chp04 - more than technology

8/7/2019 CHP04 - More than Technology

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Chapter Four Chapter Four Thinking E-BusinessDesign: More ThanTechnology


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e-Business Strategies, Inc. www.ebstrategy.com- 2 -

IntroductionIntroduction

3 interlocking layers of e-businesse-Business Design

What business design can make your customers shoppingand service experiences unique and memorable?

What capabilities and competencies create rich customer experiences? In the quest for efficiency, how do you structure your

organization for efficiency?

e-Business App Infrastructure Supports design by providing s/w functionality Strong app infrastructure foundation necessary from which to

deploy e-business apps


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IntroductionIntroduction

e-Business Infrastructure structural foundation supporting the app layer is a balance of structure and flexibility harnesses, safeguards, manages, and permits use of

information in ways that are fast, safe and simple

comprises the tech, utilities, and services needed for uninterrupted flow of e-commerce


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3 interlocking layers of e3 interlocking layers of e- -businessbusiness

EE--BusinessBusinessInfoStructureInfoStructure

ScalabilityScalabilityReliabilityReliabilityHostingHostingStorageStorage

ServersServersDatabasesDatabasesMiddlewareMiddlewareRoutersRouters

Site SecuritySite SecurityData SecurityData SecurityTransaction SecurityTransaction Security

EE--BusinessBusinessDesignDesign

Business Model ScopeBusiness Model Scope

Customer SelectionCustomer SelectionValue CreationValue CreationStrategic ControlStrategic ControlOrganizational SystemsOrganizational Systems

EE--BusinessBusinessInfrastructureInfrastructure

CRMCRM ee--ProcurementProcurementERPERP Supply ChainSupply ChainFinancialsFinancials Selling ChainSelling ChainBusiness IntelligenceBusiness Intelligence PortalsPortals


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The Race to Create Novel eThe Race to Create Novel e- -BusinessBusinessDesignsDesigns

Getting it right the first time very important right strategy accelerates market penetration and

minimizes cost wrong strategy can cause years of repercussion

Truly great companies use state-of-the-art e-commerce processes to transform themselves

redefine value for customers build powerful e-business designs to outperform

competition understand customer priorities


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The Race to Create Novel eThe Race to Create Novel e- -BusinessBusinessDesignsDesigns

Focus no longer limited to processimprovement; focus of change initiatives shiftedto business redesign

Retail drug industry

Success depends on how quickly a companycan formulate novel business designs andadapt them to its markets


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Step 1: Self DiagnosisStep 1: Self Diagnosis

Assess impact of recent customer, business andtechnological trends Has the recent wave of tech innovation created new ways of

doing business and reorganizing priorities within your firm? Is your company responding to changing customer

expectations? Is your company willing to question and change countless

industry assumptions to take advantage of new opportunitieswhile also preserving investments in people, apps and data?

Is your company successful at lowering operating costs while

making complex business apps adaptive and flexible tochange under the relentless pressure of time to market?


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Step 1: Self DiagnosisStep 1: Self Diagnosis

Innovator or market leader: All answers yesEarly adopter or visionary: Most answers yes

Charles Schwab

Silent majority: Few answers yes Pragmatists, Old-guard Conservatives, and Die-

hard Skeptics


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Step 2: Reverse the Value ChainStep 2: Reverse the Value Chain

Greatest challenge in e-business: linkingemerging tech to new business design

Managers find creating new business designsdifficult with emerging technologies andcustomer needs

trained to concentrate on improving products,increasing market share, and growing revenues

distinction between products and services blur ine-business world


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Successful companies invent value, not justadd value outside in vs. inside out customer requirement important in outside in

approach Starbucks invented value where traditional

companies did not by creating business aroundgourmet coffee

Outside-in, customer centric approach essentialin times of great structural transition ineconomy


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In-houseCore

Competencies

RigidInfrastructure/

Processes

Products/Services Channels Customers

Traditional Business Design

Outsourced/In-house CoreCompetencies

FlexibleInfrastructure/

ProcessesProducts/ServicesIntegratedChannelsCustomersNeeds

e-Business Design


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Service ExcellenceService Excellence


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Service ExcellenceService Excellence

Involves selecting a few high-value customer niches and then making a concerted effort toserve them well

Requires commitment to CRM

Operating principles of service excellence prepare for the unforeseen gather and maintain all up-to-date, accurate

business and economic information you need,where and when you need it

user customer contact mgmt develop corporate philosophy about customer

service


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Operational ExcellenceOperational Excellence


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Operational ExcellenceOperational Excellence

Involves providing lowest-cost goods andservices possible while simultaneouslyminimizing problems for customer

Key principles efficient leveraging of assets mgmt of efficient transactions mgmt of sales intelligence dedication to measurement systems mgmt of customer expectations


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ContinuousContinuous- -Innovation ExcellenceInnovation Excellence


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ContinuousContinuous- -Innovation ExcellenceInnovation Excellence

Involves not only providing best-possibleproducts and services but also offeringcustomer more exciting features and benefitsthan competitor

Microsoft, Sun Microsystems and Nike Downfall of AT&T, Eastman Kodak, Sears and GM

due to lack of technological innovation

Key principles risk-oriented mgmt style growth by mergers and acquisitions market-education style encouraging innovation


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Step 4: Execute FlawlesslyStep 4: Execute Flawlessly

How can you move from where you are todayto where you want to be?

How do you integrate and tailor your legacyinfrastructure to meet new e-businessrequirements?

Execs must be willing to cut losses andabandon important current projects that do

not support the goals of the e-business design


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Service Excellence at American ExpressService Excellence at American Express

Business transformation of the mid 1990s resulted innew e-business design concentrating on mgmt of customer relationships

In era of limited personal time, customers concerned aboutquality service, esp. its simplicity, flexibility and consistency

Combine detailed customer knowledge with serviceflexibility

CustomExtras enables custom discounts and other dealsdirectly on card members bills

Investing $1 billion annually in the construction of asophisticated service infrastructure

Within financial services industry, this can provide means todevelop competitive advantage and raise barriers to entry


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Service Excellence at American ExpressService Excellence at American Express

TravelServices

CreditCards

Banking

FinancialPlanning

OnlineTravel

Services

MembershipRewards

PrivateBanking

Life PathPlanning

IntegratedFinancialServices

The Way It Was The New Way


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Operational Excellence at DellOperational Excellence at Dell

Build-to-order e-business design low-cost manufacturing and fast-cycle product

development

Integration of customer demand from the direct-sales channel with back-end supply chain

enables cost-effective selling directly to customers,bypassing resellers and their markups

Computer distributors that once controlled PCbusiness went bankrupt because of Dells directsales model

CHS Electronics, MicroAge, InaCom


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November

$3 Million/day

36 countries

200+ Premier Pgs.

400k users/wk

JanuaryJanuary$1 Million/day$1 Million/day

MarchMarchAsian/EuropeanAsian/EuropeanInternet siteInternet sitelaunchedlaunched225,000 online225,000 onlineuser sessions per user sessions per

weekweek

October October Configurator Configurator

generating onlinegenerating onlinequotes isquotes islaunchedlaunched

JulyJulyDell startsDell startsselling systemsselling systemsonlineonline80,000 online80,000 onlineuser sessionsuser sessionsper weekper week

JuneJunewww.dell.comwww.dell.comsite launchedsite launchedwith technicalwith technical

support contentsupport contentand eand e- -mailmailgatewaygateway

Dell launchesDell launchesan FTP site for an FTP site for customers tocustomers to

download filesdownload files

Late 1980sLate 1980s 19941994 19951995 19961996 19971997

FebruaryFebruaryMarketingMarketing

contentcontent

addedaddedto siteto site

19981998

Focus effortsFocus effortson Corporateon Corporate

customer customer $4 M/day$4 M/dayFocus onFocus onvaluevalue-- addedaddedservicesservices

Dell Online HistoryDell Online History


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The Dell eCommerce SystemThe Dell eCommerce System

Integrated customer experienceIntegrated customer experience

ValueValuepropositionproposition

ShoppingShoppingand buyingand buying

ServiceServiceand supportand support

Loyalty/Loyalty/relationshiprelationship

ProductProductservicesservices

PricePriceDirect modelDirect model

DellDell

ConfigurationConfigurationand shoppingand shopping

ElectronicElectronicordersorders

Order Order statusstatus

TroubleTrouble- -

shootingshooting

ValueValue- -addedaddedservicesservices

Premier Premier servicesservices

PersonalizedPersonalizedexperienceexperience


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Continuous Innovation at Cisco SystemsContinuous Innovation at Cisco SystemsAt Cisco, business design centers on the core belief in what

continuous innovation demands from organizationsattempting it build on change, not stability organize around networks, not a rigid hierarchy based on

interdependencies of partners - not self-sufficiency construct operations on tech advantage, not old-fashioned bricks n

mortar Continuous innovation via acquisitions

Acquisitions cornerstone of its business strategy, to survive larger competitors

Identify companies that help enhance product line and keep up withchanging marketplace

Make sure the acquisition is assimilated quickly

Extended Enterprise model to support the innovation-excellence model

Focus on core competencies and form partnerships with suppliersthat provide other key capabilities


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Problem Detection:CiscoWorks

Problem Notification: Bug Alerts

Problem Identification:Bug Navigator

Operation SupportSoftware Library

Problem Resolution: OpenForum, Troubleshooting Engine

Installation and Configuration

Documentation

Reseller CareReseller Care Cisco Connection OnlineCisco Connection Online


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Customer Care ResultsCustomer Care Results

TotalLogins/Month

0100,000200,000300,000

400,000500,000600,000700,000800,000900,000

1,000,0001,100,0001,200,000

Jan Apr May Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jun

19971995 1996 1998

Satisfaction3.4Satisfaction

3.4

Satisfaction4.1

Satisfaction4.17

June 1998

Over 70% questions handled on lineDramatic growthover 1.1millionlogins per month25% higher customer satisfaction98% accurate, on-time repair shipmentsAnnual savings of $365 m

Headcount $75 mSoftware download $250 mDocument publication $40 m


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Lessons from eLessons from e- -Business DesignBusiness Design

Be customer focused

Value creation a continuous process

Transform business processes into digital form

Decentralize management but centralized coordinationCreate an e-business app architecture addressing threecritical requirements

interface integration innovation

Integrate but plan for continuous growth and change start small build on success

build, launch, learn


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EE--BusinessBusinessStrategies, Inc.Strategies, Inc.

www.ebstrategy.comwww.ebstrategy.com

[email protected]@ebstrategy.com

678678--339339--1236 x2011236 x201

FaxFax -- 678678--339339--97939793

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