Strategies and Steps to eBusiness Success

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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
• chen_at_gonzaga.edu
• Senior Consultant, Taskco.com.tw

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Outline of the Topics

• 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
MANAGEMENT
TM -3
Dr. Chen, The Challenge of the Information
Systems Technology
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Roles of Information Systems
Automates
Innovates/ Transforms
Informates
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IT problems and solutions
Problem
Solution

• 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

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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.

TM -6
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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

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eBusiness Key Concepts

• eBusinessthe strategy of how to automate old
  business models with the aid of technology to
  maximize customer value
• eCommercethe 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

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Infrastructure for e-Business Applications
Knowledge Management/Business Intelligence
E-Commerce
E-Customer Relationship
E-Channel Management
Procurement Network
Trading Network
Businesses Consumers
Businesses
1N
M1
MN
E-Portal Management E-Services
SCM/ERP/Legacy Appls
TM -9
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eBusiness Processes
WHY
Customer Relationship
Redesign Business Processes (Outside-In)
Applying Technology
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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.

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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.

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e-Business (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?

• 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

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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

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Three key success factors for e-Businesses
The World Wide Web
Technology
Facilitating Services Delivery, Escrow,
Price Comparisons
Business Model E-Catalog, Auctions, Name your
price
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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
Billion
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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
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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.

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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
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Solutions for e-Enterprise Organizations (e-Power
Corp.)

• 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

Sellers
MarketSite
Buyers
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Solutions for Internet Market Makers

• 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

Your Portal
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• Strategies to e-Business Success

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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

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Two Major Elements determines Organizations
Success

• Core Competency
• A Value-added Business Model
• Value, value, value

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Core Competencies

• Detailed Customer Knowledge and Focus
• We will seek to understand, anticipate, and be
  responsive to our
• customers 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?

• 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 ...
Vision
Customers, market, competition
Products, Services
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Stages of e-Business (or IS) Project Strategic Pla
nning
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TM -30
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IT Planning The Relationship Between Business,
IS, and IT Strategies
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PORTERS FIVE COMPETITIVE FORCES MODEL
Threats
Bargaining power
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TM -32
Dr. Chen, The Trends of the Information Systems
Technology
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Porters Competitive Forces Strategies

• Cost leadership
• Differentiation
• Focus
• Expanded generic strategies
• Strategic positioning (e.g., internal
  efficiency)
• Customer service
• and my own view ...
• 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 Porters 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

• 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.

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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
Primary Activities
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The Value Chain
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A Transformation Model from Market to Customer
TM -39
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• Steps to e-Business Success

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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

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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

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Seven-step Process (continued)

• 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.

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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?
• Porters 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 (continued)

• 3. Know your market
• assess your companys 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)

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Seven-step Process (continued)

• 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 lt--- Mission lt--- Goals/objectives lt---
  Strategies lt--- 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 (continued)

• 5. Define Strategy
• define, select, and prioritize the initiatives
  needed to implement the companys 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

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Seven-step Process (continued)

• 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

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Seven-step Process (continued)

• 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 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 companys 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 (continued)

• 7. Refresh Regularly (continued)
• 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

• 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.

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SURFING THE NET
Surf's Up!
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THANKS and GO for your Successful e-Business!!