e-Business
Roadmap for success
Ravi Kalakota and Marcia Robinson
e-Business framework
ERP
SCM
Selling Chain
Management
CRM
E-procurement
e-business
Knowledge
Management
e-Business framework
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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
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rules of e-business
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Technology is no longer an aftertought in
forming business strategy, but the actual cause
and driver
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’IT is not part of the business, it is the business’
Firms are forced to use new technology or get
out of the business
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rules of e-business
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Streamlining the structure and information
flows is much more powerful than moving and
manufacturing physical products
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More flexible organization structure
Accelerated flow of information
Continuing transformation
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rules of e-business
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Inability to overthrow the outdated business
design often leads to business failure
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New business design must give the ability to
react quickly on customer demands
Core competence
Outsourcing
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rules of e-business
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New business design must create flexible
outsourcing alliances
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Compatible technology between outsourcing
partners
Customers want more speed, better service,
personalization, and lower price
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rules of e-business
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Company can be ’the cheapest’ ’the most
familiar’ or ’the best’ to its customers
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The cheapest by being value oriented
The most familiar with strong branding
The best with outstanding service and strong
customer relationship
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rules of e-business
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The tough task is to align business strategies,
processes and technology at the same time
and correctly
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Strong leadership is important
Similarities to managing a company in crisis
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e-business trends
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Speed of service – time is money
Self service – easy and quick via WWW
Integrated solutions – all under one roof
Integration of sales and service
Consistent and reliable service
e-business trends
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Contract manufacturing 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
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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
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e-business design
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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
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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
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Clusters of enterprise applications
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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
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Customer Relationship
Management
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Why CRM?
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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
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Customer Relationship
Management
Using CRM, three phases
1) Acquiring new customers
2) Enhancing the profitability of customers
3) Retaining profitable customers
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All phases are related, but company usually
has to choose one to be its primary focus
Customer Relationship
Management
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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
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Types of integration in CRM infrastructure
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Customer content
Customer contact information
Extended enterprise
Front-office and back-office systems
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Customer Relationship
Management
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Organizational challenges in implementing CRM
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CRM cuts across business units
From silo-centric infrastructure to customercentric infrastructure
Issues with global operations
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Selling-chain Management
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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
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Goals in moving from functional sales to
process-oriented selling-chain management:
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Easier ordering for the customer
Add value for the customer
Possibility to order custom products
More effective sales process
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Selling-chain Management
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Case: Cisco and selling chain management
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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
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Enterprise Resource Planning
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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
Distribution
(Order Entry)
Production
Planning
Integrated
Logistics
Human
Accounting &
Resources Financials
Basic elements of a standard ERP-suite
Enterprise Resource Planning
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Major reasons for popularity of ERP-systems
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Replacing legacy systems
Greater control
Managing globalization
Handling new regulations easier
Integration of functions across the enterprise
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Enterprise resource planning
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3 implementation strategies of ERP:
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Step by step
Big bang
Modified big bang
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Enterprise Resource Planning
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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-commerce value
proposition
Give the customers what they
want,when and how they
want,at the lowest cost
e-business structural
migration
Rapid Demand Fulfillment
Internet-Enabled Supply
Chain Planning and
execution
Supply Chain Management
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SCM is ’process umbrella’
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SCM is coordination of material, information
and financial flows between and among all the
participating enterprises
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Goals of SCM is interenterprise integration
Supply Chain Investment Trends
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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
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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
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Two categories :
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planning and execution
Planning modules
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Order Commitment
Advanced Scheduling
Demand planning
Distribution Planning
Applications for SCM
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Execution Modules
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Order Planning
Production
Replenishment
Distribution
These apps only partial functional solutions
Need to have Integrated SC Application
Supply Chain Management
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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
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Procurement is not purchasing
Close-loop process
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requisition  payment
Becoming top-managemnet issue
Case: M$ Market
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Intranet based desktop ordering system for selected
partners
E-procurement chain management
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Next Gen procurement apps:
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Buy-side desktop
Buy-side centralized
Sell-side apps
e-procurement solutions
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automate selection
end-to-end solution
control of preferred suppliers
E-procurement chain management
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Verical Procurement Portals
Professional Buyers
-Control
-Effiency and cost reduction
-Supplier managemnet
Employees
-Convenience
-Ease of Use
-Consistency
Integration
Sweet
Spot
Supplier
-Cost reduction
-Clean orders
Knowledge-Tone Apps next gen of
Decision Support Systems
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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
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Customer Relationship DSS
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Supply Chain DSS
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Personalization
Visibility and certainty
Remote Performance Monitoring
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Monitoring system, KPIs
SAP Strategic Enterprise Management
Classes of Knowledge-Tone Apps
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Knowledge Management
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Problems:
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Can we define it?
Software vendors are distancing themselves from it
Low returns on investments
Simulation: What-if Scenario Analysis
E-business Strategy Creation
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top-down – analytical planning
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The never-seen-again plan
The no-goals plan
The no-feedback plan
bottom-up – ”just do it” tactical planning
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misinformed decisions
E-business Strategy Creation
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Continuous planning with feedback
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Knowledge building and capability evaluation
E-business desing
E-business blueprint
Application development and deployment
E-business design
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Category killer
Channel reconfiguration
Transaction intermediary
Infomediary
Self-service innovator
Supply chain innovator
Channel mastery
E-business Strategy into Action
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Biggest problem still top level management
commitment
Types of e-business projects
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incremental
breakthrough
platform