Building An E-Business Strategy Asgar Alam ICS 392-501 Dr. G.M. Welsch Winter Quarter 2001
1.Building An E-Business Strategy 2.What is an E-business 3.Becoming an E-business 4.Levels of E-business 5.Experimentation 6.Integration 7.Benefits from Integration 8.Transformation 9.As a result 10.What does being a level 3 company symbolize 11.Strategic breakout methodology 12-13.Initiate 14-15.Diagnose 16-17.Breakout 18.Transition 19-20.Under Transition 21-22.Conclusion 23.Bibliography Table Contents
What is an E-business? • An E-business is an enterprise with the capability to exchange value (goods, services, money, and knowledge) digitally. • A new way of doing business that involves connectivity, transparency, sharing and integration.
Becoming an E-business • It is a process that starts with experimenting initially with internet technologies, and transforming the company into an enterprise prepared to compete successfully in the 21st century.
Levels of E-business • Experimentation. • Integration. • Transformation.
Experimentation • Individual departments take a proactive approach in developing Internet applications. At this time they are not tied to corporate strategy. • Senior managers have no idea of their payoff. Their development is still not considered in light of the overall corporate strategy.
Integration • At this level company’s have incorporated E-business to support their current business strategies by integration across functional departments.
Benefits from Integration • Cost reduction. • Increase in revenue. • Ex. Cisco, Walmart, and Seagrams.
Transformation • Companies empower themselves by using E-business strategy to drive corporate strategy.
As a result • The value chain becomes interconnected in such a way that new revenue streams are identified, customer satisfaction increased, and customer service dramatically improved.
What does being a level three co. symbolize? • A business that uses “E-breakout Strategies” to build stronger customer ties, exploit intellectual capital and leverage cooperation relationships with competitors.
Strategic breakout methodology • Businesses require methods that exploit strengths, minimize weaknesses, capitalizes on opportunities, and minimizes threats. • Stages. • Initiate • Diagnose • Breakout • Transition
Initiate • This stage entails developing an E-business vision by establishing goals and reconfirming senior management commitment. • Gathering information about exact needs and wants of customers, suppliers, and business partners.
Continued • Require experts who can identify people, roles, and business units crucial to the success of the project. • Important to select a facilitator who can communicate and present arguments at the strategic level, and act as a business analyst, able to analyze, research, and develop strategic content.
Diagnose • This stage conducts both an industry and a company assessment of customers, suppliers, business partners, and available E-business technologies. • The major study of this stage requires the team to assess the industry the firm is in as well as collateral industries impacting the firm.
Continued • Determining who the market leaders are, and the industry’s major suppliers and customers. • This will identify firms that embody best strategy, business processes and technologies usage in the industry. • Swot analysis will be prepared.
Break Out • Purpose of this stage is to develop a strategy that breaks way from stereotypical thinking and changes the course of the company. • A strategic target should be formulated based on a swot analysis.
Continued • This strategy should consider technologies that are currently used and also those that have the ability to transform the industry in the future.
Transition • This transition strategy is based on the difference between a company’s current capabilities and those resources needed to enact the breakout strategy.
Under Transition • Change readiness assessment: This evaluates the company’s ability to implement a new E-business strategy based on flexibility. • People, information, company culture, business processes, and company organization are accessed on a broad level to assess the range of options available to the company.
Continued • Cost, benefit, and risk analysis: This should be performed on available E-business technologies and the resources needed to implement the breakout strategy
Conclusion • Example of a firm that implemented an E-business strategy. • General Electric’s appliance division has become one of the leaders in GE’s transformation to GE.com. • This unit is on track to take in $2.5 billion--45% of its sales– on the Net.
Conclusion • Transaction costs are now a tenth of what they were when orders were phoned or faxed in. • Orders are up 20% since last year same time. • Business Week.
Bibliography • Higgin,R, “E-Business: Report from the Trenches,” Sept.1999, pp.46-48. • Kettinger, William J. and Hackbarth, Gary, “Reaching the Next level of E-commerce,” Financial Times, London, March 15, 1999. • Sawhney, M. “The longest Mile,” Business 2.0, December 1999.pp 235-244. • Cross, K, “The Ultimate Enablers; Business Partners,” Business 2.0 February 2000.pp139-140