IT-Enabled Business
Transformation
Five levels of IT-enabled
business transformation
High
Degree of business
transformation
Business Scope Redefinition
Business Network Redesign
Business Process Redesign
Revolutionary
Levels
Internal Integration
Localized Exploitation
Low
Low
Range of potential benefit
Evolutionary
Levels
High
2
1
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
Inventory Control System
Internal Electronic Mail System
3
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.
4
2
Level 1
Localized Exploitation
„
Management Challenges
‰
‰
‰
Identification of high-value areas
Benchmark against best practice
Redesign performance assessment
5
Level 2
Internal Integration
„
Leveraging of IT capability to create a
seamless process — both technical
interconnectivity & business process
interdependence.
„
Example
-Lexus and Infiniti
6
3
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
7
Level 2
Internal Integration
„
Management Challenge
-Business process interdependence and technical
interconnectivity
-Performance reassessed criteria
-Benchmark results against best-in-class
8
4
Level 3
Business Process Redesign
„
„
Redesign key process for competing in the
future
Use IT capability for future organization
capability
9
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
10
5
Level 3
Business Process Redesign
„
Management Challenge
‰
‰
Articulate business rationale for redesign
Recognize organization issues and challenges
11
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.
12
6
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.
13
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.
14
7
Level 4
Business Network Redesign
„
Management Challenge
‰
‰
‰
Articulate of the firm’s strategy
Elevation of importance of business network
redesign
Redesign of performance assessment criteria
15
Level 5
Business Scope Redefinition
„
Redefining corporate scope enabled and
facilitated by IT functionality
16
8
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
17
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.
18
9
Strategic Management Challenge :
Alternative Approaches to BPR
High
Degree of business
transformation
Business Scope Redefinition
Business Network Redesign
Seek
Efficiency
Business Process Redesign
Enhance
Capabilities
Internal Integration
Localized Exploitation
Low
Low
Range of potential benefit
High
19
Perspectives of BPR
„
„
Seek Efficiency
- rectifying current weakness
Enhance Capability
- creating strategic capabilities for future
competition
20
10