2. E-Commerce Inside the Enterprise MD853 November 22, 2003

3. Topics for Today Looking ahead: –Papers and presentations for Dec 6 –Final exam format –Web services topic moved to Dec 6 class Catch up on CRM & industry impact Enterprise search models –Guest speaker: Peter Bauert, Fast Search Knowledge Management, E-Learning and the Real-Time Enterprise Macro analysis of global IT and E-Commerce –Guest speaker: Gigi Wang

4. Knowledge Management Defined Organizing and effectively deploying the intellectual assets of an organization

5. Components of “Knowledge” Data –Statistics, observations, other objective and quantifiable metrics Information –Data that informs decisions and leads to action Knowledge –Information or experience that has been interpreted by applying (human) intelligence Tacit Explicit Cultural

6. Assistance from “Business Intelligence” Tools Any tools enabling people to make better decisions and thus improve their business processes Decision support systems (DSS) Executive information systems (EIS) Reporting Data mining CRM KM Examples:

7. The Enduring Challenge How do you turn data and information into knowledge? –Role and limits of IT and software tools –Role of the Internet and the web Capturing and organizing data Communicating what employees and organizations know tacitly and explicitly –Intranets The human dimension

8. The Rise of Intranets for for ad-hoc KM Technical capabilities –Universal, standardized front end –Distributed, low cost access Organizational drivers –Grass roots implementation easy –Project and need specific—quick results –Visible ROI for web investments Issues and barriers –Lack of central control & corporate consistency –Substitute for commercial solutions –HP, Microsoft, Ernst & Young experiences

9. From Intranet to Extranet Natural outgrowth of E-Commerce Sharing data and information with partners and customers –What about protecting and sharing knowledge? –Risks and strategic opportunities IBM Global Services knowledge web experiment –Lessons learned

10. ERP Meets Web-Based KM Enterprise Resource Planning programs –Planning and Scheduling of Resources –Have (70’s) roots in Materials Resource Planning Materials Requirement Planning (MRP) Manufacturing Resource Planning ( MRP II) –Enabled by Data Base Management systems Supply Chain Management Value Chain Management –More Recently Integrated with Internet/Web and with KM and Information Management Systems and e-Learning

11. Typical Motivation for Embarking on KM Implementation Management perceives a Problem and an Opportunity –The “interface” problem – systems don’t communicate Lack of integration of disparate systems Difficulty of reconciling data from disparate systems Delay in processing transactions The opportunity to do more for less –Reduce cost of interfaces –Improve speed of responses and efficiency of processes –Increase customer satisfaction –Make smarter decisions about products and strategy

12. Before Data Integration and KM… Manufacturing location 1 Manufacturing location 2 Sales Group Finance Corporate office My growth will be OK. No?

13. Integration of Data to Support KM Local purchasing, invoice verification Inventory management Internal sales, shipping and billing Profit/loss Capacity utilization Information Systems: Project Mgmt Inventory Purchasing Sales Budget Cash Management ManufacturingHead QuartersMarketing/Sales IS messages Sales, shipping and billing Purchasing of trading goods Inventory Management Customer service IS messages

14. Input=Information Output=Smarter Decisions Result = Knowledge Ta-DA!

15. Expectations That May Not Match Reality One system can integrate all data from all sources Seamless interfaces are possible Frictionless transactions Instantaneous data access Information leading to the right action/decision Transforming that information into knowledge— intellectual capital for the company

16. Barriers to Full Deployment of CRM and KM Systems Very high cost of implementation –Dollars –Person Power Often forces a change in process Requires extensive training of employees Takes a long time to implement

17. Why does it fail so often? Failure to define requirements going in. –War stories Poor selection of package and platform –Software, hardware, DB Inadequate resources budgeted for the transition –Money and People Resistance to Change –Easier for you to adapt to it, than it to you. –Some processes will need to change –Lack of end user “buy-in.” Stake holders. No Realistic Plans or Process to Measure Results –Lack of ROI metrics and measurement

18. What leads to success? A company that understands and carefully documents its needs. Adequate resources for the project Flexibility to adapt existing processes Change management commitment –Enlist, empower, communicate, lead, listen, train Train and train some more Follow through, evaluate and adjust (don’t abandon)

19. “Best Practices” for KM Implementation Do not start without Management commitment Allocate sufficient funds and time Identify core Project Team Select specialists from all functional areas Evaluate and select commercial package Evaluate and select implementation partner (s) Make an implementation plan with realistic timeline and explicit resources Present plan to Management for feedback/buy-in Present plan to Employee groups for feedback/acceptability Plan for user training Plan for adjustments and future upgrades

20. Are We Smarter Yet? Many E-Commerce business models assumed that there was intrinsic value in aggregating data and information –About customers –About buyers and sellers (e-markets) –About internal business processes (e-value chains) Many IT tools and software solutions do the same Neglect the challenges of knowledge management as key to unlocking that value and changing organizations Integration of Internet and commercial solutions still at primitive stage