chp02 trends
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e-bussinessTRANSCRIPT
Chapter TwoChapter TwoSpotting E-Business Trends
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What is a Trend?What is a Trend?
A trend is a compass for navigating a sea of chaos
Points the way to a new– Themes, like “aging demographics” or “decreasing
attention spans”– Cost curves - like Moore’s Law - decreasing
hardware and computing costs– Innovation - mobile devices
Trends are essential filters for managers so that they can separate signal from noise
“Look Before, or you’ll find yourself behind.” - Benjamin Franklin
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E-Business TrendsE-Business Trends
Trends: spotting, analyzing, and exploiting themes in technology, markets, etc.
– Ways to think further into the future– Identify ideas that will impact and disrupt business
Strategy: how to exploit e-business trends to create profits
– Screen opportunities, identify value– Translate trends into opportunities– Translate opportunities into strategy
Trend-spotting drives strategy
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E-Business TrendsE-Business Trends
Customer trends– Faster Service– Self service– More Product Choices– Integrated solutions, not piecemeal products
E-service - service and process trends– Convergence of sales and service– Seamless Support– Flexible fulfillment convenient delivery– Increased Process Visibility
“The rearview mirror is always clearer than the windshield.” - Warren Buffet (CEO Berkshire Hathaway)
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E-Business Trends (cont.)E-Business Trends (cont.)
Organizational trends– Outsourcing -- retain the core, outsource the rest– Contract manufacturing– Virtual Distribution, Private hubs and Public exchanges
Employee Trends– Hiring the Best and Brightest– Keeping talented employees
Enterprise technology trends– Integrated enterprise apps– Multi-Channel Integration -- user view integration– Middleware -- back-end integration
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General Technology Trends– Wireless Web Applications– Handheld Computing and Information Appliances– Infrastructure convergence– Application Service Providers – Web Services– E-learning tools and methods
E-Business Trends (cont.)E-Business Trends (cont.)
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Consumer Trends: Faster ServiceConsumer Trends: Faster Service
People want to maximize their limited available time
– Value for the time– Getting things done right everytime– Right levels of service– Entertaining and engaging experiences
Often, the answer is to integrate previously separate processes in fulfilling orders
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Consumer Trends: 100 Years of ConvenienceConsumer Trends: 100 Years of Convenience1893 – Sears and Roebuck offers first catalog1993 – Sears folds catalog operation1997 – online retailing takes off2000 – Amazon.com sends out print catalogs
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Self-Service: Empowered CustomersSelf-Service: Empowered Customers
Self-Service is Maturing– 24/7 ordering without sales personnel– Disintermediation
source: www.s1.com
Self-Service complementing Full-service: Example from the Insurance Industry
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Integrated Solutions, Not Piecemeal Integrated Solutions, Not Piecemeal ProductsProducts
One-stop life-needs providers– Wal-Mart
One-stop lifestyle providers– The Gap
One-stop life-path providers– Toys-R-Us
Long term drivers and demand for integrated solutions are clear
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Integrated Solutions, Not Piecemeal ProductsIntegrated Solutions, Not Piecemeal Products
Past -- Product-basedcompetition
Productfunctionality
Price
Service
• Comprehensive range of products and services
• Solution-oriented• Integrated & Personalized
• Lifetime value approach• What is the total cost of
ownership • What is the ROI?
• Customer self-service• Configurations geared to
needs• Simplified decision-making
Productand
service
Value
Customer empower-
ment
Today -- Solution-basedcompetition
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e-Service Trends: Integrated Sales and e-Service Trends: Integrated Sales and ServiceService
Cross-selling and up-selling while providing service.
Home Depot is in “perpetual service mode.”
Users expect more from a web site
Customers demand customized and consistent experience across
channels and products
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Seamless Support: Consistent and Reliable Seamless Support: Consistent and Reliable Customer ServiceCustomer Service
An interesting experience with AT&T– Getting a bill for $0.00– Receiving collection notices for $0.00
Moving from transactional only sites to relationship sites
– Must integrate marketing, selling and customer service into all aspects of the business and customer experience
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Flexible Fulfillment and Convenient Service Flexible Fulfillment and Convenient Service DeliveryDelivery
• Consumers expect prompt and accurate delivery of the goods they have ordered.
• Expectation -- “We’ll put up a website and ship stuff out. It’ll be great!”
• Result – Fulfillment is hard. Lots of .com fatalities after Xmas 1999
• Our understanding -- Catalog and Online fulfillment is hard:
– Average order size of 1.7 items– Picking individual items– No bulk shipments, individually packed
• It’s the supply chain, Stupid!
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Online FulfillmentOnline Fulfillment• Manufacturer sends less-than truckloads (LTL) to
warehouse• Cases stored in pallet racking• Cases moved to pick area• Workers pick items out of case, put in box, send to
customer via FedEx, USPS, UPS
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Increase Process VisibilityIncrease Process Visibility
• Let the customer have access to your tracking system
• Provide visibility into the supply chain
Information Flows
Goods Flow
ManufacturersWholesale
DistributorsSuppliers CustomersRetailers
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Organizational Trends: OutsourcingOrganizational Trends: Outsourcing
• Focus on core competencies
• Cost reduction on a global scale – IT enabled outsourcing models
• Global service outsourcing trends not local outsourcing anymore
Virtual enterprise designs– Requirement Boundary Spanning Coordination
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Contract Manufacturing: Become Brand Contract Manufacturing: Become Brand IntensiveIntensive
Separation of marketing and manufacturing, allowing companies to specialize in one or the other
Sara Lee example: “Move from a capital/asset (or manufacturing) intensive company to a knowledge (and marketing) intensive firm”
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Empower EmployeesEmpower Employees
• Give employees greater autonomy, decision making capability, advancement based on performance, e.g. Nordstrom
• Employee retention
• Don’t give employees technology, give them solutions
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Enterprise Technology Trends: Integrated Enterprise Technology Trends: Integrated Enterprise ApplicationsEnterprise Applications
Build vs Buy
ERP software: SAP, PeopleSoft, Baan
Best-of-Breed Approach mySAP.com Individual networked
applications Individual interfaces Overhead of maintenance Data replication High lifecycle costs
Seamless integration Open integration
architecture Highly flexible for new
business requirements (SCM, eProcurement, BI, CRM)
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Multi-channel Integration: Look at the Big Multi-channel Integration: Look at the Big PicturePicture
Consistent service regardless of which of the company’s channels the consumer is using.
Example: Banks with branches, ATMs, call center, etc.
Call centerBranch
Web
ATM, In-store
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Middleware: Support the Integration Middleware: Support the Integration MandateMandate
• Integrate old and new applications so that all data is available.
• Middleware
• Enterprise Application Integration (EAI)
• What’s Next – Web Services– Break large scale apps into smaller chunks– Reassemble those components into services– Aggregate internal and external information
services
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General Technology Trends: Wireless General Technology Trends: Wireless ApplicationsApplications
Shift away from a PC-centric dependence towards a next-generation multi-device accessibility
Internet will be embedded in an endless variety of applications
Embedded Internet appliances will appear in the familiar form of washing machine, television, and remote control
Most successful devices will be easy-to-use, task-oriented devices
– Leverage benefits of Internet access to enhance their core functionalities
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Handheld Computing and Information Handheld Computing and Information AppliancesAppliances
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Infrastructure Convergence: Voice, Data and Infrastructure Convergence: Voice, Data and VideoVideo
• Voice, data, video on same network– Goal: Unification of voice and data to support
customer contact anywhere, anytime, via any channel.
• Improved speed and quality
• New customer contact points (eg Web TV)– Interesting research strategy via WebTV
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Infrastructure Convergence: Voice, Data and Infrastructure Convergence: Voice, Data and VideoVideo
DeviceIndependence
TravelTravelHotspotsHotspots
OfficeOffice
VacationVacationHotspotsHotspots
HomeHome
Web
Intranet
Communication
E-Learning
Calendar
Voice
• Mobile IPMobile IP• Content Content
TranslationTranslation• Quality of Quality of
ServiceService• VPNVPN• Content Content
NetworksNetworks
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Trend Common AttributesTrend Common Attributes
• Effectiveness
• Efficiency
• Integration
• Ability to handle change
The core aspect in trend-watching is
balancing exuberance vs. uncertainty
E-Business E-Business Strategies, Inc.Strategies, Inc.
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