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E-Business 2.0: Roadmap for Success
Book Summary
1: Moving from e-Commerce to e-Business
Few concepts have revolutionized business more profoundly than e-commerce. Simply put, the streamlining of interactions, products, and payments from customers to companies and from companies to suppliers is causing an earthquake in corporate boardrooms. Managers are being forced to reexamine traditional definitions of value, competition and service in the new millennium.
To effectively compete in the e-commerce world, a company must structurally transform its internal foundation. This structural change requires a company to develop an innovative e-business strategy, focusing on speed to market and breakthrough execution of service. Firms seeking to compete in the e-commerce world must also develop a potent e-business infrastructure oriented toward continuous improvement and ceaseless innovation.
In this chapter, we’ll look at the mechanics of e-business, what it is, its corporate and economic impacts, and how e-business is radically changing the market. A core component to successful e-business practice is assessing and redesigning how your firm provides value to its customers. Included in this chapter are our recommended steps for disaggregating these components of customer value and reaggregating them into the value chains, which support the e-business model.
2. Spotting e-Business Trends
Managers can no longer afford to believe that today looks like yesterday and tomorrow will be more of the same. They must learn to separate the few worthwhile kernels (trends) from bushels of chaff (fads). Separating fads from trends is critical for e-business strategy. The essential difference is that trends are global, tent to last approximately five to 10 years, and may evolve dramatically.
In this chapter, we present 20 trends — in technology, consumer buying habits, service and processes, organizations, and enterprise technology — which will shape the future of business. We identified these trends by analyzing the social, economic, and technological transformations in the present, which hold the greatest potential for success in the future. Trendspotting helps you seize tomorrow's opportunities before the competition, and capitalize on them before the landscape shifts again. It's an art and skill you can learn. See how these trends impact e-business.
3. Digitizing the Business: e-Business Patterns
E-business is changing processes, jobs and lives. The tricky part is figuring out which changes actually matter. Successful managers anticipate the impact of recent economic and technical trends on their current business model and its accompanying business practices. These managers act before the economic ground shifts beneath them. They stake out opportunity after opportunity and capitalize on each before their competitors whose superficial focus keeps them unaware of the changing business patterns beneath the world of business-as-usual.
As a result, many CEOs are asking themselves: Under what business models does my company and industry currently operate? How do we conceive a new model to ensure our future success? Many of the CEOs we have met over the years are overwhelmed by these questions. To answer them, they enlist the help of strategy-consulting firms, academics and other business gurus – advisors who seem to generate new theories every few months, often creating their own form of chaos. For the practicing manager, cutting through this cacophony of advice can be daunting. What’s to be done? What are the first steps toward creating and implementing an e-business model that meets our future needs?
The journey toward creating new digital strategies for your firm starts by answering the following questions:
- Which business models are currently taking hold in my industry and why? Do I clearly see the business model changes behind the apparent chaos in my industry?
- Which set of strategic moves puts me in the best position? Is my organization capable of adapting to the required business model changes?
In this chapter we highlight several emerging e-business models including e-channels, click and brick, e-portals, e-market makers and pure E. As you read the chapter, ask yourself with which of these emerging business patterns is your company attempting to compete. Reflect on the pattern’s business requirements and whether it is a good fit for your firm. Answering these questions will help you get started with assessing your company's digital strategy.
4. Thinking e-Business Design: More Than Technology
In 2000, the war for e-market dominance may seem to have been won by first movers -- the dot.com companies who reached the market first. But in reality the war has just begun. While these early entrants have won many battles, we are in the early stages of the conflict between the challengers and the established firms against which they compete. The battlefield is shaped by three dominant factors driving the new economic revolution: the shift from supply chains to demand chains, the emergence of web and mobile commerce, and the escalating pace of technological innovation. These are just three reasons why business-as-usual has changed forever.
In order to thrive in this dynamic environment, companies must consciously choose the next phase in their growth and evolution: the age of continuously innovating e-business design. In this new era, competition is not primarily between one product versus another, or one technology versus another. The true competition is between the viability of traditional business design in a business environment increasingly dominated by e-business design.
The challenge confronting today’s manager is in the creation, execution and ongoing evolution of a successful e-business design. How do you craft an e-business design? How do you transform a traditional business design into an e-business design? In this chapter, you’ll learn e-business design secrets from three successful market leaders. You’ll learn the right questions to ask and the right answers to seek.
5. Constructing the e-Business Architecture: Enterprise Apps
Many businesses raced onto the Net only to discover -- quite painfully -- that a Web presence doesn't spell automatic success. If you attempt to win the business of the e-customer with an application architecture that is not rock-solid and bullet-proof, you will succeed only in alienating them. Clearly, the business logic and knowledge contained in enterprise software applications provide the foundation upon which leading companies build their e-Business designs.
The e-Business design built on an application architecture is no longer merely being paid lip-service; it’s become a boardroom topic as more companies than ever integrate applications to streamline operations and compete in the e-Commerce arena. But disparate applications are like modular building blocks—they have to be put together systematically to create an e-Business enterprise.
In this chapter, we’ll show you what application integration is, why it’s important, and what business and technology megatrends are driving application integration. We present real-life case studies of companies that have embraced application frameworks and explain how they did it. We then show how you can integrate various applications to create an e-Business architecture.
6. Integrating Processes to Build Relationships: Customer Relationship Management
Today, customers are in charge. It is easier than ever to comparison shop and, with a click of the mouse, switch companies. As a result, customer relationships have become a company's most valued asset. These relationships are worth more than the company’s products, stores, factories, web addresses and even employees. Every company’s strategy should address how to find and retain the most profitable customers possible.
Today's customers make the rules, and if organizations are to survive, they must do business in any way the customer wants. However, this is easier said than done. Most companies consider themselves customer focused, but in reality, they’re product-centric. Meanwhile, e-commerce has increased customer expectations, and customer expectations have raised the bar on service levels. If companies fail to leap over this hurdle of ever-rising service standards, they’re out of the game.
Creating a customer focused company starts with a Customer Relationship Management (CRM) strategy, which must include process reengineering, organizational change, incentive program change and a totally revamped corporate culture. In this chapter, we’ll take the often-vague notion of customer focus and put it in a concrete application framework. We’ll dissect customer relationship management and show you how to add it to your arsenal. We present the tools you’ll need to build an excellent customer relationship infrastructure.
7. Transforming Customer Contact into Revenue: Selling-Chain Management
E-Business presents us with new sales channels such as the self-service and mobile sales force. These new channels are rapidly expanding in importance. We are beginning to see selling-chain software applications that integrate and streamline the sales and order cycle by moving information faster between buyers and sellers resulting in buyers making quicker, more confident decisions.
Companies selling products and services over multiple channels require a new generation of e-business sales applications. Next generation selling applications must support traditional direct and indirect selling channels to maximize revenue channel effectiveness and to establish a common, enterprise-wide view of the customer. These applications must allow companies to target products, services, and web content to individual customers. Without these applications, companies will be unable to execute successful e-business strategies. They may be forced to rely exclusively on either point solutions, or on traditional human-assisted sales channels for their revenue streams.
In this chapter, we examine the future implications of sales automation in an integrated, multi-channel e-business environment. We discuss the business trends driving the corporate use of selling-chain solutions. In the future, success in sales will require a significant shift in strategy. The chapter also contains a roadmap for building an integrated order acquisition application framework and discusses the framework’s key features including on-demand product availability, pricing, and interactive configuration capability.
8. Building the e-Business Backbone: Enterprise Resource Planning
When a customer buys something from a Web site, store, or a call-center a response is automatically triggered in your sales, accounting, planning and logistics applications. To put it simply, e-commerce is the front-office and enterprise resource planning (ERP) the back office.
ERP apps reshape a company’s back-office structure because they address a difficult IT problem – overcoming the integration challenges posed by system portfolios containing disconnected, uncoordinated applications that have outlived their usefulness. While the Web stampede and Internet gold rush have seized most of the media spotlight, the corporate world’s steady embrace of ERP apps is one of the most significant business and technological events of the 1990s.
With the rise of e-Business, ERP in its current form has rapidly approaching the end of its reign as the central focus of the business applications universe. Today’s managers must assess what this change means for them by analyzing the following questions:
- What is the role of the ERP apps in the emerging e-Business world?
- How do companies leverage the investments they’ve already made in ERP apps?
In this chapter, we discuss the evolution of ERP in relationship to the e-Business world. We discuss ERPs historical roots in MRP II and its possible future forms as CRP and XRP. The chapter also presents real-world examples of how e-leaders are using ERP to gain operational efficiencies. However, as many firms have discovered, adopting an ERP solution is not pain free. It significantly affects a company’s architecture, processes, people, and procedures. Today’s senior management must make the right choices when creating their e-Business back-office.
9. Implementing Supply Chain Management and e-Fulfillment
Starting an e-Business takes ideas, capital, and technical savvy. Operating one, however, takes supply chain management (SCM) skills. A successful SCM strategy is based on accurate order processing, just-in-time inventory management, and timely order fulfillment. SCM's increasing importance in recent years illustrates how a tool that was a theoretical process ten years ago is now a hot competitive weapon.
SCM isn’t a technology issue. It's a business strategy for creating new, interesting opportunities. Many companies, such as Toys 'R' US, 3M, and Kroger have the brand name and the old-economy assets. But mastering their direct-to-consumer supply chain strategy hasn't been easy. Before implementing a SCM component as part of your e-Commerce strategy, make sure you've invested adequately in technology and in strong fulfillment. Also make sure your company's order processing and its pick, pack and ship operations are tightly integrated.
In this chapter, we’ll define SCM and ask the following questions: What will the supply chain look like in the year 200X? Do you know how to diagnose your company’s supply chain problems—and cure the root problem? Is your company ready for the new form of supply chain? Don’t panic. The answers are here in the form of a supply chain roadmap. And to make your job even easier, we also present eight steps to setting up your company’s e-supply chain architecture.
10. Demystifying e-Procurement: Buy-Side, Sell-Side, Net Markets, and Trading Exchanges
Inefficient and maverick buying habits, redundant business processes, and the absence of strategic sourcing are the primary symptoms of poor procurement practices. For today’s industrial-age companies to become tomorrow’s e-Business leaders their current procurement practices must change. As with any successful e-Business effort, efficient procurement strategies integrate a company’s business workflow with a robust technological infrastructure. Effective procurement strategies drastically reduce the amount of paperwork a firm’s employees must complete and lets them focus on their core responsibilities instead.
The spread of e-Commerce is revolutionizing procurement practices. Along with the rise of the Internet itself, Internet Trading Exchanges (ITE) represent one of the most exciting market developments of recent years. These exchanges alter the process by which raw materials are converted into products and delivered to customers. Businesses will increasingly implement requisitioning software to automate and streamline their requisition, approval, fulfillment, and payment workflows.
This chapter discusses the new wave of e-Procurement applications being deployed by companies seeking to radically improve their procurement process. It explains the evolution of e-Procurement practices from simple buy-side solutions to complex supplier/buyer marketplaces. The chapter discusses key e-Procurement concepts, such as the ITEs mentioned above, and their relationship to a company’s business processes and technology. The chapter also provides an easy-to-follow e-Procurement roadmap to assist managers on their journey to the procurement model of the future.
11. Business Intelligence: The Next Generation of Knowledge Management
Conventional wisdom says knowledge is power. An undifferentiated mass of information is not knowledge. Corporate intelligence results from a company using its intellectual resources and capabilities to bring focus, clarity, and meaning to the large volumes of information and data made available by today’s technology. Attempting to harvest knowledge without having the necessary analytical tools can render a company powerless. As companies adopt responsive, event-driven e-business models, they invest in new knowledge frameworks to help them respond to changing market conditions and customer needs.
The challenge is how to transform the incredible amount of valuable data locked away in a company’s applications, storage platforms, and databases into new revenue opportunities. Converting data into knowledge is the job of applications known as Business Intelligence (BI). BI is an emerging group of applications designed to organize and structure a business’ transaction data so that it can be analyzed in ways beneficial to company decision-support and operations.
In this chapter, we examine BI's capability to tailor information content, format, and interaction to the needs of individual users. The trend provides customized and personalized information to customers and other end users through a variety of channels including email, pagers, faxes, or Web pages. We review the basic elements upon which BI is built—personalization, analysis and segmentation, reporting, what-if analysis—that form the foundation of BI applications. We also examine several areas where BI is being used including employee benefits management, customer management, and information retrieval. The chapter concludes with an easy-to-follow manager's guide for setting a BI framework in your firm.
12. Developing the e-Business Design: Strategy Formulation
We are just a few minutes past the e-Business “big bang.” e-Business technology is creating a seismic shift in the way companies do business. E-Business innovation is a "top of mind" issue for most business leaders, driven in part by the rapid rates of innovation in customer, internal, and supplier-facing processes.
An urgency to innovate is sweeping across all industries as managers search for the next big idea that will transform their business or rewrite the rules of competition. Just knowing the importance and structure of e-Business is not enough. You need to create and implement a plan that allows you to make the transition from an old business design to a new e-Business design.
The e-Business planning process may sound like so much common sense, but doing it right requires an ongoing, unrelenting commitment of time and energy. Many, if not most, companies are unwilling to make the commitment. Yet in a dynamic marketplace, that’s a perilous strategy because the distance from hero to zero is rather short.
This chapter is designed to help new entrepreneurs and managers in traditional companies, unlock the mysteries of e-Business strategy formulation. It is meant to help organize and gather the information managers need to initiate a highly focused e-strategy aligned with corporate goals. By answering the questions posed here, managers can gain a better understanding of issues, tradeoffs, bottlenecks and traps in setting an appropriate direction.
13. Translating e-Business Strategy into Action: e-Blueprint Formulation
Interestingly enough, many companies plan ingenious strategies in response to competition and marketspace innovations. Yet few firms excel at translating strategy into action. If you ask these same managers how well their organizations have executed past projects and to assess their current ability to reach strategic goals, you’ll hear a litany of frustration and little hope for success.
The problem has often been a lack of tools for managers to communicate both their e-Business strategy and the processes and application frameworks that will help them implement it. The e-Business blueprint provides the tools to support management with implementing this foundation. The e-Blueprint creation process covers both infrastructure and application projects and provides a roadmap to help companies translate their e-strategies into actions.
This prescriptive chapter explains how to span the gap between e-Business strategic planning and execution. The chapter also:
- Details the steps you must take when building an e-Business blueprint
- Presents the business case for making e-Business investments
- Discusses the management issues and challenges you must confront when developing an e-Blueprint
- Provides a project execution checklist and the top ten ways companies fail at turning strategy into action.
14. Mobilizing the Organization: Tactical Execution
Every business has two needs: 1) developing a strategy for achieving future competitive advantage and financial success, and 2) executing this strategy quickly enough to beat competitors to the desired markets. However, in the e-Business environment, meeting these needs is a complicated task, since planning and execution often occur simultaneously.
Tactical execution means making the e-Business blueprint operational. As discussed in Chapter 13, the e-blueprint is the link between a company’s e-strategy and the strategy’s execution. It consists of the priorities, projects, and resources required to bring a proposed strategy to market. Tactical execution is how a company’s e-blueprint becomes a business reality.
Successful tactical execution requires risk-taking, attention to detail, and discipline. The demand for e-Commerce, e-Business and m-commerce projects is growing rapidly. In attempting to respond to this increasing demand, today’s IT organizations are frantically managing multiple projects, resources, and customer relationships in a fast-paced, and sometimes hectic, business environment.
To do so without an effective, disciplined project management approach in place, can make e-Business initiatives feel like a "juggling act" where its only a matter of time before something get’s dropped. Disciplined project management means setting a clear project direction, committing the necessary resources to those projects, and defining and managing a quality product development process. This chapter highlights some of the most common project implementation pitfalls and lays out the roadmap for successful tactical execution. |
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