E-Business Design and Strategy

1. E-Business Design and Strategy MIS 4133 Software Systems Fall 2005

2. Outline Design and Strategy Phases Why e-Businesses Fail

3. E-business Strategy About the uncertain future Based on assumptions, premises, and beliefs about customer priorities, technology evolution, competition, and the core competencies

4. A Generic Business Model

5. A Generic E-Business Model

6. E-Business Design Phases Phase 1: Knowledge building Phase 2: Capability evaluation Phase 3: E-business design Phase 4: Blueprint design Phase 5: Business case creation Phase 6: Blueprint execution

7. Phase 1: Knowledge Building Enables managers to understand customers� priorities Categorizing customers Changing customer priorities Targeting customers Adding value Dazzling customers Distributing products Analyzing the environment and industry trends Understanding technology trends Prioritizing in the supply chain Knowing the competitors

8. Phase 2: Capability Evaluation Assessing capabilities Determining strengths and weaknesses Aligning firm�s vision and capabilities

9. Phase 3: e-Business Design Select design Category killer Unique customer need; remain ahead of competition Channel reconfiguration Directly access customers Transaction intermediary Process purchases Infomediary Reduce search cost Self-service innovator Services customer�s employees can use directly Supply chain innovator Streamline interactions among all parties in the supply chain Channel mastery Sales and service channel; supplement to existing channel

10. Phase 3: e-Business Design Cont. Refinement Customer selection Customer experience Customer capture Scope of design Ease of doing business Organizational systems

11. Phase 3: e-Business Design Cont. Clarify differentiation Product features Marketing channels Service and support tailoring Brand / image positioning Price

12. Phase 4: Blueprint Design Active projects are constantly updated, revised, and prioritized Prioritize Manages streams of innovation Plans for long-term success Business case for action Details of blueprint plan App implementation execution

13. Phase 4: Blueprint Design Cont. Investment in integration Capital budgeting, investing in new technologies, and allocating scarce resources Project types Incremental � Derivatives, add-ons, and enhancements Break-through � substantial changes in firm foundation Platform � new structural foundation

14. Aim of overall e-business design Scope Classify and analyze the application frameworks Prioritize Execution plan Phase 4: Blueprint Design Cont.

15. Phase 5: Business Case Creation Develop clarity of purpose that allows scarce resources to be targeted for maximum results Developed using a cross-functional process and varying people and and skills

16. Phase 5: Business Case Creation Cont. (Case Elements) Project Justification Strategic Operational Technical Financial Preliminary Scope of the Project Assessment Organizational Functional High-level app architecture High-level project plan Resource requirements Feasibility Assessment Financial Organizational / Cultural Technical Suppliers, partners, and customers

17. Phase 6: Blueprint Execution Detailed pattern for execution Imperatives: speed, efficiency, flexibility, and quality Transition from old apps to new apps

18. Why e-Businesses Fails Too many projects Lack of funding (takes a few years to get customer base) Resources / people spread too thin (increases cycle time) No tough decision points and poor project selection decisions (therefore good projects are starved for resources) Decisions based on politics, disputes, and emotion

19. Another Approach to an E-Business Plan Used to seek funding for a new or existing e-business and serves as a design for operating an e-business after it is funded Executive summary (miniature version of complete business plan) Vision (long-term goals) and mission (how reach vision) statements Description of e-business idea (outline of e-business background and business concept) Info on target audience Info on products/services to be offered Analyses on the e-business�s overall industry, target market, and competition Marketing, operational, financial, sales, technology and managerial plans Identification of critical risks (SWOT analysis) Exit strategy (tells investors how they will recover their investment, and identifies the long-term plans for the e-business and its principals)

20. Example EC Mission Statement eBay.com �We help people trade practically anything on earth. eBay was founded with the belief that people are basically good. We believe that each of our customers, whether a buyer or a seller, is an individual who deserves to be treated with respect. We will continue to enhance the online trading experiences of all � collectors, hobbyists, dealers, small businesses, unique item seekers, bargain hunters, opportunistic sellers, and browsers. The growth of the eBay community comes from meeting and exceeding the expectations of these special people.�

23. Example As manager of networks and computing operations for Fashion Land, a retailer of women�s clothing and accessories, you have seen the business grow from seven stores in Kansas City to over 100 stores located throughout the Midwest. Fashion Land�s marketing research team has found that many members of its target customer group � females between the ages of 15 and 35 � are becoming regular users of the Web. The researchers have found that these customers would not want to buy major clothing items on the Web; however, they would like to buy accessories.

24. Example Cont. Outline a business strategy for Fashion Land�s electronic commerce initiative. The outline should include: List of specific objectives Costs/benefits of accomplishing each objective Recommendation regarding what to outsource Web hosting services that will be needed Staff that should be hired Existing applications that will need to be integrated Etc.