e-Business

Roadmap for success

Ravi Kalakota and Marcia Robinson
e-Business framework

ERP SCM

Selling Chain E-procurement

Management

CRM Knowledge
e-business Management
e-Business framework

e-business and e-commerce are not the same

e-business affects to the core of the enterprise
moving to e-business changes the structure
and processes of a firm radically
the stakes are high
From e-commerce to e-business

Some pioneer firms in US have already moved

from e-commerce to e-business (Dell,
Amazon.com, UPS, Cisco)
streamlined processes
integrated technology
new business model

-> competitive advantage

rules of e-business

Technology is no longer an aftertought in

forming business strategy, but the actual cause
and driver

ITis not part of the business, it is the business

Firms are forced to use new technology or get
out of the business
rules of e-business

Streamlining the structure and information

flows is much more powerful than moving and
manufacturing physical products

More flexible organization structure

Accelerated flow of information
Continuing transformation
rules of e-business

Inability
to overthrow the outdated business
design often leads to business failure

New business design must give the ability to

react quickly on customer demands
Core competence
Outsourcing
rules of e-business

New business design must create flexible

outsourcing alliances

Compatible technology between outsourcing

partners
Customers want more speed, better service,
personalization, and lower price
rules of e-business

Company can be the cheapest the most

familiar or the best to its customers

The cheapest by being value oriented

The most familiar with strong branding
The best with outstanding service and strong
customer relationship
rules of e-business

The tough task is to align business strategies,

processes and technology at the same time
and correctly

Strong leadership is important

Similarities to managing a company in crisis
e-business trends

Speed of service time is money

Self service easy and quick via WWW
Integrated solutions all under one roof

Integrationof sales and service

Consistent and reliable service
e-business trends
Contractmanufacturing and strong branding
Outsourcing and core competence
Process visibility for customers and allies

Employee retention learning, innovating,

motivating knowledge workers
Multichannel integration optimize information
flows from telephone, fax, www
Mobile computing and wireless applications
e-business design

Important part of the strategy of the firm

Things to analyze when creating e-business

strategy:
Use of new technology
Responsing to new customer expectations
Ability to make large changes
e-business design

Careful planning of e-business design makes

its execution more likely succesful
E-commerce technology must be embedded in
e-business design effectively
Management must have vision how to answer
to offering excellence in service, operations or
continuous innovation
e-business application architecture

Enterprise applications form the backbone for

architecture
Best possible integration of applications is
critical but hard to achieve
IT-infrastructure and business processes must
fit together
e-business application architecture

Clusters of enterprise applications

Customer Relationship Management (CRM)

Enterprise Resource Planning (ERP)
Supply Chain Management (SCM)
Selling-chain management
Operating Resource Management
Enterprise Application Integration
Business Analytics, Knowledge management
Customer Relationship
Management

Why CRM?

Old customers are more profitable

Dissatisfied customers become expensive
New customers are hard to get
CRM integrates sales and service for the
needs of e-commerce
Customer Relationship
Management

Using CRM, three phases

1) Acquiring new customers
2) Enhancing the profitability of customers
3) Retaining profitable customers

All phases are related, but company usually

has to choose one to be its primary focus
Customer Relationship
Management

CRM processes must be organized around

customer not marketing, sales or other
internal function
Organizational structures must fit CRM
Customer information should be able to flow
through organization and be available easily
Customer Relationship
Management

Types of integration in CRM infrastructure

Customer content
Customer contact information
Extended enterprise
Front-office and back-office systems
Customer Relationship
Management

Organizational challenges in implementing CRM

CRM cuts across business units

From silo-centric infrastructure to customer-
centric infrastructure
Issues with global operations
Selling-chain Management

Definition:Integrated order acquisition strategy

Selling-chain management tries to answer to
problems like:

Better support the work of sales people

Solution to fragmented order support
Integrated systems, get rid of rekeying orders
Connect different sales functions
Selling-chain Management

Goals in moving from functional sales to

process-oriented selling-chain management:

Easierordering for the customer

Add value for the customer
Possibility to order custom products
More effective sales process
Selling-chain Management

Case: Cisco and selling chain management

Order taking was integrated into operational

planning process
B-to-B commerce via Web
Faster delivery of customizable products
24h a day service and support
Enterprise Resource Planning

ERP forms the backbone of E-business

ERP is a combination of compatible software
applications
Top providers: SAP, Baan, Peoplesoft, Oracle
Enhances the internal information flows of the
organization
From legacy systems to ERP
Enterprise Resource Planning

Sales Production
Distribution Planning
(Order Entry) Integrated
Logistics

Human Accounting &

Resources Financials

Basic elements of a standard ERP-suite

Enterprise Resource Planning

Major reasons for popularity of ERP-systems

Replacing legacy systems

Greater control
Managing globalization
Handling new regulations easier
Integration of functions across the enterprise
Enterprise resource planning

3 implementation strategies of ERP:

Step by step
Big bang
Modified big bang
Enterprise Resource Planning

Stakes are high. ERP implementation may lead

to huge savings or a bankruptcy
Does not offer competetive advantage for a
long time
ERP can help to move resources from
supportive functions to core competence
Are firms becoming similar because of ERP ?
Supply Chain Management

What is causing the SCM boom?

e-business structural
e-commerce value migration
proposition Rapid Demand Fulfillment
Give the customers what they Internet-Enabled Supply
want,when and how they Chain Planning and
want,at the lowest cost execution
Supply Chain Management

SCM is process umbrella

SCM is coordination of material, information

and financial flows between and among all the
participating enterprises

Goals of SCM is interenterprise integration

Supply Chain Investment Trends

Worldwide dispersion of manufacturing and

distribution facilities
Channel unpredictability is the norm
Responsiveness over effiency
Accept lower margins to maintain and increase
market share
Supply Chain Management

SCM is where the action will be in the next

decade
company vs. company supply chain vs.
supply chain
enterprise focus partner focus direct focus
Service via SCM has become the Holy Grail for
competitive advantage
Applications for SCM

Two categories :
planning and execution

Planning modules
Order Commitment
Advanced Scheduling
Demand planning
Distribution Planning
Applications for SCM

Execution Modules
Order Planning
Production
Replenishment
Distribution
These apps only partial functional solutions
Need to have Integrated SC Application
Supply Chain Management

SCM is a prerequisite to doing business

SCM is business strategy issues
Opportunity to differentiate through supply
chain
SCM solutions market is in its infancy.
E-Procurement

Procurement is not purchasing

Close-loop process
requisition payment
Becoming top-managemnet issue
Case: M$ Market
Intranet based desktop ordering system for selected
partners
E-procurement chain management

Next Gen procurement apps:

Buy-side desktop
Buy-side centralized
Sell-side apps
e-procurement solutions
automate selection
end-to-end solution
control of preferred suppliers
E-procurement chain management

Verical Procurement Portals

Professional Buyers
-Control
-Effiency and cost reduction
-Supplier managemnet

Integration
Employees Sweet
Supplier
-Convenience Spot -Cost reduction
-Ease of Use -Clean orders
-Consistency
Knowledge-Tone Apps next gen of
Decision Support Systems

From compiling data to identifying key

customer trends and preferences
Employees expect high quality information, 24h
access and fast performance

Business of information sorting, extraction,

packaging and dissemination
Classes of Knowledge-Tone Apps

Customer Relationship DSS

Personalization
Supply Chain DSS
Visibility and certainty
Remote Performance Monitoring
Monitoring system, KPIs
SAP Strategic Enterprise Management
Classes of Knowledge-Tone Apps

Knowledge Management
Problems:
Can we define it?
Software vendors are distancing themselves from it
Low returns on investments

Simulation: What-if Scenario Analysis

E-business Strategy Creation

top-down analytical planning

The never-seen-again plan
The no-goals plan
The no-feedback plan
bottom-up just do it tactical planning
misinformed decisions
E-business Strategy Creation

Continuous planning with feedback

Knowledge building and capability evaluation
E-business desing
E-business blueprint
Application development and deployment
E-business design

Category killer
Channel reconfiguration
Transaction intermediary
Infomediary
Self-service innovator
Supply chain innovator
Channel mastery
E-business Strategy into Action

Biggestproblem still top level management

commitment
Types of e-business projects
incremental
breakthrough
platform