Lecture 4 IT and E-Business Lifecycles

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Lecture 4IT and E-BusinessLifecycles
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General Questions

• General Questions -
• What is the Business Process Issue that I am
  trying to solve?
• What technology should be used?
• What is the impact on other business resources
  (including human)?
• What are the costs and benefits to be considered?
• Emphasis on Does the solution make sense?!?

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IT as an Essential Enabler

• IT permits companies to reengineer business
  processes by breaking existing rules
• Think inductively -- Instead to looking for
  solutions for existing problems, recognize new
  powerful technology first and then seek the
  problems it might solve
• Recognize business opportunities created by
  breaking long-standing rules

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Organizational Responses
Management and Business Process
Framework for Organizational and Societal Impacts
of Information Technology
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Lucas, 1975A descriptive model of information
systems in the context of the organizations
Management Action
Situational Personal Factors
Information Services Dept. Design and Operations
Policies, Attitudes
Contact Involvement
User Attitudes and Perceptions
Use of System
Decision Style
Analysis Action
Technical Quality of System
Performance
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Lessons From the Past

• Introducing information systems was the challenge
  of the 70s
• Successfully introducing Electronic
  Commerce/Electronic Business is the current
  challenge

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Failure to adopt MIS/IS Innovations in the 70s
Linked to

• absence of an IS champion
• lack of management support
• strain on managers time
• negative attitudes
• little education and training
• organizational, technical problems
• perceived gaps between expectations of system
  providers and users

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Success in adopting MIS/IS was linked to
Successful Adoption

• commitment
• executive sponsor
• quick feedback
• dedicated facilities
• software and hardware support
• training
• congruence of system and managerial expectations

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Success occurred when relative advantage was
shown in terms of
Successful Adoption (cont)

• time saved,
• benefits accrued
• competitive pressure decreased,
• making the firm flexible and profitable.
• positive relationship between manager and
  external consultant

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Benefits to Organizations

• Reduces the time between the outlay of capital
  and the receipt of products and services
• Supports business processes reengineering (BPR)
  efforts
• Lowers telecommunications cost - the Internet is
  much cheaper than previous communication
  technologies

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Reengineering The Path to Change

• Definition
• The fundamental rethinking and radical redesign
  of business processes to achieve dramatic
  improvements in critical, contemporary measures
  of performance, such as cost, quality, service,
  and speed.
• (Hammer Champy, 1993)

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Electronic Commerce/Electronic Business

• Is not about technology itself
• It is about business and how businesses use the
  available technology and applications to meet
  their business needs
• Improving effectiveness, efficiency, flexibility
  and capability to adapt to changing conditions

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Electronic Commerce/Electronic Business

• E-commerce/e-business implies the application of
  technology either
• as a solution to a business problem or need which
  involves the exchange of information between
  business partners
• as a means of grasping an opportunity

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Evaluating E-Commerce/E-Business

• Why use e-commerce/e-business?
• Need to change the way business is conducted
• Increasing competition to deliver increasing
  levels of product and service quality
• can assist to reduce the cost of doing business

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Business Issues When Implementing EC/EB

• Staffing issues
• Trading partner issues
• Business process issues
• Technology, implementation, and maintenance
  issues
• Control, Audit and Legal issues

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EC/EB Technologies and Applications

• need to be considered in the light of BOTH
• the benefits and direct and indirect costs of
  implementation (both tangible and intangible),
  and
• the costs of not implementing electronic commerce

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What EC/EB Does

• Collapse administrative, marketing, distribution
  layers
• reduce cost, cycle time
• Eliminate, rather than streamline, bureaucracies
• top-down structure replaced by consumer
  driven, bottom-up structure

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Component Parts of EC/EB

• Common business services for facilitating the
  buying and selling process
• Messaging and information distribution, as a
  means of sending and retrieving information
• Kalakota and Whinston

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Component parts of EC/EB (contd)

• Multimedia content and network publishing, for
  creating a product and a means to communicate it
• The Information Superhighway - the very
  foundation - for providing the highway system for
  EC/EB

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Three Pillars Supporting EC/EB

• Public policy, to govern such issues as universal
  access, privacy and information pricing
• Self regulation of business relationships through
  ethical standards
• Ethical standards
• Trust
• Technical standards, to dictate the nature of
  information publishing, user interfaces and
  transport across the entire network

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What Does EB/EC Imply?

• Labour intensive --gt IT Intensive
• Paper documents --gt Electronic documents
• Written signatures --gt Digital signatures
• Physical security --gt Electronic security
• Data and graphics --gt Multimedia
• Present environment --gt 2000 IT infrastructure

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The Impact of EC/EB on Traditional Retailing
System

• Disintermediation and Re-intermediation

• Disintermediation the removal of organizations
  or business process layers responsible for
  certain intermediary steps in a given value chain
• eliminating the traditional intermediaries, such
  as wholesalers, distributors, and retailers, to
  reduce the cost
• Re-intermediation the shifting or transfer of
  the intermediary functions, rather than the
  complete elimination
• intermediation such as electronic shopping malls,
  directory and search engine service, and
  comparison aids using agents creates the role of
  re-intermediation

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The Systems and E-Business Lifecycles
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Systems Development Lifecycle (SDLC)

• Three major activities
• Analysis understanding business needs
• Design conceptualizing computer-system solution
• Implementation construction, testing, and
  installation
• Two additional phases
• Project planning
• Support

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SDLC Concepts

• All projects use some variation of the SDLC
• SDLC is more than phases
• Principles of management
• Planning and control
• Organization and scheduling
• Problem solving

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Planning Phase

• Define problem
• Confirm project feasibility
• Produce project schedule
• Staff the project
• Launch the project

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Analysis Phase

• Gather information
• Define system requirements
• Build prototypes for discovery of requirements
• Prioritize requirements
• Generate and evaluate alternatives
• Review recommendations with management

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Design Phase

• Design and integrate the network
• Design the application architecture
• Design the user interfaces
• Design the system interfaces
• Design and integrate the database
• Prototype for design details
• Design and integrate the system controls

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Implementation Phase

• Construct software components
• Verify and test
• Develop prototypes for tuning
• Convert data
• Train and document
• Install the system

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Support Phase

• Objective Keep system running productively
  following initial installation
• End-user support
• Help desks
• Training programs
• Maintaining and enhancing computer system
• Enhancements
• Upgrades
• Maintenance

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E-Business

• E-Business Life Cycle
• Planning
• Marketing
• Fulfillment
• Maintenance Enhancement

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PLANNING

• Strategizing Reality
• Evaluate a companys position competition
• Set a course for years ahead
• Develop implementation plan

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STRATEGIZING

• Know Your Audience
• Become Internet Savvy
• Determine Long-term vs. Short-term Selling
• Define Your Competitors
• Evaluate Website Appearance

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STRATEGIZING (Contd)

• Select Product Range
• Manage Transaction Effectively Efficiently
• Design Shipment Process
• Be Prepared for Unexpected Changes

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ULTIMATE STRATEGY

• Vision
• What is your business trying to achieve?
• Resources
• How much can your business afford to build the
  right Website?
• Culture
• Is your business politically amenable for
  coordinating efforts to support e-business?

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PLANNING CONSIDERATIONS

• Create Maintain a Competitive Edge
• Reduce Operational Costs
• Improve Employee Communication Satisfaction
• Find New Markets for Products Services
• Improve relationships with Partners

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PLANNING CONSIDERATIONS (Contd)

• Create Distinct Distribution Channels
• Ensure Customer Satisfaction
• Adopt Sense of Entrepreneurship
• Improve Supply-Chain Management