IT-Enabled Business
Transformation
From Automation to Business
Scope Redefinition
Agenda
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Introduction
5 Levels of Transformations
Conclusion
Q&A
Introduction
• Team members
商研一
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張菽珊
謝文淵
簡見安
林俊吉
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).
High
Five levels of IT-enabled business
transformation
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
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
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
Level 1
Localized Exploitation
• Management Challenges
– Identification of high-value areas
– Benchmark against best practice
– Redesign performance assessment
Level 2
Internal Integration
• Leveraging of IT capability to create
a seamless process ----both technical
interconnectivity & business process
interdependence
• Example
-Lexus and Infiniti
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
Level 2
Internal Integration
• Management Challenge
-business process interdependence and technical
interconnectivity
-Performance reassessed criteria
-Benchmark results against best-in-class
Enablers and Inhibitors
Enablers and Inhibitors of Evolutionary Level of Transformation
*Technological Enablers
*Technological Inhibitors
1. Favorable cost-performance trends
1. Obsolescence of technologies
2. Enhanced connectivity capabilities
2. Lack of established standards
*Organizational Enablers
*Organizational Inhibitors
1. Managerial awareness
1. Managerial resistance
2. Leadership
2. Financial constraints
Level 3
Business Process Redesign
• Redesign key process for competing
in the future
• Use IT capability for future
organization capability
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
Level 3
Business Process Redesign
• Management Challenge
– Articulate business rationale for redesign
– Recognize organization issues and challenges
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
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
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
Level 5
Business Scope Redefinition
• Redefining corporate scope enabled
and facilitated by IT functionality
• Example: McGraw-Hill
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
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
High
Conclusion—
Alternative Approaches to BPR
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
Any Question ?
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