Strategies and Steps to e-Business Success Chou-Hong Chen,

Strategies and Steps to e-Business Success Chou-Hong Chen,

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, Outline of the Topics Introduction of Information Systems and e-Business Strategies to e-Business Success Steps to e-Business Success TM -2

INFORMATION SYSTEMS ORGANIZATIONS TECHNOLOGY INFORMATION SYSTEMS MANAGEMENT Dr. Chen, The Challenge of the Information Systems Technology TM TM-3-3 Roles Roles of of Information Information Systems Systems Automates

Informates Innovates/ Transforms TM -4 IT problems and solutions Problem Research and Evaluation

Need for demos prior to purchase Complexity of electronic delivery of business class applications Complexity of corporate purchasing Knowledge

Technology changes too quickly to assess and eliminate employees skill gaps Shortened release cycles, multiple updates Decentralized workforces with rapidly changing technology needs Web-based and computer-based training coupled with research and evaluation tools e-Services Updates and Maintenance

Demos and evaluations E-Channel Engine (order, inventory, asset management) Flexible design for corporate purchasing and global delivery e-Learning Comprehensive info on new technologies Objective, centralized content Decision, support tools e-Commerce Training

Information overload Proliferation of new technologies Need for rapid adoption Purchasing and Delivery Solution Comprehensive online update service Centralized and streamlined enterprise-wide deployment of software and data TM -5

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 TM-6 -6 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 TM -7 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 TM -8 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 TM -9 eBusiness Processes WHY Customer Relationship WHAT Redesign Business Processes (OutsideIn) HOW Applying Technology TM -10 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. TM -11 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. TM -12 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.

TM -13 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 TM -14 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 TM -15 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 TM -16 Traditional versus eBusiness Models? C C B B C: Individual Consumer B: Business TM -17 Figure : B2C and B2B Internet Commerce in the U.S. (Source: Forrester Research) Billion $1,600

$1,400 $1,200 $1,000 B2C $800 $600 $400 $200 $Billion$ B2B $0 1998 1999 2000

2001 2002 2003 TM -18 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 TM -19 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. TM -20 What Makes a B2B emarket Company Succeed? Five Critical Success Factors for emarkets: Business model, market size, industry expertise, branding and distribution,

management execution hustle (not just the formulation of strategy) N TM -21 Solutions for eEnterprise Organizations (e-Power Corp.) Sellers MarketSite Buyers 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 TM -22 Solutions for Internet Market Makers Your Portal

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 TM -23 Strategies to eBusiness Success TM -24 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 TM -25 Two Major Elements determines Organizations Success Core Competency A Value-added Business Model

Value, value, value N TM -26 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.

TM -27 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. TM -28 Planning is everything ... develop Customers, market, competition

Vision guide Strategy create Tactic Products, Services TM -29 Vision Mission Stages of Policies e-Business Goals

(or IS) Project Metrics Values Strategic Planning Time Horizon Objectives Metrics Values Time Horizon

Strategies Tactics N TM -30 IT Planning: The Relationship Between Business, IS, and IT Strategies TM -31 PORTERS 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 TM TM-32 -32 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 TM -33 STRATEGIC ROLE OF INFORMATION SYSTEMS

STRATEGIC INFORMATION SYSTEM: CAN CHANGE GOALS, OPERATIONS PRODUCTS, SERVICES ENVIRONMENT TO GAIN COMPETITIVE ADVANTAGE 2.23 Dr. Chen, The Trends of the Information Systems Technology TM -34 Use of Porters Model List players Analyze business drivers Devise a strategy Investigate supportive information technologies N Dr. Chen, The Trends of the Information Systems Technology TM -35

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 Dr. Chen, The Trends of the Information Systems Technology N TM -36 Activities of Value Chain Support Activities Administrative

Administrativeand andOther Other Indirect Value Added Indirect Value Added Inbound Logistics Operations Outbound Logistics Marketing and Sales Services Primary Activities

TM -37 The Value Chain Co tit pe m ive Ad va nt a ge (Value) TM -38 A Transformation Model from Market to Customer TM TM-39

-39 Steps to eBusiness Success TM -40 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 TM -41

Seven-step Process 1. 2. 3. 4. 5. 6. 7. (continued) Start High Think Fresh Know Your Market Set Vision

Define Strategy Create Refresh Regularly TM -42 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. TM -43 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 TM -44 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 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: branding, customers, competition, supply chain, demand chain (e.g., auto online) TM -45 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 do not rush to strategies, actions, and results 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 TM -46 Seven-step Process

(continued) 5. Define Strategy define, select, and prioritize the initiatives needed to implement the companys eBusiness vision the strategy defines incremental actions are not enough how the company is going to get there. expect high potential returns and advantages

other factors to consider: process change, organizational change, technical architectures, creative needs, fit within overall vision TM -47 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 TM -48 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. TM -49 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. TM -50 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. TM -51

SURFING THE NET ! p U s ' f r u S TM -52 THANKS and GO for your Successful e-Business!! TM -53

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