Steps to e-Business Success

Jason C.H. Chen, Ph.D.Professor of MIS

School of Business Administration

Gonzaga UniversitySpokane, WA 99258, USA

chen@jepson.gonzaga.edu

E-ChannelManagement

ProcurementNetwork

TradingNetwork

E-Customer Relationship

E-Commerce

E-Portal ManagementE-Services

SCM/ERP/Legacy Appls

Businesses

Businesses &

C

onsumers

1:NM:1 M:N

Knowledge Management/Business Intelligence

Focus on e-Business Applications

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Roles of Information Systems

Automates

Innovates/TransformsInformates

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eBusiness Key Concepts eBusiness

the 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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eBusiness Processes

WHY Customer Relationship

Redesign Business Processes (Outside-In)

Applying Technology

WHAT

HOW

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Why e-Business? The Information economy will make all

organizations reassess their positions with respect to their customers-supplier relationship.

“e-Business is bound to come and unless we are able to cope with the changes in this world, our competitiveness will decline.” this is a clear testament to the power

of the new information-based economy and a warning to all companies that inertia must be overcome and change embraced.

By Michiyo Nakamoto, Financial Times, Nov. 23, 1999

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Revolution, Revolution ... The e-Business revolution is

impossible to ignore. It is transforming businesses in

virtually every industry and reshaping the global economy.

Organizational structures and operational practices that have served business well since the Industrial Revolution are suddenly obsolete.

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Revolution, Revolution (continued) The entrenched distribution

networks that once served as formidable barriers to competition may suddenly become liabilities, unable to respond to the new demands of the marketplace.

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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Planning is everything ...

Products,Services

Customers,market,

competition

Vision

guide

Strategy

create

develop

Tactic

Vision

Mission

Policies

Goals

Metrics Values TimeHorizon

Objectives

Metrics Values TimeHorizon

Strategies

Tactics

Figure:Stages ofe-Business(or IS)ProjectStrategicPlanning

NTM -12

IT Planning: The Relationship Between Business, IS, and IT Strategies

PORTER’S FIVE COMPETITIVE FORCES MODEL

THE FIRMTRADITIONAL COMPETITORS

NEW MARKET ENTRANTS

SUPPLIERS

SUBSTITUTE PRODUCTS & SERVICES

CUSTOMERS

Threats

Bargaining power

NDr. Chen, The Trends of the Information Systems Technology TM -14

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Cost leadership Differentiation FocusExpanded generic strategies

Strategic positioning (e.g., internal efficiency)

Customer service and my own view ... Innovation

Porter’s Competitive Forces Strategies

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, SERVICESENVIRONMENT

TO GAIN COMPETITIVE ADVANTAGE

2.23Dr. Chen, The Trends of the Information Systems Technology

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Use of Porter’s Model• List players• Analyze business drivers• Devise a strategy• Investigate supportive information

technologies

N

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.

NDr. Chen, The Trends of the Information Systems Technology

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Activities of Value Chain

Inbound Logistics Operations

Outbound

Logistics

Marketingand Sales

Services

Administrative and Other Indirect Value Added

Primary Activities

Support Activities

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The Value Chain

Competitive

Adva

ntag

e

(Value)

A Transformation Model from Market to Customer

TM -21

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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? Porter’s model (commodities vs. differentiation from

competitor, e.g., DELL) New ways of pricing your products and services. SWAT, outsourcing N

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Seven-step Process (continued) 3. Know your market

assess your company’s 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 <--- 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

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Seven-step Process (continued)

5. Define Strategy define, select, and prioritize the initiatives

needed to implement the company’s 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 company’s 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.

SURFING THE NET

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THANKS and GO for your Successful e-Business!!

Vision

Mission,Principles,and Values

Goals / Objectives

Strategies

Plans

Tactics

Figure: Hierarchy of Leadership Tools

SURFING THE NET SEARCH ENGINE: tool for locating

specific sites or information on WWW

HYPERLINK: spot on screen, when clicked shifts to a new page or site

“PUSH” TECHNOLOGY: server streams relevant content to browser