Transcript 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
[email protected]
Senior Consultant, Taskco.com.tw
Outline of the Topics
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Introduction of Information Systems
and e-Business
Strategies to e-Business Success
Steps to e-Business Success
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INFORMATION SYSTEMS
ORGANIZATIONS
TECHNOLOGY
INFORMATION
SYSTEMS
MANAGEMENT
Dr. Chen, The Challenge of the Information Systems Technology
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Roles of Information Systems
Automates
Informates
Innovates/
Transforms
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IT problems and solutions
Problem
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Research and Evaluation
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Technology changes too quickly to
assess and eliminate employees skill
gaps
Updates and Maintenance
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Shortened release cycles, multiple
updates
Decentralized workforces with
rapidly changing technology needs
Knowledge
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Need for demos prior to purchase
Complexity of electronic delivery of
business class applications
Complexity of corporate purchasing
Training
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Information overload
Proliferation of new technologies
Need for rapid adoption
Purchasing and Delivery
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Solution
e-Commerce
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Demos and evaluations
E-Channel Engine (order, inventory,
asset management)
Flexible design for corporate purchasing
and global delivery
e-Learning
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Comprehensive info on new technologies
Objective, centralized content
Decision, support tools
Web-based and computer-based training
coupled with research and evaluation
tools
e-Services
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Comprehensive online update service
Centralized and streamlined enterprisewide deployment of software and data
Internet Society –
Each Media Reach to 50 Million
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Radio 38 years,
Television 13 years,
Cable TV 10 years,
Internet users only took
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5 years to reach this goal.
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Why New Models?
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We need some new models
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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
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eBusiness Key Concepts
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eBusiness
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eCommerce
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eCRM (eCustomer Relationship Management)
the strategy of how to automate old business models
with the aid of technology to maximize customer
value
the process of buying and selling over digital media
(e.g., Internet)
the process of building,sustaining, and improving
eBusiness relationships with existing and potential
customers through digital media
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Infrastructure for e-Business Applications
Knowledge Management/Business Intelligence
E-Commerce
Procurement
Network
M:1
Trading
Network
M:N
E-Channel
Management
1:N
Businesses &
Consumers
Businesses
E-Customer Relationship
E-Portal Management
E-Services
SCM/ERP/Legacy Appls
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eBusiness Processes
WHY
Customer Relationship
WHAT
Redesign Business
Processes (Outside-In)
HOW
Applying Technology
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Why e-Business?
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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.
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e-Business ...
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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.
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e-Business
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(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.
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How is e-Business Changing
Traditional Business?
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Globalization of markets
One-to-one marketing
Customization of site and product
Integration of systems with clients
New forms of E-Service
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UPS setting up new computers
Commoditization of products
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Low margins and brand differentiations
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How is e-Business Changing
Business Processes?
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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
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Three key success factors for
e-Businesses
Technology:
The World Wide Web
Business Model:
E-Catalog, Auctions,
Name your price
Facilitating
Services:
Delivery, Escrow,
Price Comparisons
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Traditional versus e-Business
Models?
C
C
B
B
C: Individual Consumer
B: Business
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Figure : B2C and B2B Internet Commerce in the
U.S. (Source: Forrester Research)
Billion
$1,600
$1,400
$1,200
$1,000
$800
$600
$400
$200
$0
1998
B2C
B2B
1999
2000
2001
2002
2003
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Benefits of B2B
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B2B solutions create competitive dynamics
through:
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cost savings
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the composition of cost (product versus process costs)
the number of intermediaries in the supply chain.
new financial (revenue) opportunities
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the rate of industry-wide B2B adoption
business model
N
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Why Now?
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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.
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What Makes a B2B e-market
Company Succeed?
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Five Critical Success Factors for emarkets:
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Business model,
market size,
industry expertise,
branding and distribution,
management execution hustle (not just the
formulation of strategy)
N
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Solutions for e-Enterprise
Organizations (e-Power Corp.)
Sellers
MarketSite
Buyers
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Streamlines buying and
selling between trading
partners
Maximizes trade efficiency
across the entire supply
chain
Strategic e-commerce
capabilities in Internet
time
Delivers compelling ROI
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Solutions for Internet
Market Makers
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Your
Portal
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Turn your supply chain
into a revenue
generation opportunity
Leverage your industry
domain expertise into
strategic e-commerce
solutions
Brings e-commerce to
businesses of any size,
across all industries
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Strategies to
e-Business
Success
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The Key to successful business
on the Internet ...
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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
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Two Major Elements determines
Organization’s Success
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Core Competency
A Value-added
Business Model
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Value, value, value…
N
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Core Competencies
Detailed Customer Knowledge and Focus
We will seek to understand, anticipate, and be responsive to our
customer’s needs.
Large-Scale System Integration
We will continuously develop, advance and protect the technical excellence
that allows us to integrate effectively the systems we design and produce.
Learn, Efficient Design and Production Systems
Our design and production systems will be among the best in the world,
characterized by efficient use of assets, short time-to market, short flow
times, short cycle times, high quality and high inventory turns.
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Why e-Commerce Model is
beneficial to your Business?
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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.
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Planning is everything ...
develop
Customers,
market,
competition
Vision
guide
Strategy
create
Tactic
Products,
Services
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Vision
Mission
Stages of
Policies
e-Business
(or IS)
Project
Goals
Metrics
Values
Strategic
Planning
Time
Horizon
Objectives
Metrics
Values
Time
Horizon
Strategies
Tactics
N
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IT Planning: The Relationship Between Business, IS,
and IT Strategies
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PORTER’S FIVE COMPETITIVE FORCES
MODEL
Threats
NEW
MARKET
ENTRANTS
THE FIRM
SUPPLIERS
SUBSTITUTE
PRODUCTS
& SERVICES
TRADITIONAL
COMPETITORS
Bargaining power
CUSTOMERS
N
Dr. Chen, The Trends of the Information Systems Technology
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Porter’s Competitive Forces
Strategies
Cost leadership
 Differentiation
 Focus
Expanded generic strategies
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Strategic positioning (e.g., internal efficiency)
Customer service
and my own view ...
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Innovation
Dr. Chen, The Trends of the Information Systems Technology
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STRATEGIC ROLE OF INFORMATION
SYSTEMS
STRATEGIC INFORMATION SYSTEM:
CAN CHANGE GOALS, OPERATIONS
PRODUCTS, SERVICES
ENVIRONMENT
TO GAIN COMPETITIVE ADVANTAGE
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Dr. Chen, The Trends of the Information Systems Technology
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Use of Porter’s Model
•
•
•
•
List players
Analyze business drivers
Devise a strategy
Investigate supportive information
technologies
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Dr. Chen, The Trends of the Information Systems Technology
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The Value Chain Model
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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
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Activities of Value Chain
Support Activities
Administrative and Other
Indirect Value Added
Inbound
Logistics
Operations
Outbound
Logistics
Marketing
and
Sales
Services
Primary Activities
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The Value Chain
(Value)
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A Transformation Model from Market to Customer
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Steps to
e-Business
Success
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Seven-step Process ...
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The following seven-step process can
help guide a company through its eBusiness transformation.
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Cover the gamut of e-business activities,
from conception to operation
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Seven-step Process
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1.
2.
3.
4.
5.
6.
7.
(continued)
Start High
Think Fresh
Know Your Market
Set Vision
Define Strategy
Create
Refresh Regularly
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Seven-step Process
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(continued)
1. Start High
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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.
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Seven-step Process
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(continued)
2. Think Fresh
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The Internet revolution is radically changing the business
game.
Start with a fresh viewpoint and assume that everything
is open to question and change.
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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
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Seven-step Process
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(continued)
3. Know your market
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assess your company’s current market
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needs of your customers, partners, and suppliers
how you can meet or exceed their needs through eBusiness 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:
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branding, customers, competition, supply chain, demand
chain (e.g., auto online)
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Seven-step Process
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(continued)
4. Set Vision
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a long-term vision to guide your company as it enters
the e-Business world
the vision defines
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do not rush to strategies, actions, and results
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what a company wants to do,
what it wants to be.
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
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Seven-step Process
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(continued)
5. Define Strategy
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define, select, and prioritize the initiatives needed to
implement the company’s e-Business vision
the strategy defines
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incremental actions are not enough
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how the company is going to get there.
expect high potential returns and advantages
other factors to consider:
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process change, organizational change, technical
architectures, creative needs, fit within overall vision
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Seven-step Process
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(continued)
6. Create
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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:
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design, content, promotion, legacy integration,
development (SDLC), organizational change implementation,
training
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Seven-step Process
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(continued)
7. Refresh Regularly
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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 eBusiness 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.
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Seven-step Process
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(continued)
7. Refresh Regularly (continued)
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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.
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Conclusion
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The need for interdisciplinary thinking
has never been greater …
companies that can continually combine
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innovative business thinking,
creative design and content, and
advanced technology
will lead the way in e-Business success.
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SURFING THE NET
THANKS and GO for your
Successful e-Business!!
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