Download - IT Strategy for Business © Oxford University Press 2008 All rights reserved Chapter 3 E-Strategy
IT Strategy for Business© Oxford University Press 2008 All rights reserved
Chapter 3
E-Strategy
IT Strategy for Business© Oxford University Press 2008 All rights reserved
Chapter Objectives
Understand need of E-strategy Understand roles of e-strategy Study e-strategy and its mapping
with business strategy Study design and implementation
of e-strategy Study various steps in
development of e-strategy
IT Strategy for Business© Oxford University Press 2008 All rights reserved
Introduction
E-strategy is the strategic use of electronic capabilities to achieve business objectives .
E-strategy refers to the delivery of a powerful combination of strategy, issue advocacy, and cutting-edge web-technology services (including all services that can come under umbrella of ’E’) to empower, activate, educate, and mobilize/support business strategy, marketing strategy, IT and infrastructure strategy, and resources of a business to achieve business objectives.
IT Strategy for Business© Oxford University Press 2008 All rights reserved
Nine dimensions of E-strategy
IT Strategy for Business© Oxford University Press 2008 All rights reserved
Readiness for implementation of E-strategy
Business Objective
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E Strategy Readiness
Dimension for Readiness for E-Strategy Implementation
IT Strategy for Business© Oxford University Press 2008 All rights reserved
Matrix for prioritization for implementation of e-strategy- Business impact: The impact of the initiative on business. This impact is generally determined on the basis of experience and inference. - Business urgency: There are some initiatives that are urgent for businesses. For online trading to control the traffic and management of connectivity may be more important than GUI (graphic user interface) enhancements.- Technical complexity: The technical complexity along with business impact is used to decide the priority.- Effort involved: To make use of resources optimally it is important to know the efforts involved to prioritize the initiative. - Change involved: The change involved with reference to an initiative and its organizational impact is used for prioritization. Further the roles of different parts of the organization should be considered for prioritization.
IT Strategy for Business© Oxford University Press 2008 All rights reserved
E-business Strengths from strategic perspective
•- Within the traditional sector the investments are low.
•- Reputation of traditional brands. •- E-commerce shops are expandable. •- E-commerce prices respond according to
demand (direct marketing). •- E-commerce lowers the cost of stocks and personnel. •- E-commerce is available 24 hours a day. •- E-commerce personnel are highly educated. •- The target group is reached.
IT Strategy for Business© Oxford University Press 2008 All rights reserved
Traditional and E-commerce infrastructure
Middle-men
Bu
ye
r/ Pro
po
sed
clien
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E-Information, data Transfere
Database, Electronic access for data base
Industry- E-outletE-window for customer
to access data
CustomerWarehouse- Industry
Wa
reh
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Manufacturer Intermediaries Customer
Traditional Intractions
Web based Interactions
Actual deliveryInformation
FlowE-transactions- Financial and Information
Internet
Information, Pattern, Multiple
Information repositories
IT Strategy for Business© Oxford University Press 2008 All rights reserved
E-commerce and E-business An e-business system enables marketing,
buying, selling, delivering, servicing, and payment of products, services, and information primarily across non-priority networks, in order to link enterprise with its current and target customers, agents, suppliers, and business partners (i.e., extended organizations). Corporate Strategy
E-commerce is an important part of e-business.
IT Strategy for Business© Oxford University Press 2008 All rights reserved
E-business ModelMapping between E-business model
and IT Infrastructure
Service Provider
Whole Organization
Infrastructure and interface
Intermediary
Access control/Security
Information Management
Data Management and transfer
E-Value creation
Virtual Community
IT Awareness-Training
IT Research and Development
Architecture and Standards
Various Levels
Infrastructure Services
IT Strategy for Business© Oxford University Press 2008 All rights reserved
E-Strategy as target
• Here strategy merges with mission and vision in defining the future course of the firm. Here e-strategy identifies how it could enable the overall process to get to the desired target.
• E-Strategy as a support for decision-making• E-strategy acts as a technical enabler to get the
pattern that gives coherence to the decisions.• E-Strategy as a vehicle for coordination &
communication• Enabling consistency of decision making across
different departments and individuals.
IT Strategy for Business© Oxford University Press 2008 All rights reserved
E-strategy impact
• It changes industry structure and, in doing so, it alters the rules of competition.• It creates competitive advantage by giving companies new ways to out perform their rivals.•It spawns new businesses, often from within a company’s existing operations
IT Strategy for Business© Oxford University Press 2008 All rights reserved
Porter’s five force model extended for E-strategy
(1) Force One: Bargain power of buyer‘E’-Impact:- Increased due to choices- Increased because of increase in customer knowledge and
transparency- Increased because of availability of different channels- Increased because of availability of different sources
‘E’-Strategy to make business work:- Quality beyond technology- Service with apt technology- ‘E’ for extra
IT Strategy for Business© Oxford University Press 2008 All rights reserved
Force two
Force Two: Bargain power of supplier‘E’-Impact- Reduced due to choices- Commoditization of e-procurement and e-marketplaces- More price driven ‘E’ Strategy to make Business work- Limit commoditization by new measurement- Let business drive commerce- Value for money
IT Strategy for Business© Oxford University Press 2008 All rights reserved
Force Three
Force Three: Threats of substitute products and services‘E’ Impact- New product being introduced because of availability of knowledge and market place from different resources- Monitoring such entry became easier- Faster production of services ‘E’ Strategy to make business work- Proper tracking with technology- Strategy to build barriers- Innovation with ‘E’
IT Strategy for Business© Oxford University Press 2008 All rights reserved
Force Four
Force Four: Barrier to entry‘E’ Impact- Reduced for service organizations and retailers who need mobile sales force- Monitoring entrant became easier- Easy for followers due to internet ‘E’ Strategy to make business work- Build barrier with innovation and new techniques- Optimal use- Barrier with service
IT Strategy for Business© Oxford University Press 2008 All rights reserved
Force Five
Force Five: Rivalry among existing competitors‘E’ Impact- More intense because of shorter product life cycles- Commoditization ‘E’ Strategy to make business work- Capturing complete value chain- E-strategy to target niche market- Knowledge enabled business
IT Strategy for Business© Oxford University Press 2008 All rights reserved
E-strategy and E-economy – Ecommerce features
1. Ubiquity2. Global Reach3. Universal standards4. Richness of information5. Interactivity6. Information density7. Personalization
IT Strategy for Business© Oxford University Press 2008 All rights reserved
E-strategy bonds
• Leadership• Learning• Infrastructure
IT Strategy for Business© Oxford University Press 2008 All rights reserved
E-strategy to drive leadership
Market leadership Service leadership
Knowledge Leadership
Brand Leadership
Technology leadership
Integrated E-strategy
E-Strategy to drive leadership
IT Strategy for Business© Oxford University Press 2008 All rights reserved
E-strategy
Analysis of framework, conditions
Development of E-strategy
Evaluation of E-
infrastructure, readiness
Strategic options, decision making
- Analysis of internal and external factors- Existing activities
- Analysis of E-readiness- Analysis of dependancies
- Selection of Strategy- Learning options- Deciding roadmap
- Possible options- Scenarios and activities
Process analysis and E-strategy design
Process Study and analysis
ModelingProcess Design
- Analysis of various processes- Connectivity
- Planning of sub-projects- Modeling and impact analysis
- Planning- Design- Steps
E-Strategy Model
IT Strategy for Business© Oxford University Press 2008 All rights reserved
E-strategy barriers
•-- Traditional workers have less education and are not aware of the new technologies. •- The e-commerce target group is difficult to reach. Other channels are required along with the internet if the reach is to be comprehensive. •- Most of the e-commerce companies sell using only email (next to the other sales channels). Back-office is usually not integrated in the e-commerce application. •- The e-commerce logistical costs can be high.
IT Strategy for Business© Oxford University Press 2008 All rights reserved
Benefits of Implementing E-strategy
• (1) Time saving: One of the major driving forces behind implementation of e-commerce is that it saves time. The savings in time takes place on different fronts.
• (2) Improved communication with customers and suppliers: The communication and interactions with suppliers become easier. The financial transactions become efficient and that allows them to concentrate on other fronts. Electronic communication makes overall communication efficient
IT Strategy for Business© Oxford University Press 2008 All rights reserved
Summary E-strategy is about knowledge and technology and their
perfect balance with business objectives . The new innovative technologies, changes in the
marketplace, and economical transformation have embraced the need for more dynamic and knowledge driven strategies.
E-strategies are for e-business and for all the companies that are directly or indirectly using this ‘e’ component. There are different requirements in this environment and thus e-strategies have become important.
IT Strategy for Business© Oxford University Press 2008 All rights reserved
End of Chapter Three