e-business: information technology and business minder chen, ph.d. associate professor decision...

E-Business: Information Technology and Business

Minder Chen, Ph.D.

Associate Professor

Decision Sciences and MIS Area Coordinator

School of Management

George Mason University

Email: [email protected]

Sept. 22, 2004

forHunan University

EMBA Student

Exchange Program

mailto:[email protected]

E-Business - 2 © Minder Chen, 1996-2004

Outline

• Information Hierarchy

• Extended Enterprise & Enterprise Resource Planning (ERP)

• Information Architecture and Enabling Technologies

• Business Process Reengineering / Management

• Electronic Commerce

• Conclusions


Information Life Cycle

DecisionDecision

ActionAction

DataData

InformationInformation

• Intelligence• Design • Choice


Even the Caveman Needs Knowledge to Survive

The information-knowledge-wisdom hierarchy. The caveman has lots of information; he selects and organizes useful information into knowledge, but he does not achieve wisdom until he has integrated his knowledge into a whole that is more than useful than the sum of its parts. Source: Harlan Cleveland, "Information as a Resource," The Futurist, December 1982, 34-39.


Information Hierarchy

Knowledge

Information

Event

Data

Learning: Integration into strategic policy through experience

Analysis: Application to decision making

Observation: Description of events

Wisdom


Nolan 的信息时代演进图

自动化

信息化组织再造

DP – Mainframe/Mini 时代

Micro 时代

网络时代

1960 1980 1995 2010

产业经济转型与再造信息经济

创造性毁灭时代虚拟组织时代

层级式组织层级式组织

矩阵式组织网络式组织


E-Business and E-Commerce

E-Business

E-Commerce

Internet Commerce

Commerce


The Extended Enterprise

E-Business: Virtual and Dynamic Enterprise

SuppliersBackOffice

FrontOffice

Customers

Buy Make/Add Value Sell

Supply Chain Back Office Integration Demand Chain

ManufacturingFinance

Engineering

SalesSupport/Service

Marketing

Supply Chain Management Customer Relationship Management

Enterprise Resource Planning

© Minder Chen, 2001-2002


A Federation of Information Systems


ERP系統架構

中央資料庫

銷售與發送應用

報告應用財務

應用

製造應用

存貨與供應應用人力資源

管理應用

服務應用

供應商顧客

經理與股東

員工

銷售與顧客服務人員

後勤管理與工作人員


R/3 Logistics Process Flow

報價報價

核對發票核對發票

請購單請購單

收貨收貨

採購單採購單

報價報價

ＳＤ：銷售管理

供應商供應商

開立發票開立發票

經銷商

客戶

經銷商

客戶訂單訂單

交貨交貨

詢價詢價

進貨進貨出貨出貨

倉庫管理倉庫管理

基準生產計劃

基準生產計劃

MRPMRP

物料預測物料預測

PP :生產計劃管理ＭＭ：採購管理

詢價詢價

計劃訂單計劃訂單

採購分析採購分析生產分析生產分析品質分析品質分析銷售分析銷售分析庫存分析庫存分析

庫存管理庫存管理

核發

Ａ / ＰＡ / ＰＡ / ＲＡ / ＲＧＬＧＬＧＬＧＬ

ERSERS

ＦＩＦＩＦＩＦＩLIS

核發

銷售活動銷售活動銷售計劃銷售計劃

ＭＭ：庫存管理

生產工單

生產控制


Information Systems Triad

OperationalDatabase

InformationalDatabase

EnterpriseWorkflow

OLTP DSSEIS

Data Information

Knowledge

Messaging Systems

Workgroup Workflow

BusinessProcessWorkflow


Information System Applications


Information Needs


Architecture of Data Warehouse

CorporateOperationalDatabase

Information WarehouseEnd UserAccess Tools

• EIS• DSS• Report Writers• Spreadsheets

Summarized

Detailed

PastCurrent

DataBridging

BusinessEvent

Information

• Data extraction• Data filtering• Table joining• Translation• Re-Formatting

Projected

Derived

Data Bridging/Transformation


Dimensional ModelProduct• Name• Description• Size• Price

Promotion• Description• Discount• Media

Market Region• Description• District• Region• Demographics

Time• Weekday• Holiday• Fiscal

Product

Market

Promotion

Time

• Dollars• Units• Price• Cost

Time

RegionProduct


Pivot Table in Excel


Team Work & Groupware

Same TimeSame Time Different TimeDifferent Time

Multi-media presentation systems Key-pad based voting tools Facilitated meetings using a PC Networked PCs based GDSS

Project/team rooms Shared offices

Screen sharing Audio/video conferencing

E-mail Data & file sharing Group authoring tools Computer conferencing Work flow management systems

DifferentPlace

DifferentPlace

SamePlace

SamePlace


Generic Problem-Solving Process and TeamSpirit

Share informationDiscussion forumStructured brainstormingBrainstorming

Idea consolidation

Rate alternativeRank alternativesSelect alternatives Multicriteria evaluation

Idea generation

Idea Organization

Alternative Evaluation

TeamSpirit Toolbox

Ge

ne

ric

Pro

ble

m S

olv

ing

Pro

ce

ssD

ivergen

t D

ivergen

t

Th

inkin

gT

hin

king

Co

nverg

ent

Co

nverg

ent

Th

inkin

gT

hin

king

TeamSpirit MeetingManagement Tool

TeamSpirit is a Web-based group decision support system / creative group problem solving system. Every user can create and facilitate meetings.


Select a Meeting Agenda to Participate


Multi-Aspect Brainstorming


Rate Alternatives


Multicriteria Evaluation Tool


• Business Processes

• People-to-people connections

Individual

Teams

Enterprise Portal Strategy

Division

Enterprise

• Spectrum of sites – centralized in large scale farms or standalone

• Rich out-of-box solution for collaboration and portals

• Consistent user, developer and admin experience


Information AggregationEmployee or partner site aggregating information and applicationsEmployee or partner site aggregating information and applications

• Capabilities– Customizable

presentation & personalization

– Content and Document management and publishing

– Business Intelligence

– Information aggregation and search

– Taxonomy

– Enterprise Application Integration


Types of ProcessesDimensions & Type Examples IT Enabling Effects

Order from a supplier

Develop a new product

Approve a bank loan

Manufacture a product

Prepare a proposal

Fill a customer order

Develop a budget

Lower transaction costsEliminate intermediaries

Work across geographyGreater concurrency

Integrate role and task

Increase outcome flexibilityControl process

Routinize complex decision

Reduce time and costsIncrease output quality

Improve analysisIncrease participation

Adapted from: Davenport, T. H. and Short, J. E., "The New Industrial Engineering: Information Technology and Business Process Redesign," Sloan Management Review, Summer 1990, p. 17.

Organization Entity• Interorganizational

• Interfunctinal

• Interpersonal

Objects• Physical

• Informational

Activities• Operational

• Managerial


IT Capability and Their Organizational Impacts

Capability Organizational Impact and Benefit

Transactional Transform unstructured processes into routinized transactions

Geographical Transfer information across long distances easily to make processes independent of geographical areas

Automational Reduce or reduce human labor in a process

Analytical Bring complex analytical methods to bear in a process

Informational Analyze and present vast amount of detailed information about a process

Parallel Change sequential tasks in a process into parallel ones

Knowledge Mgmt. Capture and disseminate expertise to amplify human cognition

Tracking Allow real-time and detailed tracking of tasks status, and inputs and outputs of a process

Disintermediation Remove intermediaries and connect two parties in a process directly

Adapted from: Davenport, T. H. and Short, J. E., "The New Industrial Engineering: Information Technology and Business Process Redesign," Sloan Management Review, Summer 1990, p. 17.


Field operations are on their own

Field operations are on their own

High bandwidth networks, remote access, wireless network

High bandwidth networks, remote access, wireless network

Simultaneous centralization and decentralization

Simultaneous centralization and decentralization

New Thinking

Old Assumption Enabling Technology New Thinking

Only specialists can perform complex work

Only specialists can perform complex work

Knowledge base

systems, expert systems

Knowledge base

systems, expert systemsCase managers handle a case with no handoff

Case managers handle a case with no handoff

Managerial hierarchy is required for control& supervision

Managerial hierarchy is required for control& supervision

Accessible data & analytic tools, exception monitoring

Accessible data & analytic tools, exception monitoring

Self-managed teamsSelf-managed teams

Product development is a sequential activity

Product development is a sequential activity Common CAD/CAM

systems

Common CAD/CAM

systems Concurrent engineeringConcurrent engineering

We treat all

customers alike

We treat all

customers alike Comprehensive

customer data base

Comprehensive

customer data base Target marketing, customerized & personalized services

Target marketing, customerized & personalized services

We don't know what's in the order until we receive it

We don't know what's in the order until we receive it

Modeling and forecasting and inter-organizational IS

Modeling and forecasting and inter-organizational IS

Predictive order

processing

Predictive order

processing


Process Classification Scheme: AA Global Best Practice KB

Produce & deliver for

product organization

Produce & deliver for

service organization

Invoice & service

customers

Understand market & customer

Develop vision & strategy

Design products &

services

Market & sell

Develop & manage human resources

Manage information/knowledge

Manage financial & physical resources

Execute environmental management program

Manage external relationships

Manage improvement and change

Operating processes

Ma

na

ge

men

t &

su

pp

ort

p

roce

ss

es

Source: “A Note on Knowledge Management,” Harvard Business School 9-398-031, 1997.


• 30 steps, 5 departments, 19 persons

• Issuance application processing cycle time: 24 hours minimum; average 22 days

• only 17 minutes in actually processing the application

Department AStep 1

Department AStep 2

Department EStep 19

. . . .

Issuance Application

Issuance Policy

New Life Insurance Policy Application Process at Mutual Benefits Life Before Reengineering*

*Source: Adapted from Rethinking the Corporate Workplace: Case Manager at Mutual Benefit Life, Harvard Business School case 9-492-015, 1991.


The New Life Insurance Policy Application Process Handled by Case Managers

Case Manager

UnderwriterPhysician

Mainframe

LAN Server

PC Workstation

• application processing cycle time: 4 hours minimum; 2-5 days average

• Application handling capacity double

• Cut 100 field office positions


Reengineering Example

Which line is shorter and faster?

Cash LaneNo more than 10 items


Reengineered Process

Key Concept: • One queue for multiple

service points• Multiple services

workstation


Empowered Customer-Focus Processes

Values and Quality delivered to

Customers timely

Empowered Font-line worker

Customer-facing Process

Manager as Coach

Teamwork


Boss-Focus Processes

Tug of WarOut on a limb

Aiming the wrong target

De-powerment

Front-line Worker

Customer


Customers

• Obsess over your customers

• Remember that the Web is an infant– What do you have to offer that the physical world

cannot in order to attract customers?

• If you make one customer unhappy, he won't tell five friends -- he'll tell 5,000 on newsgroups, list servers, and so on.

– "Word of mouth" factor gets amplified on the Net

• The shifts of balance of power away from business and toward customer.

- Jeff Bezos


MOT Analysis Example

• Prio to MOT – Recognition

– Information gathering

– Comparison

• MOT – Applying for Credit Card

– Receiving Credit Card

– Using Credit Card

– Providing Information

– Changing and Upgrading

– Gifts giving

– Emergency Assisting

• After MOT– No usage follow-up

– Stop membership follow-up


End-to-End Processes

Customer

Manufacturing Inventory Mgmt.

Shipping

Marketing/Sales

Account Receivable


Think from the Customer Back

The CustomerThe Customer

Management

Organization

Functions/Processes

Activities/Tasks

DefineOutcomes

RedesignOutputs

DetermineActivities

DefineJob Responsibilities

DevelopOrganization Structure

* Adapted from The Price Waterhouse Change Integration Team, Better Change, Irwin, 1995, p. 163.


Reengineering & Customers*

• Paradigm Shift: – Make and sell Sense and service

– Mass marketing Micro-marketing

– Transaction marketing Relationship marketing

• IT Enablers– Multimedia: e-Learning

– Communication networks: Internet and intranet

– Scanning technologies: RFID

– Electronics commerce

– Customer databases: CRM

– Mobile computing

Source: James I. Cash, Jr., "Listen To Your Customers", Information Week, Feb. 27, 1995, p. 108.

TravelocityMicrosoft expediaPriceline.com


Is EC Appropriate for You?

Industries who set up virtual storefronts


EC Strategies: 4 Cs

CommerceCommerce

ContentContentCommunityCommunity

CustomersCustomers

Your competitor is just one-click away


Virtual Communities

Virtual Community

Users

• Money

• Content• Demographics

Providers

• Content• Hard goods• Games• Services

Other Websites

Advertisers

• Advertising


EC and Business Processes

Seller Customer

Co

rpo

rate

Dat

abas

es

Provide Info

Get customer

Provide info

Fulfill order

Support

Identify need

Find source

Evaluate offerings

Purchase

Operate, Maintain, Repair

Phone, fax, e-mail

Web site

Newsgroups

Net communities

Web site

EDI

Web site, phone, fax, e-mail, e-mailing list

Credit cards, e-cashP.O.s

Demos, reviews

Send info

Data sheets, catalogs, demos

Request info

Web surfing

Web searches, web ads

Deliver soft goods electronically


Business Models Based on the Value Chain in the Market Place

Raw material producer

Manufacturer

Distributor

Retailer

Consumer

ExchangeExchange

Examples: • B2B: alibaba.com• B2C: Amazon.com

• C2B: Priceline.com• C2C: eBay.com

C2B

B2C

B2C C2CNew Middleman

• Independent market operators

• Consortia

Service Providers: • Logistics• Financial


Trading PartnersSuppliersDistributorsBusiness Partners

E-Business Integration Imperatives

Heterogeneous PlatformsERP Application PackagesProprietary ApplicationsLegacy Applications

Consumers

REQUIREMENTSStandards based integrationConfigurable across applicationsBusiness process orientedLoosely coupledSupports an incremental approachScaleable, available, secure, manageable

B2BIntegration

EAI

B2CInternet /

Virtual Private Network


The B2C Business Models – Bricks, Clicks, Revolution and Evolution

Bricks Clicks

Bricks & Clicks

• Sat on the sidelines for the explosion • Evolved to online commerce• Online services are incremental• Not huge differentiators for clients• Source of convenience• Took advantage of lessons learned• Assets CHEAP from Click failures

• Mergers or sales of assets to Bricks• Folding bricks ventures into portfolio• Narrow focus of offerings

eBay, Amazon, Webvan, Wingspan Bank, Yahoo

Gap, Safeway, Wallmart

• Bricks organizations set up separate click organizations to give the required freedom to operate in the fast moving Click environment

or• Clicks organizations were created through VC capital

Wells Fargo, Safeway, Barnes and Noble


IT Technology Driven vs. Business Pulled

Information Technology

Information Technology

BusinessReengineering

BusinessReengineering

How can IT support business strategies and business processes?

Technology-driven

Business Vision & Strategy

Business Vision & Strategy

Business-pulled

How can business strategies be changed business processes be transformed using IT?


The Zachman Framework for Enterprise Architecture

What How Where Who When Where

Data Function Network People Time Motivation


人事物

地利

天時

天時、地利、人和Business environments • Market demands• Technology development• Social trends

Geographic distribution Localization


人事物

Man: Human Resource, EmployeesMarket: Customers

Machine: Property ， Facility

， TechnologyMaterial:

Raw material ， Product

Method: Technique ， Process

， Project ， Task

Money: Accounting ， Finance ， Investment

$$$ Message: Information

Man, Market, Money, Method, Machine, Material, Message

錢財訊息

資材

方法

人才顧客


朱子註解「格物、致知」

「所謂致知在格物者，言欲致吾之知，在即物而窮其理也。蓋人心之靈莫不有知，而天下之物莫不有理，惟於理有未窮，故其知有不盡也。是以大學始教，必使學者即凡天下之物，莫不因其已知之理而益窮之，以求至乎其極。至於用力之久，而一旦豁然貫通焉，則眾物之表裡精粗無不到，而吾心之全體大用無不明矣。此謂物格，此謂知之至也。」

e-business: information technology and business minder chen, ph.d. associate professor decision...

Documents

business minder chen

extended enterprise

information needs slide

useful information

information technology

lots of information

erp slide

ers li s slide