1. IT-Enabled Business Transformation
From Automation to Business Scope Redefinition

2. Agenda
Introduction
5 Levels of Transformations
Conclusion
Q & A

3. Introduction
Team members
商研一
張菽珊
謝文淵
簡見安
林俊吉

4. Business Logic Evolution
1970s and 1980s:
exploiting experience curve for achieving low relative cost through vertical integration (efficiency enhancement).
1990s:
low cost, high quality, and fast/flexible response to customers’ need (capabilities enhancement).

5. Five levels of IT-enabled business transformation
High
Business Scope Redefinition
Degree of business
transformation
Business Network Redesign
Revolutionary Levels
Business Process Redesign
Internal Integration
Localized Exploitation
Evolutionary
Levels
Low
High
Low
Range of potential benefit

6. Level 1 Localized Exploitation
Leveraging of IT functionality to design focused, high-value areas of business operations
Example:
Customer Order Entry System
Toll-free Customer Service System

7. Level 1 Localized Exploitation
Strength
Easy to identify and exploit potential IT capability
Minimal organizational resistance to change
Weakness
Potential duplication of efforts with in the same organization
Lack of organizational learning

8. Level 1 Localized Exploitation
Management Challenges
Identification of high-value areas
Benchmark against best practice
Redesign performance assessment

9. Level 2 Internal Integration
Leveraging of IT capability to create a seamless process ----both technical interconnectivity & business process interdependence
Example
-Lexus and Infiniti

10. Level 2 Internal Integration
Strengths
-Supports the total quality movement
-Streamlines the organization process to deliver
improved customer service
Weaknesses
-limited impact if competitors using newer logic of
organizing

11. Level 2 Internal Integration
Management Challenge
-business process interdependence and technical interconnectivity
-Performance reassessed criteria
-Benchmark results against best-in-class

12. Enablers and Inhibitors

13. Level 3 Business Process Redesign
Redesign key process for competing in the future
Use IT capability for future organization capability

14. Level 3 Business Process Redesign
Strengths
-First mover advantage
-Not be hindered by historical process
Weakness
-Redesigning process might be
obsolete or outsourced to partners

15. Level 3 Business Process Redesign
Management Challenge
Articulate business rationale for redesign
Recognize organization issues and challenges

16. Level 4 Business Network Redesign
Leverage related participants in the business network to provide products and services
Exploiting IT functionality for learning from extended network

17. Level 4 Business Network Redesign
Strengths
Elimination of activities where the focal organization may not have required level of competence
Streamlining business scope to remain flexible
and responsive to fast-changing and diverse customer needs
Exploit sources of competence in the larger business network

18. Level 4 Business Network Redesign
Weaknesses
May not provide the requisite source of differential advantage if the participants in the business network not well-coordinated
Lack of a streamlined internal IT infrastructure could hinder the ability to learn from extended business network

19. Level 5 Business Scope Redefinition
Redefining corporate scope enabled and facilitated by IT functionality
Example: McGraw-Hill

20. Level 5 Business Scope Redefinition
Strengths
Opportunity to Create a more flexible and effective business entity
Substitution as an effective alternative to vertical integration
Weaknesses
Not developing a consistent competence for the future
Possibility of “Hollowing” the corporation

21. Level 5 Business Scope Redefinition
Management challenge
Creative mix of internal activities, external relationship and business arrangement
Assessing business success by measuring return on value added or return per employee

22. Conclusion— Alternative Approaches to BPR
High
Business Scope Redefinition
Degree of business
transformation
Business Network Redesign
Enhance Capabilities
Seek Efficiency
Business Process Redesign
Internal Integration
Localized Exploitation
Low
High
Low
Range of potential benefit

23. Any Question ?

24. Thank You !!!