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GLOBAL MANAGEMENT OF E-BUSINESS & E-COMMERCE. Chang-Yang Lin, Ph.D. Professor and Coordinator Computer Information Systems Program Eastern Kentucky University. Global Management of E-Commerce and E-Business. E-Commerce and E-Business Practices of IT Management


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Chang-Yang Lin, Ph.D.

Professor and Coordinator

Computer Information Systems Program

Eastern Kentucky University

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Global Management ofE-Commerce and E-Business

  • E-Commerce and E-Business

  • Practices of IT Management

  • E-Business Planning and Information Resource Planning

  • Global E-Business Issues

  • The Challenge: Some Concluding Remarks

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E-Commerce: the buying & selling, marketing & servicing, and delivery & payment of products, services, and information over the Internet, intranets, and extranets between an enterprise and its prospects, customers, suppliers, and other business partners

E-Business: the use of Internet technologies to internetwork and empower business processes, e-commerce, and communication and collaboration within a company and with its customers, suppliers, and other business stakeholders

E-Commerce & E-Business

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Source: Nat’l Academic Press,

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A 12% sales decline

An inability to ship complete orders to some retail customers

An increase in typical delivery times from 5 days to 12

A 29% increase in year-to-year inventory costs

Strained customer relations and major market-share losses

The Results of Hershey’s ERP Failure

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Enterprise Resource Planning (ERP)

  • ERP: Integrated cross-functional software that reengineers manufacturing, distribution, finance, human resources and other basic business processes of a company to improve its efficiency, agility, and profitability

  • Vendors

    • SAP R/3

    • PeopleSoft

Reasons for implementing an ERP system

  • To integrate applications and data to support decision-making needs

  • To force business process reengineering

  • To give the firm the competitive advantage to survive

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Organization structure


Cisco maintains a strong web of strategic partnerships & systems integration with suppliers, contractors, and assemblers


Everyone is a leader

40+ acquisitions become autonomous business units



the suppliers’ production processes are pulled by Cisco’s demand

a save of $500 million from supply chain management, online technical support, software distribution

The E-Organization:

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The E-Organization:

  • Alliance

    • create new value and outsource uncompetitive services

    • Ally with competitors, customers, and suppliers

    • 50% of customer orders that come in over its website are routed electronically to a supplier who ships directly to the customer

  • Governance

    • Internal and external

    • Cisco’s rapid acquisitions process

    • Cisco’s ability to integrate its acquisitions quickly into the family

  • People and culture

    • Delegated authority; collaboration expected and rewarded

    • Turnover (Cisco: 6.7%; industry: 18%)

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Managing IT Organization:

  • Hire IS professionals who can flexibly integrate new IT and business competencies

  • Evolving workgroups organized around emerging IT-intensive business initiatives

  • IT funding typically based on value proposition around business opportunity related to building services for customers. IT project inseparable part of business initiative

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E-Business Planning

Business Value


Application Development

and Deployment




Business Strategies

and Models

IT Strategies

and Architecture

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Information Resources Planning Process

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Information Resource Planning

  • Assessment of Current Information Resources

  • Information Vision & Information Technology Architecture

  • Strategic & Operational IS Plans Must Move Toward Desired Architecture

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Information Resources Assessment

  • Critical Evaluation of Inventory of Hardware, Software, People

  • Looks at Quality of Resources

  • Helps Meet Business Needs of Organization

  • Example

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Information Vision & Architecture

  • Information Vision: Written expression of desired future for information use & management

  • Technology Architecture: Description of how information resources should be deployed to achieve the information vision

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Assessing the Organization

Ask these questions:

Do key executives understand the impact of IT on the company’s competitive position?

Do they understand what is possible with current and forthcoming technologies?

Do they know how the capabilities and economics of IT will change the way the business is operated and managed?

Does the company have the right balance between innovation and managing scarce technology resources?

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Assessing Current Information Resources

  • Measure Use and Attitudes

  • Review IS Organizational Mission

    • Information Vision: A mission can best be defined by delineating the reasons for having an IS function. Each reason is classified under one of the following categories:

    • Efficiency: Uses minimum resources to do its job

    • Effectiveness: Helps users spend time doing right things

    • Competitiveness: Helps ensure organization’s competitive position

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Examples of Information Resources Assessment

  • A single IS does not exist in our organization

  • Substantial potential exists for cleaning up the automation of existing work processes

  • Significant gaps exist in automation of the value-added process in our company

  • There is a perception that the IS organization is not a company-wide support organization

  • Except for the last year and a half, IS appears to have been a stepchild of senior management

  • There is a significant perception among the user population that IS is not particularly responsive to their needs

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Examples of Information Resources Assessment (continued)

  • IS personnel seem dedicated to IS and the company

  • The level of user training and support is substantially below needs and expectations

  • While the workload in IS is heavy at times, current staffing levels should be sufficient to meet current expectations

  • The Internet is not used extensively

    Additional issues:

  • Hardware; Network infrastructure

  • Databases; Software applications

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  • Speculate: How will competitive environment change?

  • Current System: Can it do future job?

  • Identify Changes: How must IS change to allow company to take advantage of future environment?

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IS Mission Statement – An Example

Information Services is responsible for a wide variety of computing systems and services for the people of corporation. In this role, the department:

Provides a secure location for housing and accessing the official electronic data records of the company

Maintains shared computer processing capacity and support for file maintenance and information reporting

Manages a corporate data network that delivers services to departmental servers and individual workstations linked to its data center

Provides integrated IS development for departments in order to advance organizational strategies

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IS Mission Statement – Another Example

In order to meet the challenges outlined within the company Vision Statement and support the strategic objectives and values of our company, the mission of Information Services is to provide reliable information, data, and computing services to all clients, both within and, where appropriate, outside of the company.

To accomplish this role, it will be necessary to exercise leadership in identifying new management tools based on evolving IT that enables management to increase their effectiveness in operating and managing the business. The department’s ultimate objective is the development of an integrated information infrastructure and associated services required to facilitate the decision-making process.

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  • Technology Component

    • Hardware

    • Software

    • Network

    • Data

  • Human Component

    • Personnel

    • Values/Culture

    • Management System

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  • Set of Long Range Goals Which Document Movement Toward Information Vision & Architecture

  • Associated Major Initiatives to Achieve Goals

  • Development Steps:

    • Set Objectives

    • Conduct Internal & External Analysis

    • Establish Strategic Initiatives

    • Critical Success Factors

    • Analyze Competitive Forces

    • Value Chain Analysis

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  • Precise set of short term projects to be executed by IS department & user-managers in support of strategic IS plan

  • LONG TERM: Two-to-three years, project definition, selection, prioritization. Based on anticipated changes in business

  • SHORT TERM: One year, linked to annual budget. Focuses on completing current projects, beginning new ones. Immediate hardware, software, staffing needs

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Benefits ofInformation Resources Planning

  • Better IS Resource Allocation

  • Communicates with Top Management

  • Helps Vendors

  • Creates Context for Decisions

  • Achieves Integration & Decentralization

  • Evaluates Options

  • Meets Management Expectations

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Outline of an Operational IS Plan

  • Mission

  • Environment of IS: information needs of the various user groups and of the corporation as a whole

  • Objectives of IS Department

  • Constraints on IS Department: the limitations imposed by technology in general and the constraints imposed by the resources within the company (financial, technological, personnel)

  • Long-Term Systems Needs

  • Short-Range Plan: a detailed inventory of present projects and systems, and a detailed plan of projects to be developed or advanced during the current year

  • Contingencies: events that may affect the plan

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E-Business Planning Process

Strategy development

  • Developing strategies that support a company’s vision, and use IT to create innovative E-Business systems that focus on business value

    Resource management

  • Developing strategic plans for managing or outsourcing a company’s IT resources

    Technology architecture

  • Making strategic IT choices that reflect an IT architecture designed to support a company’s E-Business initiatives

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IT Architecture:

a conceptual blueprint including the following components

Technology platform

  • The Internet, intranets, extranets, computer systems, system software, enterprise application software

    Data resources

  • operational databases, information databases, data warehouses, hypermedia databases

    Applications architecture

  • including support for developing and maintaining supply chain applications, ERP, and customer relationship management applications

    IT organization

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Managing the IS Function

Organizing IT

  • More centralized control over the management of the IS resources while serving the strategic needs of its business units

  • Separate .com business units

  • Outsourcing

  • ASP

    Technology management

Managing Application development

Managing IS operations

  • Performance monitors supply information needed by chargeback systems that allocate costs to users based on the information services rendered

    Managing user services

    Human resource management of IT

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Premiere Technologies, Inc.: ing yl yi Using ASPs

  • Goal

    • Rescue a failing PeopleSoft ERP project without compromising core business efforts

  • ASP:TransChannel LLC, Atlanta

  • Solution

    • Premiere turned the whole project over to the ASP to manage

  • Result:

    • Saving about $3 million over five years by giving the work to TransChannel

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Mission Statement

  • Mission: We will become the world's most valued company to patients, customers, colleagues, investors, business partners, and the communities where we work and live.

  • Values: To achieve our mission, we affirm our values of Integrity, Leadership, Innovation, Performance, Teamwork, Customer Focus, Respect for People, and Community.

  • Integrity: We demand of ourselves and others the highest ethical standards, and our products and processes will be of the highest quality.

  • Customer Focus: We are deeply committed to meeting the needs of our customers, and we constantly focus on customer satisfaction

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Mission Statement

  • Respect: We recognize that people are the cornerstone of Pfizer's success, we value our diversity as a source of strength, and we are proud of Pfizer's history of treating people with respect and dignity.

  • Performance: We strive for continuous improvement in our performance, measuring results carefully, and ensuring that integrity and respect for people are never compromised.

  • Teamwork: We know that to be a successful company we must work together, frequently transcending organizational and geographical boundaries to meet the changing needs of our customers.

  • Innovation is the key to improving health and sustaining Pfizer's growth and profitability.

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Mission Statement

  • Leadership: We believe that leaders empower those around them by sharing knowledge and rewarding outstanding individual effort. Leaders are those who step forward to achieve difficult goals, envisioning what needs to happen and motivating others.

  • Community: We play an active role in making every country and community in which we operate a better place to live and work, knowing that the ongoing vitality of our host nations and local communities has a direct impact on the long-term health of our business.

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Our Values

  • Respect for people that includes our concern for the interests of all people worldwide who touch — or are touched by — our company: customers, employees, shareholders, partners and communities

  • Integrity that embraces the very highest standards of honesty, ethical behavior and exemplary moral character

  • Excellence that is reflected in our continuous search for new ways to improve the performance of our business to become the best at what we do

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Mission Statement

  • Mission

    • to provide society with superior products and services -- innovations and solutions that improve the quality of life and satisfy customer needs -- to provide employees with meaningful work and advancement opportunities and investors with a superior rate of return.

  • Our Values

    • Our business is preserving and improving human life. All of our actions must be measured by our success in achieving this goal. We value above all our ability to serve everyone who can benefit from the appropriate use of our products and services, thereby providing lasting consumer satisfaction. .

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Our Values (continued)

  • We are committed to the highest standards of ethics and integrity. We are responsible to our customers, to Merck employees and their families, to the environments we inhabit, and to the societies we serve worldwide. In discharging our responsibilities, we do not take professional or ethical shortcuts. Our interactions with all segments of society must

reflect the high standards we profess.

  • We are dedicated to the highest level of scientific excellence and commit our research to improving human and animal health and the quality of life. We devote our resources to meeting the needs of consumers

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Our Values (continued)

  • We expect profits, but only from work that satisfies customer needs and benefits humanity. Our ability to meet our responsibilities depends on maintaining a financial position that invites investment in leading-edge research and that makes possible effective delivery of research results.

  • We recognize that the ability to excel -- to meet society's and customers' needs --

depends on the integrity, knowledge, imagination, skill, diversity and teamwork of employees, and we value these qualities most highly. To this end, we strive to create an environment of mutual respect, encouragement and teamwork -- a working environment that rewards commitment and performance and is responsive to the needs of employees and their families

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Global Market Challenges

  • Political challenges

    • Rules regulating transfer of data

    • Restrict/tax/prohibit imports

    • Local content laws that specify the portion of the value of a product that must be added in that country

  • Geoeconomic challenges

    • Too long to fly

    • Difficult to communicate in real time

  • Cultural challenges

    • languages, cultural interests, religions, customs, social attitudes, and political philosophies: managers must be trained and sensitized to such cultural differences

    • Differences in work styles and business relationships: teams vs individuals; one leadership vs shared leadership

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Global E-Business StrategiesThe Transnational Approach

  • A business must depend on its information systems and Internet technologies to help it integrate its global business activities

  • A business must develop an integrated and cooperative worldwide hardware, software, and Internet-based architecture for its IT platform.

  • Examples

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Transnational Strategies byAmerican Express

  • Tactic: Global customer service

  • IT Environment

    • Global network linked from local branches and local merchants to the customer database and medical or legal referrals database

  • Results

    • Worldwide access to funds

    • “Global Assist” hotline

    • Emergency credit card replacement

    • 24-hour customer service

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Transnational Strategies by


  • Tactic: Global sourcing and logistics

  • IT Environment

    • Global network, EPOS terminals in 4000 stores, CAD/CAM in central manufacturing, robots and laser scanner in their automated warehouse

  • Results

    • Produce 2000 sweaters per hour using CAD/CAM

    • Quick response (in stores in 10 days)

    • Reduced inventories (JIT)

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Business Drivers for Global E-Business

Global customers

  • People who may travel anywhere or companies with global operations

  • Global IT can help provide fast, convenient service

    Global products

  • Products are the same or are assembled by subsidiaries throughout the world

  • Global IT can help manage worldwide marketing and quality control

    Global operations

  • Parts of a production or assembly process are assigned to subsidiaries based on changing or economic conditions

  • Global IT can support such geographic flexibility

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Business Drivers for Global E-Business

Global resources

  • The use and cost of facilities and people are shared by subsidiaries of a global company

  • Global IT can keep track of such shared resources

Global collaboration

  • The knowledge and expertise of colleagues can be quickly accessed, shared, and organized to support individual or group efforts

  • Global IT can support such enterprise collaboration

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Global ERP Issues


  • ERP applications using SAP and PeopleSoft because they automatically create reports in different languages

  • Development work is done in Boston, deployment and screen labeling is handled locally to overcome language barriers


  • Runs an ERP system from eBPCS

  • Provides China plants with networked ERP systems

  • Put control over ERP data extraction and manipulation in local hands

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Key Questions for Global Websites

What content will you translate, and what content will you create from scratch to address regional competitors or products that differ from those in your country?

Should your multilingual effort be an adjunct to your main site, or will you make it a separate site, perhaps with a country-specific domain name?

What kinds of traditional and new media advertising will you have to do in each country to draw traffic to your site?

What are the legal ramifications of having your website targeted at a particular country, such as laws on competitive behavior, treatment of children, or privacy?

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Business Managers inInformation Resource Planning Process

  • Assessing the current environment and proposing ideas for the future computing environment

  • Being creative in thinking about IT applications and be knowledgeable about her department’s information needs

  • Involving during resource and funding justification process

  • Involving in the process of systems implementation and training

  • Creating an atmosphere that is conducive to acceptance of the new applications

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Success Factors to Implement ERP

  • Real commitment from top management

  • Conveying this commitment throughout the company

  • Sufficient resources devoted to the project including employment of a consulting firm to help implement the ERP system

  • Sufficient managerial and IS professional time devoted to the project

  • Processes must be changed to conform those prescribed by the ERP package

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