinking, creative design and content, and advanced technology will lead the way in e-Business success.


34 THANKS and GO for your Successful e-Business!!

35 Figure: Hierarchy of Leadership Tools
Vision Mission, Principles, and Values Goals / Objectives Strategies Plans Tactics Figure: Hierarchy of Leadership Tools

SEARCH ENGINE: tool for locating specific sites or information on WWW HYPERLINK: spot on screen, when clicked shifts to a new page or site “PUSH” TECHNOLOGY: server streams relevant content to browser Surf's Up!

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