3Roles of Information Systems AutomatesInformatesInnovates/Transforms
4eBusiness Key Concepts eBusiness the strategy of how to automate old business models with the aid of technology to maximize customer valueeCommerce 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
5eBusiness Processes WHY Customer Relationship WHATRedesign Business Processes (Outside-In)HOWApplying Technology
6By 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
7Revolution, 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.
8Revolution, 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.
9e-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.
10e-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.
11Planning is everything ... VisiondevelopCustomers,market,competitionguideStrategycreateTacticProducts,Services
12Figure: Stages of e-Business (or IS) Project Strategic Planning Vision MissionPoliciesGoalsMetricsValuesTimeHorizonObjectivesStrategiesTacticsFigure:Stages ofe-Business(or IS)ProjectStrategicPlanningVision: 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.NTM -12
13IT Planning: The Relationship Between Business, IS, and IT Strategies
14PORTER’S FIVE COMPETITIVE FORCES MODEL ThreatsNEW MARKET ENTRANTSSUBSTITUTE PRODUCTS & SERVICESTHE FIRMTRADITIONAL COMPETITORSSUPPLIERSCUSTOMERSBargaining powerNDr. Chen, The Trends of the Information Systems TechnologyTM -14
15Porter’s Competitive Forces Strategies Cost leadershipDifferentiationFocusExpanded generic strategiesStrategic positioning (e.g., internal efficiency)Customer serviceand my own view ...InnovationDr. Chen, The Trends of the Information Systems Technology
16STRATEGIC ROLE OF INFORMATION SYSTEMS STRATEGIC INFORMATION SYSTEM:CAN CHANGE GOALS, OPERATIONSPRODUCTS, SERVICESENVIRONMENTTO GAIN COMPETITIVE ADVANTAGE2.23Dr. Chen, The Trends of the Information Systems Technology
17Use of Porter’s Model List players Analyze business drivers Devise a strategyInvestigate supportive information technologiesNDr. Chen, The Trends of the Information Systems Technology
18The Value Chain ModelThe 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.NDr. Chen, The Trends of the Information Systems Technology
19Activities of Value Chain Support ActivitiesAdministrative and OtherIndirect Value AddedFirm 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 ofits history,2) its decision making, and3) its approach to implementing its decisions and4) 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.InboundLogisticsOperationsOutboundLogisticsMarketingandSalesServicesPrimary Activities
20The 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
21A Transformation Model from Market to Customer TM -21
22Seven-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
23Seven-step Process (continued) 1. Start High2. Think Fresh3. Know Your Market4. Set Vision5. Define Strategy6. Create7. Refresh Regularly
24Seven-step Process (continued) 1. Start Highe-Business is more than developing a fancy Websitee-Business is a business rather than a technical endeavorradical 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.
25Seven-step Process (continued) 2. Think FreshThe 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, outsourcingSWAT- SpecialistWithAdvancedToolsN
26Seven-step Process (continued) 3. Know your marketassess your company’s current marketneeds of your customers, partners, and suppliershow you can meet or exceed their needs through e-Business capabilities.expand upon this market awareness by identifying possible new products, services, and business linesencroaching competition from existing and unknown sourcesformulate your e-Business vision and strategy.Knowing your market means exploring your:branding, customers, competition, supply chain, demand chain (e.g., auto online)
27Seven-step Process (continued) 4. Set Visiona long-term vision to guide your company as it enters the e-Business worldthe vision defineswhat a company wants to do,what it wants to be.do not rush to strategies, actions, and resultsVision <--- Mission <--- Goals/objectives <--- Strategies <--- TacticsComplete 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
28Seven-step Process (continued) 5. Define Strategydefine, select, and prioritize the initiatives needed to implement the company’s e-Business visionthe strategy defineshow the company is going to get there.incremental actions are not enoughexpect high potential returns and advantagesother factors to consider:process change, organizational change, technical architectures, creative needs, fit within overall vision
29Seven-step Process (continued) 6. Createa company transforms itself through a set of coordinated initiatives that implement that needed organization, technology, and process changesthe 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
30Seven-step Process (continued) 7. Refresh Regularlyto 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 worldsurvey 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 changekeep company’s Website design and content fresh and exciting to attract new visitors and to keep them coming back for more.
31Seven-step Process (continued) 7. Refresh Regularly (continued)launch promotional campaignsto drive traffic to its Website. Products, and services;to maintain and enhance its brand identity; andto garner a greater share of a market where switching costs are low or nonexistente-Business promises lower prices and better selection for consumers, and unlimited opportunities for new businesses.
32ConclusionThe need for interdisciplinary thinking has never been greater …companies that can continually combineinnovative business thinking,creative design and content, andadvanced technologywill lead the way in e-Business success.
35Figure: Hierarchy of Leadership Tools VisionMission,Principles,and ValuesGoals / ObjectivesStrategiesPlansTacticsFigure: Hierarchy of Leadership Tools
36SURFING THE NET Surf's Up! SEARCH ENGINE: tool for locating specific sites or information on WWWHYPERLINK: spot on screen, when clicked shifts to a new page or site“PUSH” TECHNOLOGY: server streams relevant content to browserSurf's Up!