strategies and steps to e-business success chou-hong chen, ph.d. professor of mis school of business...
TRANSCRIPT
Strategies and Steps to e-Business Success
Chou-Hong Chen, Ph.D.Professor of MIS
School of Business AdministrationGonzaga University
Spokane, WA 99258, [email protected]
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
INFORMATION SYSTEMS
ORGANIZATIONS TECHNOLOGY
MANAGEMENT
INFORMATION
SYSTEMS
Dr. Chen, The Challenge of the Information Systems Technology TM -3
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Roles of Information SystemsRoles of Information Systems
AutomatesAutomates
Innovates/TransformsInnovates/TransformsInformatesInformates
IT problems and solutions
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
Problem Solution
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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.
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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
E-ChannelManagement
ProcurementNetwork
TradingNetwork
E-Customer Relationship
E-Commerce
E-Portal ManagementE-Services
SCM/ERP/Legacy Appls
Bu
sinesses
Bu
sinesses &
C
onsu
mers
1:NM:1 M:N
Knowledge Management/Business Intelligence
Infrastructure for e-Business Applications
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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? 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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Facilitating Services: Delivery, Escrow, Price Comparisons
The World Wide Web
Business Model:E-Catalog, Auctions, Name your price
Three key success factors for e-Businesses
Technology:
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Figure : B2C and B2B Internet Commerce in the U.S. (Source: Forrester Research)
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
1998 1999 2000 2001 2002 2003
B2C
B2B
Billion
$Bil
lion
$
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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
Buyers
Sellers
MarketSite
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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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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
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Two Major Elements determines Organization’s Success
Core Competency A Value-added
Business Model Value, value,
value…
N
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Core CompetenciesDetailed Customer Knowledge and FocusWe will seek to understand, anticipate, and be responsive to ourcustomer’s needs.
Large-Scale System IntegrationWe will continuously develop, advance and protect the technical
excellencethat allows us to integrate effectively the systems we design and
produce.
Learn, Efficient Design and Production SystemsOur design and production systems will be among the best in the
world,characterized by efficient use of assets, short time-to market,
short flowtimes, 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 ...
Products,Services
Customers,market,
competition
Vision
guide
Strategy
create
develop
Tactic
Vision
Mission
Policies
Goals
Metrics Values TimeHorizon
Objectives
Metrics Values TimeHorizon
Strategies
Tactics
Stages of
e-Business
(or IS)
Project
Strategic
Planning
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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 -32
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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
OperationsOutbound
Logistics
Marketingand Sales
Services
Administrative and Other Indirect Value Added
Administrative and Other Indirect Value Added
Primary Activities
Support Activities
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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
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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.