Introduction Organizations are establishing intranets and
rebuilding internal systems for e-business The successful use of Web-based internal systems
positions the firm to adopt e-commerce applications and transact business electronically with suppliers and customers
Many barriers exist within organizations that limit or impede e-business initiatives; successful managers must anticipate and remove these barricades
Re-engineering for E-Business
Business Process Re-engineering (BPR)A process where current business processes
are modeled from inbound processes through operational activities to outbound processesModel work and information flows
Application of e-business technologies allows a firm to improve operations by restructuringDe-optimized business processes create the
opportunity, IT helps capture the benefitsThis is truly business process innovation
AnalysisFirst goal is to identify those activities
the firm should not be doingEliminate redundant, wasteful activities
Second, is to find essential processes that can be accomplished more effectively outside the firmOutsource non-core business processes
Payroll processing, desktop support
SynthesisFor the activities that remain, innovative
new processes need to be devisedThese new processes must look to leverage IT
and communication technologiesMany times great efficiencies can be created
when sequential processes are redesigned to work in parallelParallelism may be created within a firm and
between firms using IT and Internet linked systems
Distributed SystemsDistributed systems consist of powerful
workstations attached to LANs connecting workers to databases, servers, and storageYields operational flexibility and increased
responsiveness to business pressuresReplaces rigid top-down systems with local
expertiseMore employees can have access to more
and higher quality data
Client/Server Operations
Client/server operations divide the complete application (presentation, function, data management) into two parts connected via a high speed networkThis networked architecture changes and
rearranges workflowAffects people, processes, and organizationsRequires restructuring of hardware, software,
telecommunications, and applications
Client/Server Operations
PC-based Web browsers have provided businesses with the universal/generic clientMany applications have begun to
incorporate Web portals – Web functions allowing application usage via browsers
Use of Web browsers leverages user interface familiarity to enable new workers to quickly learn applications
Client/Server Operations
Depending on the application, the client, and the network, configuration of the client/server architecture can place greater or lesser performance demands on the various components Thin clients with no local storage and modest
computing power put greater demands on the network and server, but can be placed easily as point of sale terminals
Full workstations with fast processors can do most work locally with little server support
Building Client/Server Applications
Successful implementation of client/server systems results from planningNo one planning methodology is adequate;
managers must seek a blend based on the situation
Client/server application development requires programmers with strong skills in new tools and techniques
The management plan needs to be developed concurrently with the application
Issues of Distributed Computing
Software and application issues Hardware compatibility and maintenance issues Telecommunications issues Data and database issues Asset protection and security issues Business controls issues Financial concerns Political, cultural, and policy issues Staffing and personnel issues
Compatibility Compatibility between commonly used
applications significantly enhances the effectiveness of distributed computing
Incompatibilities between basic programs increase costs, reduce ease of data sharing, and cause increased complexity with other applications
Standardized hardware platforms make installation and support of networking and software cost effective
CommunicationThe firm’s physical network
architecture, communication software, and protocols should be standardized
Policies are needed for linking to and using outside databases, the Internet, and EDI
DatabasesFirms must clarify issues of ownership,
control, and responsibilityIntegrity issues must be addressed
formally with controls covering uploading and downloading of data
IT must create a balance for the firm between accessibility and security
Security IssuesAs technology dispersion brings
powerful systems and applications to the level of the department, critical IT management responsibilities migrate with themDisaster recovery planning and
managementAsset securityPhysical access controls
Political IssuesMigration from centralized computing
to a client/server model shifts the firm’s power structure, giving more people the power to evaluate data and make decisions
Widespread implementation of IT tends to flatten a firm’s structure; this change causes displacement of managers and changes in power relationships
Staffing and Personnel Issues
The most critical factorConsiderable training is required to
support this transformationNot all employees can adapt and take full
advantage of the new toolsLeadership changes are required to
effectively lead re-engineered departments
Understanding and addressing these stresses in a formal manner is critical
Human Support Infrastructure
Staffing, training, and support issues are an ongoing challenge to IT
For firms undergoing extensive or prolonged IT changes, establishing a formal department to support this new need is commonly doneCalled by many names: Help Desk,
Customer Support,It receives assistance from IT, but includes
non-IT members as well
Info CenterSupports the firm’s IT migration by
centralizing support, purchasing, and application licensingHelps to maintain compatibility across the
firm for hardware and softwareActs as a central maintenance depotData gathered by the info center during
support activities can be used to glean customer preferences and trends
Help Desk FunctionsConduct or provide user trainingProvide development assistanceEvaluate new applicationsDistribute customer informationAnswer routine customer questionsAssist in problem determinationGather planning information
E-Business, The New Paradigm
E-business represents an integrated approach to obtaining differentiated value by combining information systems and business processes with Internet technologies
E-business is broader than e-commerce or e-marketing because when businesses are connected to the Internet, they are forced to restructure operations and capitalize on the natural strengths of the Web
Intranets and Extranets
Intranet – an internal Web site containing company-specific information with access restricted to the employees of the firmUsed to communicate information like
product documentation, corporate policies, or procedures
They have become much more efficient systems for communication
Span of control is replaced by span of communication (Drucker)
Intranets and Extranets
Extranet – private networks based on Web protocols and standards linking corporations togetherData is secured and private, off the public
InternetWeb standards make it easy to create and
remove shared contentUse of extranets to link suppliers and their
customers helps decrease inventory, increase returns, and reduce carrying cost
Developing and Using Intranets and Extranets
Deployment of a corporate intranet is the first step in preparing to deploy an e-businessIntroduce employees to digitized business
processesEncourage business process redesignRequire deployment of middleware
SecurityAccess controlCommunications systems (e-mail, IM, etc.)
Developing and Using Intranets and Extranets
The second step is to connect the intranet to the InternetAllows employees to:
obtain external informationcorrespond with external customers
Helps grow the culture of electronic interaction, digitized processes, and streamlined processes
The third step is to link employees to ERP systems over the intranet
Developing and Using Intranets and Extranets
Finally, an extranet is created linking suppliers, select customers, and internal staff; an embryonic B2B implementation is createdPlace ordersReceive invoicesFunds transfersCheck stocking levels
B2CPermits millions of customers to select
and order products, make payments, or return merchandiseThese are sophisticated systems requiring
all the preceding technologies and business practices to be implemented and mastered
B2C operations open new possibilities with data mining, marketing, and product branding
Management IssuesE-business places greater demands on
the firm’s managers and technical personnelNew tools are used: XML, HTML, JAVANew processes are neededUptime, reliability, and disaster recovery
must be impeccableIT managers must focus on the firm’s e-
business goals, and other dept. managers must understand IT operations
Managing Web-Hosting
Companies lacking internal resources or needing rapid time to market may choose to outsource their Web operations Businesses are trusting their online presence to
another firm, and must carefully screen their new business partner
Level of experience and commitmentDepth of financial resourcesPhysical assetsAvailability and uptimeStability
Application HostingApplication programs are supplied to a
business on a lease type basisThe applications continue to reside at the
hosting company and are accessed via the InternetPayroll, inventory, order fulfillment, billing
As firms re-evaluate core activities, ASP solutions can take over most of IT functionsRadiology departments outsource storage of
images and reportsRetailers outsource data warehousing / mining
E-SourcingAt the extreme, firms would transfer
physical IT assets (hardware, software, people, networks) to the e-sourcing firmA large e-sourcing firm can offer scalability,
flexibility, and economies of scaleTrades ownership of assets for increased
access to data warehousing, IT expertise, and management skills
Confirms the concept of computing as a utility
Implementing E-Business Systems
Implementing client/server or Internet technology poses many unique and difficult challenges to IT managersOrganizational factorsInformation infrastructure issuesSystems management issuesOther management issues
Organizational Factors
When implementing networked / e-business systems, management must have a unified strategic vision
Most new business processes cause a flattening of corporate structureSenior management must understand and
be ready to transition redundant managers and management levels into new areas of responsibility
Information Infrastructure
Most firms have some pre-existing infrastructure; new equipment must mesh with existing equipmentSome vendors supply hardware, software,
and networks as a package; integration with existing systems must also be provided
Claims of interoperability and open design must be scrutinized
IT staff must have the skills and training to support the new systems
Systems Management
When transitioning from centralized to distributed systems, physical asset management must be addressedWorkstation securityPassword managementLicense requirementsSoftware installation and controlConfiguration management
Management IssuesQuantifying benefits of networked systems
to organizations is difficult because they most often have their greatest impact on organizational effectivenessMost firms classify these investments as
strategic with a return anticipated in the futureCommonly these systems do not result in cost
savings to the firm but increased revenueE-business investments must be directed from
the highest levels of the firm
Policy ConsiderationsHardware and software compatibility
Presents a tradeoff between ease of data interchange, economies of scale in procurement, training and support vs. overall capability
Middleware standardsE-mail infrastructure, network management
systems, authentication servicesOwnership and responsibility for
distributed hardware, applications, data
People Considerations
Effective intranets, extranets, and other e-business systems directly affect traditional reporting relationshipsIncreasing employees span of
communication shift their perspective of their place in the firm
Loyalties move from the immediate manager to the department, or other individuals in the hierarchy
Managers must constantly focus on building good communication with employees
Managing Expectations
Installation of distributed systems must be done in a stepwise processUse of prototype test-beds and an iterative
approach helps ease technology transitions
Prototyping helps to ground plans on real world interactions
Human factors must be addressedEase of use and interface design can make or
break a project
Change ManagementThree phases
First – during prototyping, the next target group of users should be informed and brought up to speed on the project
Second – as new users are introduced to the system, they should be paired with experienced users; additional staff needs to be available
Third – feedback from the new users needs to be incorporated into the application
Summary Networked application systems are one of
the most important developments in IT history
Managers must select and implement systems that work in their specific environments and be capable of managing the resulting profound changes that ensue
Distributed computing has high potential payoff, and can create a win – win situation