Transcript Document 7210286

GLOBAL MANAGEMENT OF EBUSINESS & E-COMMERCE
Chang-Yang Lin, Ph.D.
Professor and Coordinator
Computer Information Systems Program
Eastern Kentucky University
Global Management of
E-Commerce and E-Business

E-Commerce and E-Business

Practices of IT Management
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E-Business Planning and Information
Resource Planning
Global E-Business Issues
The Challenge: Some Concluding
Remarks
Chang-Yang Lin
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E-Commerce & E-Business
E-Commerce: the buying
& selling, marketing &
servicing, and delivery &
payment of products,
services, and information
over the Internet,
intranets, and extranets
between an enterprise
and its prospects,
customers, suppliers, and
other business partners
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E-Business: the use of
Internet technologies to
internetwork and
empower business
processes, e-commerce,
and communication and
collaboration within a
company and with its
customers, suppliers, and
other business
stakeholders
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E-Commerce & E-Business
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Source: Nat’l Academic Press,
http://books.nap.edu/books/0309051797
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The Results of Hershey’s ERP Failure
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A 12% sales
decline
An inability to ship
complete orders to
some retail
customers
An increase in
typical delivery
times from 5 days
to 12
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A 29% increase in
year-to-year
inventory costs
Strained customer
relations and
major marketshare losses
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Enterprise Resource Planning (ERP)
• ERP: Integrated crossfunctional software that
reengineers
manufacturing,
distribution, finance,
human resources and
other basic business
processes of a company
to improve its efficiency,
agility, and profitability
• Vendors
• SAP R/3
• PeopleSoft
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Reasons for
implementing an ERP
system
• To integrate applications
and data to support
decision-making needs
• To force business process
reengineering
• To give the firm the
competitive advantage to
survive
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IT Management
Managing Business
and IT strategies
Managing Application Development
and Technology
Managing the
IT Organization
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The E-Organization:
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Organization structure
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Knowledge
• Networked
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• Cisco maintains a
strong web of strategic
partnerships & systems
integration with
suppliers, contractors,
and assemblers
Leadership
• Everyone is a leader
• 40+ acquisitions
become autonomous
business units
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• Shared
• the suppliers’
production processes
are pulled by Cisco’s
demand
• a save of $500 million
from supply chain
management, online
technical support,
software distribution
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The E-Organization:
• Alliance
– create new value and
outsource
uncompetitive services
– Ally with competitors,
customers, and
suppliers
– 50% of customer orders
that come in over its
website are routed
electronically to a
supplier who ships
directly to the customer
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• Governance
– Internal and external
– Cisco’s rapid
acquisitions process
– Cisco’s ability to
integrate its
acquisitions quickly
into the family
• People and culture
– Delegated authority;
collaboration expected
and rewarded
– Turnover (Cisco: 6.7%;
industry: 18%)
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Managing IT Organization:
• Hire IS professionals
who can flexibly
integrate new IT and
business competencies
• Evolving workgroups
organized around
emerging IT-intensive
business initiatives
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• IT funding typically
based on value
proposition around
business opportunity
related to building
services for customers.
IT project inseparable
part of business
initiative
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Business Value
Visioning
Application Development
and Deployment
Information
Resource
Planning
Business Strategies
and Models
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IT Strategies
and Architecture
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Information Resources Planning Process
ASSESS BUSINESS
VISION FOR
BUSINESS
BUSINESS OPS
PLAN & BUDGET
BUSINESS
STRATEGIC PLAN
IS OPS PLAN &
BUDGET
VISION: HOW
BUSINESS SHOULD
USE INFO
ASSESS INFO USE
& MANAGEMENT
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IS STRATEGIC
PLAN
INFORMATION
ARCHITECTURE
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Information Resource Planning
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Assessment of Current Information
Resources
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Information Vision & Information
Technology Architecture
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Strategic & Operational IS Plans Must
Move Toward Desired Architecture
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Information Resources Assessment
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Critical Evaluation of Inventory of
Hardware, Software, People
Looks at Quality of Resources
Helps Meet Business Needs of
Organization
Example
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Information Vision & Architecture
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Information Vision: Written
expression of desired future for
information use & management
Technology Architecture:
Description of how information
resources should be deployed to
achieve the information vision
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Assessing the Organization
Ask these questions:
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Do key executives understand the impact
of IT on the company’s competitive
position?
Do they understand what is possible with
current and forthcoming technologies?
Do they know how the capabilities and
economics of IT will change the way the
business is operated and managed?
Does the company have the right balance
between innovation and managing scarce
technology resources?
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Assessing Current Information Resources
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Measure Use and Attitudes
Review IS Organizational Mission
• Information Vision: A mission can best be
defined by delineating the reasons for having an
IS function. Each reason is classified under one
of the following categories:
• Efficiency: Uses minimum resources to do its job
• Effectiveness: Helps users spend time doing right
things
• Competitiveness: Helps ensure organization’s
competitive position
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Examples of Information Resources
Assessment
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A single IS does not exist in our organization
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Substantial potential exists for cleaning up the automation
of existing work processes
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Significant gaps exist in automation of the value-added
process in our company
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There is a perception that the IS organization is not a
company-wide support organization
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Except for the last year and a half, IS appears to have been
a stepchild of senior management
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There is a significant perception among the user population
that IS is not particularly responsive to their needs
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Examples of Information Resources
Assessment (continued)
IS personnel seem dedicated to IS and the company
 The level of user training and support is substantially
below needs and expectations
 While the workload in IS is heavy at times, current
staffing levels should be sufficient to meet current
expectations
 The Internet is not used extensively
Additional issues:
 Hardware; Network infrastructure
 Databases; Software applications
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CREATING INFORMATION VISION
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Speculate: How will competitive
environment change?
Current System: Can it do future
job?
Identify Changes: How must IS
change to allow company to take
advantage of future environment?
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IS Mission Statement – An Example
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Information Services is responsible for a wide variety of
computing systems and services for the people of
corporation. In this role, the department:
Provides a secure location for housing and accessing the
official electronic data records of the company
Maintains shared computer processing capacity and
support for file maintenance and information reporting
Manages a corporate data network that delivers services
to departmental servers and individual workstations
linked to its data center
Provides integrated IS development for departments in
order to advance organizational strategies
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IS Mission Statement – Another Example
In order to meet the challenges outlined within the company
Vision Statement and support the strategic objectives and
values of our company, the mission of Information Services
is to provide reliable information, data, and computing
services to all clients, both within and, where appropriate,
outside of the company.
To accomplish this role, it will be necessary to
exercise leadership in identifying new management tools
based on evolving IT that enables management to increase
their effectiveness in operating and managing the business.
The department’s ultimate objective is the development of
an integrated information infrastructure and associated
services required to facilitate the decision-making process.
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ELEMENTS OF IT ARCHIETCTURE
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Technology Component
• Hardware
• Software
• Network
• Data
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Human Component
• Personnel
• Values/Culture
• Management System
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STRATEGIC IS PLAN
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Set of Long Range Goals Which Document Movement
Toward Information Vision & Architecture
Associated Major Initiatives to Achieve Goals
Development Steps:
• Set Objectives
• Conduct Internal & External Analysis
• Establish Strategic Initiatives
• Critical Success Factors
• Analyze Competitive Forces
• Value Chain Analysis
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VALUE CHAIN ANALYSIS
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ACTIVITIES THAT ADD VALUE FOR THE
CUSTOMER
PRIMARY ACTIVITIES (PRODUCT):
• INBOUND LOGISTICS
• OPERATIONS
• OUTBOUND LOGISTICS
• MARKETING & SALES
• SERVICE
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OPERATIONAL IS PLAN
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Precise set of short term projects to be
executed by IS department & usermanagers in support of strategic IS plan
LONG TERM: Two-to-three years, project
definition, selection, prioritization. Based
on anticipated changes in business
SHORT TERM: One year, linked to annual
budget. Focuses on completing current
projects, beginning new ones. Immediate
hardware, software, staffing needs
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Benefits of
Information Resources Planning
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Better IS Resource Allocation
Communicates with Top Management
Helps Vendors
Creates Context for Decisions
Achieves Integration & Decentralization
Evaluates Options
Meets Management Expectations
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Outline of an Operational IS Plan
• Mission
• Environment of IS:
information needs of the
various user groups and of
the corporation as a whole
• Objectives of IS Department
• Constraints on IS
Department: the limitations
imposed by technology in
general and the constraints
imposed by the resources
within the company
(financial, technological,
personnel)
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• Long-Term Systems Needs
• Short-Range Plan: a detailed
inventory of present projects
and systems, and a detailed
plan of projects to be
developed or advanced
during the current year
• Contingencies: events that
may affect the plan
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E-Business Planning Process
Strategy development
 Developing strategies that support a
company’s vision, and use IT to create
innovative E-Business systems that focus on
business value
Resource management
 Developing strategic plans for managing or
outsourcing a company’s IT resources
Technology architecture
 Making strategic IT choices that reflect an IT
architecture designed to support a company’s
E-Business initiatives
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IT Architecture:
a conceptual blueprint including the following components
Technology platform
 The Internet, intranets, extranets, computer systems,
system software, enterprise application software
Data resources
 operational databases, information databases, data
warehouses, hypermedia databases
Applications architecture
 including support for developing and maintaining supply
chain applications, ERP, and customer relationship
management applications
IT organization
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Managing the IS Function
Organizing IT
– More centralized control
over the management of
the IS resources while
serving the strategic needs
of its business units
– Separate .com business
units
– Outsourcing
– ASP
Technology management
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Managing Application
development
Managing IS operations
– Performance monitors
supply information needed
by chargeback systems
that allocate costs to users
based on the information
services rendered
Managing user services
Human resource
management of IT
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Premiere Technologies, Inc.: ing yl yi
Using ASPs
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Goal
• Rescue a failing PeopleSoft ERP project without
compromising core business efforts
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ASP: TransChannel LLC, Atlanta
Solution
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• Premiere turned the whole project over to the
ASP to manage
Result:
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• Saving about $3 million over five years by
giving the work to TransChannel
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Mission Statement
• Mission: We will become the
world's most valued
company to patients,
customers, colleagues,
investors, business partners,
and the communities where
we work and live.
• Values: To achieve our
mission, we affirm our
values of Integrity,
Leadership, Innovation,
Performance, Teamwork,
Customer Focus, Respect for
People, and Community.
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• Integrity: We demand of
ourselves and others the
highest ethical standards,
and our products and
processes will be of the
highest quality.
• Customer Focus: We are
deeply committed to meeting
the needs of our customers,
and we constantly focus on
customer satisfaction
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Mission Statement
• Respect: We recognize that
people are the cornerstone of
Pfizer's success, we value
our diversity as a source of
strength, and we are proud of
Pfizer's history of treating
people with respect and
dignity.
• Performance: We strive for
continuous improvement in
our performance, measuring
results carefully, and
ensuring that integrity and
respect for people are never
compromised.
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• Teamwork: We know that to
be a successful company we
must work together,
frequently transcending
organizational and
geographical boundaries to
meet the changing needs of
our customers.
• Innovation is the key to
improving health and
sustaining Pfizer's growth
and profitability.
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Mission Statement
• Leadership: We believe that
leaders empower those
around them by sharing
knowledge and rewarding
outstanding individual effort.
Leaders are those who step
forward to achieve difficult
goals, envisioning what
needs to happen and
motivating others.
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• Community: We play an
active role in making every
country and community in
which we operate a better
place to live and work,
knowing that the ongoing
vitality of our host nations
and local communities has a
direct impact on the longterm health of our business.
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Our Values
• Respect for people that
includes our concern for
the interests of all people
worldwide who touch —
or are touched by — our
company: customers,
employees, shareholders,
partners and communities
• Integrity that embraces the
very highest standards of
honesty, ethical behavior
and exemplary moral
character
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• Excellence that is
reflected in our continuous
search for new ways to
improve the performance
of our business to become
the best at what we do
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Mission Statement
• Mission
– to provide society with
superior products and
services -- innovations
and solutions that
improve the quality of
life and satisfy customer
needs -- to provide
employees with
meaningful work and
advancement
opportunities and
investors with a superior
rate of return.
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• Our Values
– Our business is
preserving and
improving human life.
All of our actions must
be measured by our
success in achieving this
goal. We value above all
our ability to serve
everyone who can benefit
from the appropriate use
of our products and
services, thereby
providing lasting
consumer satisfaction. .
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Our Values (continued)
– We are committed to the
highest standards of ethics
and integrity. We are
responsible to our customers,
to Merck employees and
their families, to the
environments we inhabit,
and to the societies we serve
worldwide. In discharging
our responsibilities, we do
not take professional or
ethical shortcuts. Our
interactions with all
segments of society must
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reflect the high standards we
profess.
– We are dedicated to the
highest level of scientific
excellence and commit our
research to improving human
and animal health and the
quality of life. We devote our
resources to meeting the
needs of consumers
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Our Values (continued)
– We expect profits, but only
from work that satisfies
customer needs and benefits
humanity. Our ability to
meet our responsibilities
depends on maintaining a
financial position that invites
investment in leading-edge
research and that makes
possible effective delivery of
research results.
– We recognize that the ability
to excel -- to meet society's
and customers' needs -Chang-Yang Lin
depends on the integrity,
knowledge, imagination,
skill, diversity and teamwork
of employees, and we value
these qualities most highly.
To this end, we strive to
create an environment of
mutual respect,
encouragement and
teamwork -- a working
environment that rewards
commitment and
performance and is
responsive to the needs of
employees and their families
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Global Market Challenges
• Political challenges
– Rules regulating transfer
of data
– Restrict/tax/prohibit
imports
– Local content laws that
specify the portion of the
value of a product that
must be added in that
country
• Geoeconomic challenges
– Too long to fly
– Difficult to communicate
in real time
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• Cultural challenges
– languages, cultural
interests, religions,
customs, social attitudes,
and political
philosophies: managers
must be trained and
sensitized to such
cultural differences
– Differences in work
styles and business
relationships: teams vs
individuals; one
leadership vs shared
leadership
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Global E-Business Strategies
The Transnational Approach
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A business must depend on its
information systems and Internet
technologies to help it integrate its
global business activities
A business must develop an integrated
and cooperative worldwide hardware,
software, and Internet-based
architecture for its IT platform.
Examples
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Transnational Strategies by
American Express
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Tactic: Global customer service
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IT Environment
• Global network linked from local branches and local
merchants to the customer database and medical
or legal referrals database
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Results
• Worldwide access to funds
• “Global Assist” hotline
• Emergency credit card replacement
• 24-hour customer service
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Transnational Strategies by
Benetton
• Tactic: Global sourcing and logistics
• IT Environment
– Global network, EPOS terminals in 4000 stores,
CAD/CAM in central manufacturing, robots and
laser scanner in their automated warehouse
• Results
– Produce 2000 sweaters per hour using
CAD/CAM
– Quick response (in stores in 10 days)
– Reduced inventories (JIT)
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Business Drivers for Global E-Business
Global customers
– People who may travel
anywhere or companies
with global operations
– Global IT can help
provide fast, convenient
service
Global products
– Products are the same or
are assembled by
subsidiaries throughout
the world
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– Global IT can help
manage worldwide
marketing and quality
control
Global operations
– Parts of a production or
assembly process are
assigned to subsidiaries
based on changing or
economic conditions
– Global IT can support
such geographic flexibility
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Business Drivers for Global E-Business
Global resources
– The use and cost of
facilities and people are
shared by subsidiaries of a
global company
– Global IT can keep track
of such shared resources
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Global collaboration
– The knowledge and
expertise of colleagues
can be quickly accessed,
shared, and organized to
support individual or
group efforts
– Global IT can support
such enterprise
collaboration
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Global ERP Issues
Gillette
Nypro
– ERP applications using
SAP and PeopleSoft
because they
automatically create
reports in different
languages
– Development work is
done in Boston,
deployment and screen
labeling is handled locally
to overcome language
barriers
– Runs an ERP system from
eBPCS
– Provides China plants
with networked ERP
systems
– Put control over ERP data
extraction and
manipulation in local
hands
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Key Questions for Global Websites
What content will you
translate, and what content
will you create from scratch
to address regional
competitors or products that
differ from those in your
country?
Should your multilingual
effort be an adjunct to your
main site, or will you make it
a separate site, perhaps with
a country-specific domain
name?
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What kinds of traditional
and new media advertising
will you have to do in each
country to draw traffic to
your site?
What are the legal
ramifications of having your
website targeted at a
particular country, such as
laws on competitive
behavior, treatment of
children, or privacy?
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Business Managers in
Information Resource Planning Process
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Assessing the current environment and proposing ideas
for the future computing environment

Being creative in thinking about IT applications and be
knowledgeable about her department’s information needs
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Involving during resource and funding justification
process
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Involving in the process of systems implementation and
training
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Creating an atmosphere that is conducive to acceptance of
the new applications
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Success Factors to Implement ERP
• Real commitment from
top management
• Conveying this
commitment
throughout the
company
• Sufficient resources
devoted to the project
including employment
of a consulting firm to
help implement the
ERP system
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• Sufficient managerial
and IS professional
time devoted to the
project
• Processes must be
changed to conform
those prescribed by the
ERP package
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