Chapter Four Chapter Four Thinking E-Business Design: More Than Technology www.ebstrategy. com 2 - © e-Business Strategies, Inc. Introduction Introduction 3 interlocking layers of e-business e-Business Design – What business design can make your customers’ shopping and 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 www.ebstrategy. com 3 - © e-Business Strategies, Inc. Introduction Introduction 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 www.ebstrategy. com 4 - © e-Business Strategies, Inc. 3 interlocking layers of e-business 3 interlocking layers of e-business E-Business E-Business InfoStructure InfoStructure Scalability Scalability Reliability Reliability Hosting Hosting Storage Storage Servers Servers Databases Databases Middleware Middleware Routers Routers Site Security Site Security Data Security Data Security Transaction Security Transaction Security E-Business E-Business Design Design Business Model Scope Business Model Scope Customer Selection Customer Selection Value Creation Value Creation Strategic Control Strategic Control Organizational Systems Organizational Systems E-Business E-Business Infrastructure Infrastructure CRM CRM e-Procurement e-Procurement ERP ERP Supply Chain Supply Chain Financials Financials Selling Chain Selling Chain Business Intelligence Business Intelligence Portals Portals www.ebstrategy. com 5 - © e-Business Strategies, Inc. The Race to Create Novel e-Business The Race to Create Novel e-Business Designs Designs 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 www.ebstrategy. com 6 - © e-Business Strategies, Inc. The Race to Create Novel e-Business The Race to Create Novel e-Business Designs Designs Focus no longer limited to process improvement; focus of change initiatives shifted to business redesign – Retail drug industry Success depends on how quickly a company can formulate novel business designs and adapt them to its markets www.ebstrategy. com 7 - © e-Business Strategies, Inc. Step 1: Self Diagnosis Step 1: Self Diagnosis Assess impact of recent customer, business and technological 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 opportunities while also preserving investments in people, apps and data? – Is your company successful at lowering operating costs while making complex business apps adaptive and flexible to change under the relentless pressure of time to market? www.ebstrategy. com 8 - © e-Business Strategies, Inc. Step 1: Self Diagnosis Step 1: Self Diagnosis Innovator or market leader: All answers yes Early adopter or visionary: Most answers yes – Charles Schwab Silent majority: Few answers yes – Pragmatists, Old-guard Conservatives, and Die- hard Skeptics www.ebstrategy. com 9 - © e-Business Strategies, Inc. Step 2: Reverse the Value Chain Step 2: Reverse the Value Chain Greatest challenge in e-business: linking emerging tech to new business design Managers find creating new business designs difficult with emerging technologies and customer needs – trained to concentrate on improving products, increasing market share, and growing revenues – distinction between products and services blur in e- business world www.ebstrategy. com 10 - © e-Business Strategies, Inc. Step 2: Reverse the Value Chain Step 2: Reverse the Value Chain Successful companies invent value, not just add value – outside in vs. inside out – customer requirement important in outside in approach – Starbucks invented value where traditional companies did not by creating business around gourmet coffee Outside-in, customer centric approach essential in times of great structural transition in economy [...]... centralized coordination Create an e-business app architecture addressing three critical requirements – interface – integration – innovation Integrate but plan for continuous growth and change – start small – build on success – build, launch, learn © e-Business Strategies, E-Business Strategies, Inc www.ebstrategy.com contact@ebstrategy.com 67 8-3 3 9-1 236 x201 Fax - 67 8-3 3 9-9 793 ... Online Travel Services Private Banking Operational Excellence at Dell Build-to-order e-business design – low-cost manufacturing and fast-cycle product development Integration of customer demand from the directsales channel with back-end supply chain – enables cost-effective selling directly to customers, bypassing resellers and their markups Computer distributors that once controlled PC business went... e-business requirements? • Execs must be willing to cut losses and abandon important current projects that do not support the goals of the e-business design © e-Business Strategies, Service Excellence at American Express Business transformation of the mid 1990s resulted in new e-business design concentrating on mgmt of customer relationships – In era of limited personal time, customers concerned about... Delivering high-quality products quickly, error free, and for reasonable price Continuous-innovation excellence – Delivering products and services that push performance boundaries and delight customers © e-Business Strategies, Service Excellence © e-Business Strategies, Service Excellence Involves selecting a few high-value customer niches and then making a concerted effort to serve them well – Requires... 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 © e-Business Strategies, Operational Excellence © e-Business Strategies, Operational Excellence Involves providing lowest-cost goods and services possible... Reverse the Value Chain Traditional Business Design In-house Core Competencies Rigid Infrastructure/ Processes Products/ Services Channels Customers e-Business Design Customers Needs © e-Business Strategies, Integrated Channels Products/ Services Flexible Infrastructure/ Processes Outsourced/ In-house Core Competencies Step 3: Choose a Focus Service excellence – Delivering what customers want with hassle-free... Document publication $40 m 600,000 500,000 40 0,000 Satisfaction 300,000 Satisfaction 3 .4 3 .4 200,000 100,000 0 Jan Satisfaction Satisfaction 4. 17 4. 1 • Over 70% questions handled on line Apr May Oct Jan 1995 © e-Business Strategies, Apr Jul Oct Jan Apr Jul 1996 Oct Jan Apr Jul 1997 Oct Jan Apr 1998 Jun Lessons from e-Business Design Be customer focused Value creation a continuous process Transform business... custom discounts and other deals directly on card members’ bills Investing $1 billion annually in the construction of a sophisticated service infrastructure – Within financial services industry, this can provide means to develop competitive advantage and raise barriers to entry © e-Business Strategies, Service Excellence at American Express The Way It Was The New Way Travel Services © e-Business Strategies,... technological innovation Key principles – – – – risk-oriented mgmt style growth by mergers and acquisitions market-education style encouraging innovation © e-Business Strategies, Step 4: Execute Flawlessly • How can you move from where you are today to where you want to be? • How do you integrate and tailor your legacy infrastructure to meet new e-business requirements? • Execs must be willing to cut... assets mgmt of efficient transactions mgmt of sales intelligence dedication to measurement systems mgmt of customer expectations © e-Business Strategies, Continuous-Innovation Excellence © e-Business Strategies, Continuous-Innovation Excellence Involves not only providing best-possible products and services but also offering customer more exciting features and benefits than competitor – Microsoft, Sun . www.ebstrategy. com 5 - © e-Business Strategies, Inc. The Race to Create Novel e-Business The Race to Create Novel e-Business Designs Designs Getting it right the first. priorities www.ebstrategy. com 6 - © e-Business Strategies, Inc. The Race to Create Novel e-Business The Race to Create Novel e-Business Designs Designs Focus