1. 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
Senior Consultant, Taskco.com.tw

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

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

4. Roles of Information Systems
Automates
Informates
Innovates/
Transforms

5. 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

6. 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 -6

7. 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

8. 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

9. Knowledge Management/Business Intelligence E-Customer Relationship
Infrastructure for e-Business Applications
Knowledge Management/Business Intelligence
E-Commerce
E-Customer Relationship
Procurement
Network
Trading
Network
E-Channel
Management
Businesses & Consumers
Businesses
M:1
M:N
1:N
E-Portal Management
E-Services
SCM/ERP/Legacy Appls
TM -9

10. eBusiness Processes WHY Customer Relationship
WHAT
Redesign Business Processes (Outside-In)
HOW
Applying Technology

11. 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.

12. 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.

13. 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.

14. 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

15. 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

16. Three key success factors for e-Businesses
The World Wide Web
Technology:
Facilitating
Services:
Delivery, Escrow,
Price Comparisons
Business Model:
E-Catalog, Auctions,
Name your price

17. Traditional versus e-Business Models?C C B B
C: Individual Consumer
B: Business

18. Figure : B2C and B2B Internet Commerce in the U. S
Figure : B2C and B2B Internet Commerce in the U.S. (Source: Forrester Research)
Billion
$Billion$

19. 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

20. 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.

21. 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)
branding and distribution,
management execution hustle
-- efficiency N

22. 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
Sellers
MarketSite
Example: Today, with ERP applications, enterprises work internally. With Commerce One’s solutions you work between enterprises
Commerce provides strategic ecommerce solutions that allows your enterprise to optimize commerce between all your customers, partners and service providers
Buyers

23. 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
Solutions for e-Marketplaces
Value Proposition:
Strategic e-commerce capability to automate their buying wehter ad hoc, catalog based or RFQ - collaborative interactions with your trading partmers…..infrastructure/system capabilities
Truly leverages the power of the Internet

24. Strategies to e-Business Success

25. 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
the content owners must buy into the strategy and have the confidence of senior executives,
often the decisions the content owners make may have serious consequences to the organization and its strategy
Buy-in and open discussions are keys to success N

26. Two Major Elements determines Organization’s Success
Core Competency
A Value-added Business Model
Value, value, value…
No longer are
Products and/or
Services N

27. Core Competencies Detailed Customer Knowledge and Focus
We will seek to understand, anticipate, and be responsive to our
customer’s 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.

28. 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.

29. Planning is everything ...
Vision
develop
Customers,
market,
competition
guide
Strategy
create
Tactic
Products,
Services

30. Stages of e-Business (or IS) Project Strategic Planning Vision Mission
Policies
Goals
Metrics
Values
Time
Horizon
Objectives
Strategies
Tactics
Stages of
e-Business
(or IS)
Project
Strategic
Planning
Vision: A vision is what an organization wants it to be, and it is a message that every employee should not only hear, but should also believe in. The company’s vision is about its values, beliefs, quality, and the future.
Mission : A statement of the basic purpose or purposes for which the organization exists. It tell an organization what it is, why it exists, and the unique contribution it can take (what it does not do, as well as what it does). For example, the utility company could be: "To supply energy to consumers.”
Goals vs. Objectives: Broad statements of the ends the organization intends to accomplish in order to fulfill its mission. Objectives are more specific, measurable elements of a goal. For example, the utility company might have increased profitability and energy utilization as goals, measured by objectives such as specific increases in earnings per share and kilowatt hours used.
Strategies vs. Tactics: Strategies are general approaches that show how goals should be achieved, and tactics are more specific guides to actions that would implement strategies. For example, a company strategy of "becoming the low-cost producer in its industry" would probably require a tactic such as increasing investments in automation.
Policies: General guidelines that direct and constrain decision making within an organization. For example, many organizations have a policy of "promoting from within" that guides managers in filling job openings that occur. Policies are implemented by rules and procedures which are more specific statements that direct decision making. For example, procedures to follow in hiring employees, and rules protecting employee job rights, wold help implement a policy of promoting from within an organization.
Strategic Planning: It deals with the development of an organization's mission, goals, strategies, and policies.
Tactical Planning: It involves the design of tactics, the setting of objectives, and the development of procedures, rules, schedules, and budgets.
Operational Planning: It is a planning done on a short-term basis to implement and control day-to-day operations. N
TM -30

31. IT Planning: The Relationship Between Business, IS, and IT Strategies
TM -31

32. PORTER’S FIVE COMPETITIVE FORCES MODEL
Threats
NEW MARKET ENTRANTS
SUBSTITUTE PRODUCTS & SERVICES
THE FIRM
TRADITIONAL COMPETITORS
SUPPLIERS
CUSTOMERS
Bargaining power N
Dr. Chen, The Trends of the Information Systems Technology
TM -32

33. Porter’s 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

34. 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

35. 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

36. 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. N
Dr. Chen, The Trends of the Information Systems Technology

37. Activities of Value Chain
Support Activities
Administrative and Other
Indirect Value Added
Firm as a value chain – describe the firm as a set of interrelated activities (value chain).
-- Every firm is a collection of activities performed to design, produce, market, develop, and support its product.
-- it is a reflection of
its history,
2) its decision making, and
3) its approach to implementing its decisions and
4) underlying economic of the activities themselves.
Primary activities are those involved in taking the raw materials and developing the products and services for the customers. There are five generic sets of primary activities.
Support activities can be divided into four generic categories.
Though firms in the same industry may have similar value chains, the value chains of competitors often differ.
First of all, the value chains help the firm deliver products and services to its customers.
From the customer’s point of view, the value delivered by a firm (to the customers) depends on the superiority of its products or service relative to the price paid by the customer.
The value appropriated by the firm, on the other hand, depends on the value created by the customers, but in relationship to the firm’s cost structure.
In general, the value appropriated should exceed the opportunity cost of capital.
Inbound
Logistics
Operations
Outbound
Logistics
Marketing
and
Sales
Services
Primary Activities

38. The Value Chain (Value) Competitive Advantage
IT can profoundly affect one or more of these activities -
- sometimes simply by improving effectiveness,
- sometimes by fundamentally changing the activity, and
- sometimes by altering the relationship between activities.
In addition, the actions of one firm can significantly affect the value chain of key customers and suppliers.
Operations: Boeing -- Lean Manufacturing

39. A Transformation Model from Market to Customer
TM -39

40. Steps to e-Business Success

41. 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

42. 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

43. 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.

44. 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

45. 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)

46. 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

47. 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

48. 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

49. 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.

50. 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.

51. 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.

52. SURFING THE NET
Surf's Up!

53. THANKS and GO for your Successful e-Business!!