Strategies and Steps to eBusiness Success
Strategies and Steps to
e-Business Success Chou-Hong Chen, Ph.D.Professor of MIS School of Business Administration Gonzaga University Spokane, WA 99258, USA
Senior Consultant, Taskco.com.tw Outline of the Topics
Introduction of Information Systems and e-Business Strategies to e-Business Success Steps to e-Business Success
INFORMATION SYSTEMS ORGANIZATIONS TECHNOLOGY
N Roles of Information Systems Roles of Information Systems
Automates Automates Innovates/ Transforms Innovates/ Transforms Informates Informates
IT problems and solutions Research and Evaluation Information overload Proliferation of new technologies
Need for rapid adoption Purchasing and Delivery Need for demos prior to purchase Complexity of electronic delivery of business class applications Complexity of corporate purchasing Training Technology changes too quickly to assess and eliminate employees skill
gaps Updates and Maintenance Shortened release cycles, multiple updates Decentralized workforces with rapidly changing technology needs Knowledge Comprehensive info on new technologies Objective, centralized content Decision, support tools e-Commerce Demos and evaluations E-Channel Engine (order, inventory, asset management) Flexible design for corporate purchasing and global delivery e-Learning Web-based and computer-based training coupled with research and evaluation tools e-Services Comprehensive online update service Centralized and streamlined enterprise- wide deployment of software and data Problem Solution Internet Society – Each Media Reach to 50 Million
Radio 38 years, Television 13 years, Cable TV 10 years, Internet users only took 5 years to reach this goal. Why New Models?
We need some new models for how we go about exploring IT for competitive advantage, for IT infrastructure how we create it and manage it for how we acquire, manage and deploy the skills that are needed to run that infrastructure
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
E-Channel Management Procurement Network Trading Network E-Customer Relationship E-Commerce E-Portal Management E-Services
SCM/ERP/Legacy Appls B u sin es se s
1:N M:1 M:N Knowledge Management/Business Intelligence
Infrastructure for e-Business Applications
B u sin es se s & C on su m er s
eBusiness Processes WHY Customer Relationship
Redesign Business WHAT
Processes (Outside-In) HOW Applying Technology
Why e-Business? Revolution, Revolution ...
The e-Business revolution is impossible to
ignore.It is transforming businesses in virtually every industry and reshaping the global economy.
The e-Business revolution is as fundamental a change to current society as the industrial revolution was to its preceding agrarian society. 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.
(continued) e-Business
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. How is e-Business Changing Traditional Business?
Globalization of markets One-to-one marketing Customization of site and product Integration of systems with clients New forms of E-Service
UPS setting up new computers
Commoditization of products
Low margins and brand differentiations How is e-Business Changing Business Processes?
Increased pre-and post- sale care of customers Increased use of databases and user interfaces Flatter organizational structures Development and use of customer profiles Increased reliance on cooperation software Faster product-to-market strategies Increased reliance on third parties Faster turnaround of cash flows
Facilitating Services: Delivery, Escrow, Price Comparisons The World Wide Web
Business Model : E-Catalog, Auctions, Name your price Three key success factors for e-Businesses
Technology:
Traditional versus e-Business Models?
C B
C B
C: Individual Consumer B: Business
Figure : B2C and B2B Internet Commerce in the U.S. (Source: Forrester Research) Billion
$B il li on $ $0 $200 $400 $600 $800 $1,000 $1,200 $1,400 $1,600 1998 1999 2000 2001 2002 2003 B2C B2B
Benefits of B2B
B2B solutions create competitive dynamics through:
cost savings the composition of cost (product versus process costs)
the number of intermediaries in the supply chain.
new financial (revenue) opportunities the rate of industry-wide B2B adoption business model N Why Now?
B2B catalysts are now arising to stimulate adoption (mentioned earlier).
Interactive networks have recently become ubiquitous and inexpensive, accelerating the use of B2B applications.
A viral effect will spur copycat behavior throughout the market as more companies continue to implement B2B applications. What Makes a B2B e-market Company Succeed?
Five Critical Success Factors for e- markets: Business model, market size, industry expertise, branding and distribution, management execution hustle (not just the formulation of strategy) N Solutions for e-Enterprise (e-Power Corp.)
Organizations Sellers Streamlines buying and selling between trading
partners
MarketSite Maximizes trade efficiency across the entire supply Buyers chain
Strategic e-commerce capabilities in Internet time Delivers compelling ROI Solutions for Internet Market Makers
Turn your supply chain into a revenue generation opportunity Leverage your industry
Your
domain expertise into
Portal
strategic e-commerce solutions Brings e-commerce to businesses of any size, across all industries
Strategies to e-Business Success
The Key to successful business on the Internet ... Strategy, strategy, strategy …
The key to successful business on the Internet is understanding of the formulation of a conceptual strategy and the execution of that strategy
N Two Major Elements determines Organization’s Success Core Competency
A Value-added Business Model
Value, value, value…
N
Detailed Customer Knowledge and Focus Core Competencies customer’s needs. We will seek to understand, anticipate, and be responsive to our We will continuously develop, advance and protect the technical excellence Large-Scale System Integration Learn, Efficient Design and Production Systems that allows us to integrate effectively the systems we design and produce. characterized by efficient use of assets, short time-to market, short flow Our design and production systems will be among the best in the world, times, short cycle times, high quality and high inventory turns.
Why e-Commerce Model is beneficial to your Business?
The e-Commerce model is a basic model of competitive strategy, based on the principles of low costs, high volumes, and comprehensive service, combined with a product range unapproachable through traditional channels. Planning is everything ...
Products, Services Customers, market, competition Vision guide
Strategy create develop
Tactic
Vision Mission Stages of Policies e-Business Goals (or IS)
Project Metrics Values Horizon Time Strategic Planning Objectives Time
Metrics Values Horizon Strategies Tactics N IT Planning: The Relationship Between Business, IS, and IT Strategies
PORTER’S FIVE COMPETITIVE FORCES NEW MODEL Threats SUBSTITUTE ENTRANTS MARKET & SERVICES PRODUCTS THE FIRM COMPETITORS TRADITIONAL SUPPLIERS CUSTOMERS
Bargaining power N 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
STRATEGIC INFORMATION SYSTEM: CAN CHANGE GOALS, OPERATIONS
PRODUCTS, SERVICES ENVIRONMENT
2.23
Use of Porter’s Model
List players
Analyze business drivers
Devise a strategy
Investigate supportive information technologies
N 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
Support Activities Activities of Value Chain Administrative and Other Administrative and Other Indirect Value Added Indirect Value Added Logistics Inbound Operations Outbound Logistics Sales and Marketing Services
Primary Activities The Value Chain C om pe titi ve (Value) ta ge A dv an
A Transformation Model from Market to Customer
Steps to e-Business Success
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 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
(continued) Seven-step Process
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. 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
(continued) Seven-step Process
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)
(continued) Seven-step Process
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 corporateculture - therefore, employees will be imbued with new
corporate vision(continued) Seven-step Process
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
(continued) Seven-step Process
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(continued) Seven-step Process
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 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 change keep company’s Website design and content fresh andexciting to attract new visitors and to keep them coming
back for more.(continued) Seven-step Process (continued)
7. Refresh Regularly
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. 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.