e business integration. enabling the real time enterprise

1 J.Blomme–[email protected] E-Business Integration. Enabling the Real-Time Enterprise

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E-Business Integration Enabling the Real-Time Enterprise

Johan Blomme

JohanBlomme‐Leenstraat11‐8340Damme


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It is not the strongest species that survive, nor the most intelligent ones, but the ones that are

most responsive to change.

Darwin

It’s not longer about the big beating the small, it’s about the fast beating the slow.

Larry Carter, CFO Cisco Systems


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Towards the Real-Time Enterprise


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Business Competition

Technology Customer Evolution

Marketplace Dynamics

. new global network information economy

. value nets as the new economic building blocks

. supply chains are shortening and integrating with customer connections

. globalization

. deregulation

. Virtualization

. competition from new/non-traditional players

. increased competition for deeper and broader customer relationships

. connectivity and interactive technologies pervade all business activity

. the evolving marketplace is a real-time, interconnected architecture

. from sellers to buyers market

. anyone, anytime, anywhere access

. willing to participate in decisions regarding value they receive


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According to GartnerG2, businesses must replace industrial age strategy with information-based, real-time processes and paradigms. Time and information will drive the information age, and competitiveness will be based on keener foresight, obtaining real-time information and acting on it promptly and effectively. The following changes indicate how to compete in the information age :

  more complex business environments due to globalization and deregulation ;   greater impact of change from external causes ;   a power shift from sellers to buyers, rapidly shifting customer demands and subsequent reduced product life cycles ;   constant technology change ;   faster business cycles and temporary competitive advantage ;   the need to explore collaborative strategies ;   constant change at ever-increasing speeds and shrinking strategy time horizons.

Stability and Dyscontinuity


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Processes: interwoven, collaborative linear, sequential

Tempo: periodic, slow

continuous, rapid

Assets : tangibles

intangibles

Industrial Age Information Age

The transition from the Industrial Age to the Information Age


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Changing drivers Traditional Economy New Economy Business Imperative

shift in power

products and manufacturing . manufacturer push model . make and sell . mass production of goods . transactions . customer as receiver

customers and relationships . customer pull model . sense and respond . mass customization . relations . customer as receiver

integrating the customer

into the value chain

basis for market influence

physical value chain . tangible : technical and engineering . vertical integration . enterprise focused . competition

virtual value chain . intangible : inter-enterprise processes and coordination . virtual integration . externally focused . collaboration

business process integration across the

extended enterprise

driver of market dominance

competence . static content . department/enterprise . batch processing

knowledge . dynamic content . business value chain . real-time processing

real-time data integration and

analysis

The Internet breaks all commerce paradigms. A new business model is emerging.

The transition from the Traditional Economy to the New Economy


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Real-Time Enterprise

PERSONALIZATION the ability to provide tailored

customer services across touchpoints

INTEGRATION the ability to gather, integrate,

analyze and exchange information across the business

value chain in real-time

COLLABORATION the ability to collaborate flexible with suppliers, business partners and

customers

E-business integration : the transformation of internal and external business processes toward customer-centricity based upon service delivery opportunities offered by

information and telecommunication technologies to better fulfill the mission of business.

The Real-Time Enterprise


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Value-Creation in the Relationship Economy


11 Virtual Integration

The new Internet business model … relies on information, so instead of things like inventory,

you have information. Instead of physical assets you have intellectual assets. And instead of

closed business systems, you have collaboration. And companies are able to connect themselves with their suppliers and their customers much

more quickly using information.

Michael Dell adress at The University of Texas, E-business : Strategies in net time, april 2000


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APPROACH TRANSACTION MODEL

RELATIONSHIP MODEL DESCRIPTION

business focus product customer In the transaction-oriented enterprise, value is delivered to the buyer along with the product of service. The role played by the customer in value creation is minimized. In the relationship economy, customers have available a wealth of information at every point in the chain. Customer expectations are extending beyond front-end ordering systems to back-end execution processes (the boundaries between SCM and CRM are blurring). Customers are interacting with different entities at various points along the value chain. No separation exists between the multiple roles, relationships, processes and touchpoints which define the enterprise ecosystem. This is the e-business promise : delivering superior customer experiences across the value chain.

value model value delivery value creation

process focus

supply-chain efficiency

(internal ; intra-company)

demand-chain effectiveness (external ; inter-

company)

The emphasis shifts from streamlining internal processes and supply chain efficiency which is transaction-oriented (ERP, BPR, JIT) to demand-chain effectiveness which is more knowledge and process-oriented.

organizational focus vertical silos core competencies Enterprises are migrating from vertically-integrated supply chain structures to collaborative trading networks with focus on core competencies.

planning model forecast-driven demand-driven

Instead of historical data, demand information extracted as close to the final point of consumption is used to understand the real-time market.

Information from multiple customer touchpoints is used to create a unified customer view.

partnerships few extensive The perspective is shifting from a single organization to partnerships.

Transactional Model vs Relationship Model


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E-business solutions allow an organization to leverage web technologies to re-engeneer business processes, enhance communications and lower organizational boundaries with their customers (across the Internet),

employees (across the corporate Intranet) and its suppliers and partners (across its Extranet).

The Networked Value Chain


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  In today’s competitive environment, products and services tend to become more and more alike. Therefore, the basis for competitive advantage becomes relationships and personalized services.

  To compete, firms must address : –  empowered customers who have equal access to information, an incredible

choice of products and services and the ability to choose from suppliers anywhere ;

–  consumers who expect a high degree of personalization ; –  speed of business change, requiring flexibility and rapid adoption of new

technologies.

  To succeed, companies must focus on the quality of the customer experience. This requires :

–  customer knowledge : who are my customers ? what do they want ? what is their value potential ?

–  interaction strategies / conversations which convert customer knowledge into value propositions (customization : building individual customer solutions across all channels) ;

–  the delivery of customer value through an integrated business value chain.

The Relationship Economy


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  It’s not enough to manage customer relationships in a vacuum without looking at the value chain as a whole.

  As connectivity and interactive technologies pervade all business activity, the competitiveness of a company is determined by its participation in networks of suppliers, partners and customers.

  Customers reveal their interests and buying preferences in real-time. The value chain becomes an interactive process. This challenges companies to integrate their physical-channel strategy with the Internet.

  The opportunities provided by the Internet lie primarily in developing value-adding business relationships with suppliers, partners and customers.

  The term “extended enterprise” is used to denote a company that collaborates with its suppliers, partners and customers to streamline business processes, transcending traditional boundaries and enhancing mutual benefits in terms of customer loyalty and retention, reduced procurement and inventory costs, fewer shortages, improved order management and fulfillment as well as faster time to market with more accurate offerings (products and services).

  Customers care about their total experience with the manufacturer and the retailer. The experience is more persistent than the product. Therefore, manufacturers need to brand the customer experience.

The Relationship Economy con’d


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Real-Time Business Intelligence


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Time

Bus

ines

s va

lue

The Evolution of E-Business

Web Presence

‘’brochureware’’ one-directional

information flow

Interactivity

email faq

E-commerce E-commerce

buy, sell

E-business

dynamic content displayed to a wide

number of customers and business partners


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Time

Bus

ines

s va

lue

discovery

verification Historical Information

The Evolution of Analysis / Business Intelligence

real - time personalization & distribution

Predictive Information

business trends are evaluated by analyzing data to report what

happened and why

predictive models are built to understand what will happen


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REAL-TIME PERSONALISATION & DISTRIBUTION

DATA MINING

OLAP & STATISTICAL ANALYSIS

QUERY & REPORTING

E-BUSINESS

E-COMMERCE

INTERACTIVITY

WEB PRESENCE

BUSINESS VALUE CHAIN

CONTENT

delivering individualized,

integrated intelligence to information

consumers throughout the business value

chain

The Convergence Between Business Intelligence and E-Business


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The BI/reporting application has become a part of enterprise infrastructure, and more focused on information creation, management and delivery than heavy-duty analysis. The typical end-user is someone whose primary interface is a Web browser. And they are as likely to work outside of the organization as a customer or partner as they are to be an employee.


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CURRENT STATE FUTURE STATE

REACTIVE historical orientation : what happened ?

PROACTIVE predictive, future orientation in addition to reactive

TIME DELAYED analysis happens after the fact using aggregated and

detailed data

REAL-TIME analysis of detailed data while event is occurring in

addition to time-delayed

INTERNALLY FOCUSED small number of power users

INTERNAL + EXTERNAL FOCUS analysis aimed at covering the extended enterprise

STAND-ALONE & DISPARATE little integration with operational systems

IN LINE, UNIFIED analysis systems closely coupled with operational systems

Major Trends in Business Intelligence


22 Major Trends in Business Intelligence con’d


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It’s becoming more and more practical to connect CRM activities and customer insight information with upstream operations in the supply chain. That is, to seamlessly link the supply chain’s ‘generate demand’ activities with its ‘fulfill demand’ activities. This means sharing transaction data among partners to help keep inventories low. But at another level, it typically entails connecting frontline employees – those in the call centre, the sales force, etc. – with the right data in the supply chain. A frontline employee taking an order from a customer must have visibility to updated inventory and production data in order to provide accurate delivery information to customers asking about their orders. At the same time, network-enabled information sharing between supply chain partners, such as a retailer and a manufacturer, can provide partners with insights into the customer that can help guide product development and manufacturing. By combining the rich information, insights and relationship-building capabilities of CRM at the front end, and the ability to create real-time electronic links between ‘generate demand’ and ‘fulfill demand’ activities, the supply chain can become increasingly responsive.

Major Trends in Business Intelligence con’d


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Source : SPSS Rapid ROI Online Seminar, february 2003



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Operational Systems

Data Warehouse

1. Segmentation / Profiling -  Descriptive analysis, e.g. decision trees -  Predictive analysis, e.g. logistic regression

2. model creation

3. evaluation

4. offer optimization

5. deployment, e.g. call-center

recommandations



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presentation

analysis & modeling

data integration

transactions

ERP CRM SCM

data warehousing operational data store

predictive data mining

WEB

Enterprise Information

Portal

real-time personalization and distribution : . embedded predictive modeling : real-time recommandations . performance measures (dashboards, scorecards) guide decision-making

modeling techniques enable value-added business analysis

a common data model

transaction-level data is gathered from multiple sources



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INTEGRATE ANALYZE ACT

enterprise application integration

  integrate enterprise and extra-enterprise siloed applications

  data warehousing, operational data store

  identify and evaluate opportunities and risks

  real-data data analysis, data mining

  implement results into operational systems

  build competitive advantage through using real-time analytics

predictive data analysis

business process automation

enabling technology

challenge

REQUIREMENTS FOR THE REAL-TIME ENTERPRISE



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A data warehouse is typically maintained by batch jobs that take periodic snapshots of operational data and clean, transform and load the data into a warehouse solution. The latency gap inherent to extracted data sources disconnects users from the operational sources.

Until real-time data is combined with historical information in the data warehouse, it lacks analytic context. Historical data is static-frozen in time. The value of integrating real-time data with historical data is that you can leverage the real-time ODS to achieve a consolidated up-to-the-second view of a customer. And only by processing the consolidated data against relevant historical data and business rules you gain the basis for meaningful and timely action. The synergy between real-time and historical data, coupled with real-time delivery of personalized knowledge is the crux of real-time analytics and the source of its business value.



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achieve single view of customer across all touchpoints and systems

use analysis of customer information to drive interactions

personalize every customer interaction in real-time

Closed-Loop Analysis