ECT 589: E-Commerce Management

04/22/23 ECT 589 Susy Chan, Ph.D. 1

ECT 589: E-Commerce Management

Week #8Strategic IT planning

for E-Business


Agenda Market News Exploiting Virtual Value Chain IT Planning for eBusiness Strategic Planning for Emerging Technologies Rosetta Net and ebXML Case Next Week: General Motor Case Week 10: IT Architecture Design/project

presentation (?) Week 11: Final Project Presentation


e-business strategic planning

Can we plan in a world of volatile change? Top-down analytical planning

Takes a broad view of the business environment, identifies the company’s options and defines the firm’s mission and director

Bottom-up tactical planning Narrower view, short term results in specific areas

Continuous planning with feedback A mix of both approaches


Top Down Analytical Planning Goals – define a strategic vision to guide capital budget Longer planning time frame (5-years plus) Assumes the future to be a continuation of the present Comprehensive, analytically based, data rich, rigorous

Environmental scanning, testing different scenarios, predictive analysis and modeling

Structured and hierarchical organization and decision model Drawbacks:

Do no work well in fast-changing business conditions or disruptive change Separation of strategy formulation (analysis) and implementation

(execution) Long decision chain, vision and strategy are not shared by the front-line

staff; Not responsive to market needs


Bottom-up Planning Addressing immediate needs, reactive Short term projects Reflects a fragmented org structure Drawbacks

Not integrated to achieve corporate-wide objectives Fractured pattern of authority Impedes comprehensive planning and the systems

integration required for e-business Fragmented applications (e.g., multiple ERPs,

incompatible requirements for infrastructures)


Continuous Planning with Feedback(Adaptive Planning)

Allow strategy to evolve; Dynamic interaction between planning and implementation

Shorter planning horizon and more organic process Develop several plausible scenarios for evaluation, not one most-likely

scenario Blurring of strategies, tactics and implementation, 80% of benefits with 20

percent of efforts Challenges:

Governance and capability (skills, data, knowledge, decision process, culture, organization structure) for technology solutions becomes a critical organization design issue

Ability to differentiate and balance strategies of long term (architecture and infrastructure) and short-term (specific applications) impacts

ROI and measurement vs, classify investment


Adaptive Planning: Support Two Worlds

Systematic Reliable, cost-efficient To two years or longer Architectural standards Data facing Mission Critical

Opportunistic Urgent user demands 12 weeks Process guidelines User facing Competitive Edge

Plan for transition in stages from opportunistic world to systematic world, Project candidates


E-Business Drivers Organizational

Consolidation, efficiency Business

New business initiatives, mergers Customer

Changing customer needs & priorities Technology

New technology, use of legacy apps


Areas of Assessment Core Competencies (Internal)

Customer Interactions Production and fulfillment People Technology Infrastructures

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IT Adoption Profile Type A: Leading edge adopters of technology (15% 30%)

Use technology as competitive weapons, rapid adopter Spend 2x on IT than Type C Application portfolios include high risk projects Focused on sustainable competitive advantage and customer

loyalty. Type B: Mainstream adopters (65% 60%)

Wait for new technology to be broadly adopted before adoption

IT spending is in line with competitive companies. IT investment decisions are driven by the industry trend.

Type C: Conservative adopters. (20%10%) Risk averse Efficiency focused New IT investments are rigorously challenged.

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BusinessStrategy

MissionGoalsValues Vision

ITArchitecture

IT strategicPlan

(resourceAllocation)

EnterpriseTechnology

Strategy

RankStrategic Projects

IT Strategy:Alternatives

Initiative Selection

ResourcesAvailable

Status competitionTechnology

Risk Review

FinancialReview

Scoring &Evaluation

Criteria for Selection

BusinessImpact Review

Selection &Performance

Measures

PortfolioManagement

IT Strategic Planning Process Framework

Source: Gartner

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Utility Enhancement FrontierCost (Expense Focus)

Productivity(Payback) Focus

Opportunity (Advantage) Focus

High

Low

Relative Share PortfolioDominant Occasional Seldom

ContributionTo corporate Performance

PayrollGeneral Ledger

Billing

Order Entry

Customer Service

Supply Chain ManagementCustomer Tracking

E-Commerce

Utility Function

Functional Enhancement

User Empowerment

Process RedesignBusiness Creation

Value Portfolio Analysis: Application Categories

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Emerging Technology Planning Early adoption of emerging technologies for competitive advantages Manage emerging technologies Identify strategic opportunities that combine technology “push” with

business “pull”. Prioritize options for major impacts Coordinate all related activities to build on successes and avoid

redundancies. Educate staff to become skilled in the risk management with

introducing new technologies. Carried out by Advanced technology group (ATGs)

A group with the mission of performing strategic IT planning in support of a company’s business goals. Global Healthcare Exchange (continue)

Technology aggressiveness 30% Type A 60% Type B !0% Type C

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Who does strategic IT planning?

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Emerging Technology Planning Process

Define scope and align with the business. Scan and track technology opportunities. Rank and select the subset of technologies

and initiatives. Evaluate technology initiatives and

determine course of actions. Influence the organization for adoption

through marketing, education, and networking.

Transfer knowledge and responsibility for implementation.

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Focus and Scope: Aligning with the Business Alignment is a two-way flow: technologies vs.

business Three approaches

Top down: strategic planning Bottom up: business unit request Out of the box: visioning and scenarios

Different roles for ATG members

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Hype Cycle for Emerging Technologies ‘04

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Creating an e-Business IT Vision Move from technology discovery to business

value definition. Focus on the fundamentals:

The basic economic model of the firm The strategic intent of the firm The strategic endeavors of the firm and its

individual units Ask questions to clarify these issues Create a business needs matrix

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Business Needs MatrixRFID Web

ServicesWireless

Description

Impact on Customers

Impact on Capital

Impact on Resources

Impact on Cycle Time

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Business Needs Matrix -- RFID Description

Automated data collection technology that enables equipment to read and write to identification tags without contact or line of sight

Impact on Customers Enhances customer interactions and customer service by

enabling inventory assessment without manual intervention; increases revenue by increasing stock availability

Impact on Capital Reduces capital requirements as asset tracking and logistics

improvements increase utilization and reduce the amount of inventory required to service customers

Impact on Resources Reduces efforts to manage inventory and assets and reduces

required inventory levels to serve customers Impact on Cycle Time

Reduces time and effort to track and trace inventory and other assets; improves replenishment, maintenance, and support cycle times

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Business Needs Matrix – Web Services Description

Application interfaces accessible via Internet standards used for lightweight integration across devices, systems, and locations

Impact on Customers Increases the availability of data and application services to

customers in a flexible manner Impact on Capital

Reduces capital demands for technology by increasing reuse and broader use of existing systems and information

Impact on Resources Increases reuse and application of existing systems and

business rules, reducing the need for additional applications Impact on Cycle Time

Accelerates the introduction of new products and services by shortening application development and deployment time.

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Business Needs Matrix – Wireless Description

Technology supporting point-to-point and point-to-multipoint device networked communications without a physical connection to the network

Impact on Customers Extends company ability to reach customers at their point and

place of need Impact on Capital

Improves capital asset flexibility as assets can be reallocated without requiring a change to the physical or technical infrastructure

Impact on Resources Decreases resource requirements as field service and other

assets can be dynamically rescheduled and reallocated; Increases need for support and management

Impact on Cycle Time Accelerates cycle time as it decreases the delays between

data/decision capture and business response

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Core BusinessLarger BusinessEcosystem

Extended Enterprise

DirectSuppliers Core

Contributors

DistributionChannels

Suppliersof mysuppliers

Customers of mycustomers

DirectCustomers

Competing organizations having shared product And service attributes, processes, and

Organizational arrangements

Government agencies and other regulatory organizations, investors

and owners, trade associations, standards bodies, unions

Joint Ventures

BusinessPartners

IS Stakeholders and the Business Ecosystem

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Scan and Track Technologies Technology Scan

Analyst companies, consultants, vendor presentations, government and university labs, trade press, conferences, networking

Organize the discovery process by information sources, application areas, or technology areas

Technology Profiles Name and definition of technology, business application,

benefit to company, potential business champion, activity to be leveraged, competitors’ adoption, level of maturity, level of risks, approximate costs

Emerging Technology Portfolio The set of technology profiles representing candidate IT

and technology –led initiatives the company has not yet adopted or fully exploited.

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Rank: Make the Prioritization Explicit Select the subset of technologies, initiatives and project

ideas that look most likely to bring significant benefit to the company.

Balancing resources for: Supporting business unit and management requests Identifying and driving forward strategic technologies ahead of

business unit requests. Technology radar screen (maturity, disruption, and

benefits) Technology scoreboards (benefits vs. cost & risk factors Technology hype cycle: timing the adoption opportunities

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Technology Radar Screen

Also consider:Level of disruption

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Evaluate and Decision IT project planning components

Detailed work breakdown, milestones, staffing, timeline, cost, deliverables, evaluation goals and criteria

Focus on specific application of the technology. Identify a business champion

Risk factors, and ROI Technology process failure, disruption of architecture or

processes, lack of management support, nonadoption or resistance by users, benefits not achieved, lack of maintainability, rate of obsolescence, lock in risks, regulatory environment, social acceptance and new business models

Prototypes Pilots

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Prototypes and Pilots Prototypes

A risk reduction tool to investigate areas of high technical uncertainty; also a marketing tool to increase internal awareness of a technology’s potential.

Pilots For investigating the impact of the technology in the

operational environment and to evaluate the usability and effectiveness of the pilot system with a small number of users, prior to a wider introduction.

Making the decision Proceed; Revisit the evaluation, wait till technology

matures further; remove the technology from the portfolio

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Evangelize: Marketing, education, and networking Marketing: Making others aware of the role and capabilities

of the ATG (as a resource) and selling the value of specific technology and application opportunities (showcase the technology in a business context).

Networking Education “evangelism” Overcoming organizational resistance

Create a sense of ownership Seed the technology among interested users Create a separate center of excellence. Mandate adoption among relevant classes of users.

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Technology Transfer

Transferring knowledge through people Bringing in staff Sending out staff temporarily Sending out staff permanently Rotating staff Transferring across the business

Consulting to operational development

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Starting and Managing an ATG Mission: to exploit emerging technologies to

develop and maintain the company’s competitive position

Reporting and governance Relationship with architecture group Funding the ATG

About 2% of IT spending

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Emerging Technology Budget as a Percentage of Revenue and IT Budget, by Company Size

Documents

ECT 589: E-Commerce Management