GLOBAL MANAGEMENT OF E-BUSINESS

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GLOBAL MANAGEMENT OF E-BUSINESS E-COMMERCE

• Chang-Yang Lin, Ph.D.
• Professor and Coordinator
• Computer Information Systems Program
• Eastern Kentucky University

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Global Management ofE-Commerce and E-Business

• E-Commerce and E-Business
• Practices of IT Management
• E-Business Planning and Information Resource
  Planning
• Global E-Business Issues
• The Challenge Some Concluding Remarks

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E-Commerce E-Business

• E-Commerce the buying selling, marketing
  servicing, and delivery payment of products,
  services, and information over the Internet,
  intranets, and extranets between an enterprise
  and its prospects, customers, suppliers, and
  other business partners

• E-Business the use of Internet technologies to
  internetwork and empower business processes,
  e-commerce, and communication and collaboration
  within a company and with its customers,
  suppliers, and other business stakeholders

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E-Commerce E-Business
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Source Natl Academic Press, http//books.nap.ed
u/books/0309051797
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The Results of Hersheys ERP Failure

• A 12 sales decline
• An inability to ship complete orders to some
  retail customers
• An increase in typical delivery times from 5 days
  to 12

• A 29 increase in year-to-year inventory costs
• Strained customer relations and major
  market-share losses

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Enterprise Resource Planning (ERP)

• ERP Integrated cross-functional software that
  reengineers manufacturing, distribution, finance,
  human resources and other basic business
  processes of a company to improve its efficiency,
  agility, and profitability
• Vendors
• SAP R/3
• PeopleSoft

• Reasons for implementing an ERP system
• To integrate applications and data to support
  decision-making needs
• To force business process reengineering
• To give the firm the competitive advantage to
  survive

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The E-Organization

• Organization structure
• Networked
• Cisco maintains a strong web of strategic
  partnerships systems integration with
  suppliers, contractors, and assemblers
• Leadership
• Everyone is a leader
• 40 acquisitions become autonomous business units

• Knowledge
• Shared
• the suppliers production processes are pulled by
  Ciscos demand
• a save of 500 million from supply chain
  management, online technical support, software
  distribution

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The E-Organization

• Alliance
• create new value and outsource uncompetitive
  services
• Ally with competitors, customers, and suppliers
• 50 of customer orders that come in over its
  website are routed electronically to a supplier
  who ships directly to the customer

• Governance
• Internal and external
• Ciscos rapid acquisitions process
• Ciscos ability to integrate its acquisitions
  quickly into the family
• People and culture
• Delegated authority collaboration expected and
  rewarded
• Turnover (Cisco 6.7 industry 18)

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Managing IT Organization

• Hire IS professionals who can flexibly integrate
  new IT and business competencies
• Evolving workgroups organized around emerging
  IT-intensive business initiatives

• IT funding typically based on value proposition
  around business opportunity related to building
  services for customers. IT project inseparable
  part of business initiative

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• E-Business Planning

Business Value Visioning
Application Development and Deployment
Information Resource Planning
Business Strategies and Models
IT Strategies and Architecture
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Information Resources Planning Process
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Information Resource Planning

• Assessment of Current Information Resources
• Information Vision Information Technology
  Architecture
• Strategic Operational IS Plans Must Move Toward
  Desired Architecture

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Information Resources Assessment

• Critical Evaluation of Inventory of Hardware,
  Software, People
• Looks at Quality of Resources
• Helps Meet Business Needs of Organization
• Example

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Information Vision Architecture

• Information Vision Written expression of desired
  future for information use management
• Technology Architecture Description of how
  information resources should be deployed to
  achieve the information vision

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Assessing the Organization Ask these questions

• Do key executives understand the impact of IT on
  the companys competitive position?
• Do they understand what is possible with current
  and forthcoming technologies?
• Do they know how the capabilities and economics
  of IT will change the way the business is
  operated and managed?
• Does the company have the right balance between
  innovation and managing scarce technology
  resources?

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Assessing Current Information Resources

• Measure Use and Attitudes
• Review IS Organizational Mission
• Information Vision A mission can best be defined
  by delineating the reasons for having an IS
  function. Each reason is classified under one of
  the following categories
• Efficiency Uses minimum resources to do its job
• Effectiveness Helps users spend time doing right
  things
• Competitiveness Helps ensure organizations
  competitive position

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Examples of Information Resources Assessment

• A single IS does not exist in our organization
• Substantial potential exists for cleaning up the
  automation of existing work processes
• Significant gaps exist in automation of the
  value-added process in our company
• There is a perception that the IS organization is
  not a company-wide support organization
• Except for the last year and a half, IS appears
  to have been a stepchild of senior management
• There is a significant perception among the user
  population that IS is not particularly responsive
  to their needs

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Examples of Information Resources Assessment
(continued)

• IS personnel seem dedicated to IS and the company
• The level of user training and support is
  substantially below needs and expectations
• While the workload in IS is heavy at times,
  current staffing levels should be sufficient to
  meet current expectations
• The Internet is not used extensively
• Additional issues
• Hardware Network infrastructure
• Databases Software applications

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CREATING INFORMATION VISION

• Speculate How will competitive environment
  change?
• Current System Can it do future job?
• Identify Changes How must IS change to allow
  company to take advantage of future environment?

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IS Mission Statement An Example

• Information Services is responsible for a wide
  variety of computing systems and services for the
  people of corporation. In this role, the
  department
• Provides a secure location for housing and
  accessing the official electronic data records of
  the company
• Maintains shared computer processing capacity and
  support for file maintenance and information
  reporting
• Manages a corporate data network that delivers
  services to departmental servers and individual
  workstations linked to its data center
• Provides integrated IS development for
  departments in order to advance organizational
  strategies

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IS Mission Statement Another Example
In order to meet the challenges outlined within
the company Vision Statement and support the
strategic objectives and values of our company,
the mission of Information Services is to provide
reliable information, data, and computing
services to all clients, both within and, where
appropriate, outside of the company. To
accomplish this role, it will be necessary to
exercise leadership in identifying new management
tools based on evolving IT that enables
management to increase their effectiveness in
operating and managing the business. The
departments ultimate objective is the
development of an integrated information
infrastructure and associated services required
to facilitate the decision-making process.
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ELEMENTS OF IT ARCHIETCTURE

• Technology Component
• Hardware
• Software
• Network
• Data
• Human Component
• Personnel
• Values/Culture
• Management System

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STRATEGIC IS PLAN

• Set of Long Range Goals Which Document Movement
  Toward Information Vision Architecture
• Associated Major Initiatives to Achieve Goals
• Development Steps
• Set Objectives
• Conduct Internal External Analysis
• Establish Strategic Initiatives
• Critical Success Factors
• Analyze Competitive Forces
• Value Chain Analysis

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VALUE CHAIN ANALYSIS

• ACTIVITIES THAT ADD VALUE FOR THE CUSTOMER
• PRIMARY ACTIVITIES (PRODUCT)
• INBOUND LOGISTICS
• OPERATIONS
• OUTBOUND LOGISTICS
• MARKETING SALES
• SERVICE

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OPERATIONAL IS PLAN

• Precise set of short term projects to be executed
  by IS department user-managers in support of
  strategic IS plan
• LONG TERM Two-to-three years, project
  definition, selection, prioritization. Based on
  anticipated changes in business
• SHORT TERM One year, linked to annual budget.
  Focuses on completing current projects, beginning
  new ones. Immediate hardware, software, staffing
  needs

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Benefits ofInformation Resources Planning

• Better IS Resource Allocation
• Communicates with Top Management
• Helps Vendors
• Creates Context for Decisions
• Achieves Integration Decentralization
• Evaluates Options
• Meets Management Expectations

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Outline of an Operational IS Plan

• Mission
• Environment of IS information needs of the
  various user groups and of the corporation as a
  whole
• Objectives of IS Department
• Constraints on IS Department the limitations
  imposed by technology in general and the
  constraints imposed by the resources within the
  company (financial, technological, personnel)

• Long-Term Systems Needs
• Short-Range Plan a detailed inventory of present
  projects and systems, and a detailed plan of
  projects to be developed or advanced during the
  current year
• Contingencies events that may affect the plan

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E-Business Planning Process

• Strategy development
• Developing strategies that support a companys
  vision, and use IT to create innovative
  E-Business systems that focus on business value
• Resource management
• Developing strategic plans for managing or
  outsourcing a companys IT resources
• Technology architecture
• Making strategic IT choices that reflect an IT
  architecture designed to support a companys
  E-Business initiatives

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IT Architecture a conceptual blueprint including
the following components

• Technology platform
• The Internet, intranets, extranets, computer
  systems, system software, enterprise application
  software
• Data resources
• operational databases, information databases,
  data warehouses, hypermedia databases
• Applications architecture
• including support for developing and maintaining
  supply chain applications, ERP, and customer
  relationship management applications
• IT organization

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Managing the IS Function

• Organizing IT
• More centralized control over the management of
  the IS resources while serving the strategic
  needs of its business units
• Separate .com business units
• Outsourcing
• ASP
• Technology management

• Managing Application development
• Managing IS operations
• Performance monitors supply information needed by
  chargeback systems that allocate costs to users
  based on the information services rendered
• Managing user services
• Human resource management of IT

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Premiere Technologies, Inc. ing yl yi
Using ASPs

• Goal
• Rescue a failing PeopleSoft ERP project without
  compromising core business efforts
• ASP TransChannel LLC, Atlanta
• Solution
• Premiere turned the whole project over to the ASP
  to manage
• Result
• Saving about 3 million over five years by giving
  the work to TransChannel

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Mission Statement

• Mission We will become the world's most valued
  company to patients, customers, colleagues,
  investors, business partners, and the communities
  where we work and live.
• Values To achieve our mission, we affirm our
  values of Integrity, Leadership, Innovation,
  Performance, Teamwork, Customer Focus, Respect
  for People, and Community.

• Integrity We demand of ourselves and others the
  highest ethical standards, and our products and
  processes will be of the highest quality.
• Customer Focus We are deeply committed to
  meeting the needs of our customers, and we
  constantly focus on customer satisfaction

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Mission Statement

• Respect We recognize that people are the
  cornerstone of Pfizer's success, we value our
  diversity as a source of strength, and we are
  proud of Pfizer's history of treating people with
  respect and dignity.
• Performance We strive for continuous improvement
  in our performance, measuring results carefully,
  and ensuring that integrity and respect for
  people are never compromised.

• Teamwork We know that to be a successful company
  we must work together, frequently transcending
  organizational and geographical boundaries to
  meet the changing needs of our customers.
• Innovation is the key to improving health and
  sustaining Pfizer's growth and profitability.

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Mission Statement

• Leadership We believe that leaders empower those
  around them by sharing knowledge and rewarding
  outstanding individual effort. Leaders are those
  who step forward to achieve difficult goals,
  envisioning what needs to happen and motivating
  others.

• Community We play an active role in making every
  country and community in which we operate a
  better place to live and work, knowing that the
  ongoing vitality of our host nations and local
  communities has a direct impact on the long-term
  health of our business.

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Our Values

• Respect for people that includes our concern for
  the interests of all people worldwide who touch
  or are touched by our company customers,
  employees, shareholders, partners and communities
  
• Integrity that embraces the very highest
  standards of honesty, ethical behavior and
  exemplary moral character

• Excellence that is reflected in our continuous
  search for new ways to improve the performance of
  our business to become the best at what we do

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Mission Statement

• Mission
• to provide society with superior products and
  services -- innovations and solutions that
  improve the quality of life and satisfy customer
  needs -- to provide employees with meaningful
  work and advancement opportunities and investors
  with a superior rate of return.

• Our Values
• Our business is preserving and improving human
  life. All of our actions must be measured by our
  success in achieving this goal. We value above
  all our ability to serve everyone who can benefit
  from the appropriate use of our products and
  services, thereby providing lasting consumer
  satisfaction. .

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Our Values (continued)

• We are committed to the highest standards of
  ethics and integrity. We are responsible to our
  customers, to Merck employees and their families,
  to the environments we inhabit, and to the
  societies we serve worldwide. In discharging our
  responsibilities, we do not take professional or
  ethical shortcuts. Our interactions with all
  segments of society must

• reflect the high standards we profess.
• We are dedicated to the highest level of
  scientific excellence and commit our research to
  improving human and animal health and the quality
  of life. We devote our resources to meeting the
  needs of consumers

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Our Values (continued)

• We expect profits, but only from work that
  satisfies customer needs and benefits humanity.
  Our ability to meet our responsibilities depends
  on maintaining a financial position that invites
  investment in leading-edge research and that
  makes possible effective delivery of research
  results.
• We recognize that the ability to excel -- to
  meet society's and customers' needs --

depends on the integrity, knowledge,
imagination, skill, diversity and teamwork of
employees, and we value these qualities most
highly. To this end, we strive to create an
environment of mutual respect, encouragement and
teamwork -- a working environment that rewards
commitment and performance and is responsive to
the needs of employees and their families
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Global Market Challenges

• Political challenges
• Rules regulating transfer of data
• Restrict/tax/prohibit imports
• Local content laws that specify the portion of
  the value of a product that must be added in that
  country
• Geoeconomic challenges
• Too long to fly
• Difficult to communicate in real time

• Cultural challenges
• languages, cultural interests, religions,
  customs, social attitudes, and political
  philosophies managers must be trained and
  sensitized to such cultural differences
• Differences in work styles and business
  relationships teams vs individuals one
  leadership vs shared leadership

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Global E-Business StrategiesThe Transnational
Approach

• A business must depend on its information systems
  and Internet technologies to help it integrate
  its global business activities
• A business must develop an integrated and
  cooperative worldwide hardware, software, and
  Internet-based architecture for its IT platform.
• Examples

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Transnational Strategies byAmerican Express

• Tactic Global customer service
• IT Environment
• Global network linked from local branches and
  local merchants to the customer database and
  medical or legal referrals database
• Results
• Worldwide access to funds
• Global Assist hotline
• Emergency credit card replacement
• 24-hour customer service

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Transnational Strategies by Benetton

• Tactic Global sourcing and logistics
• IT Environment
• Global network, EPOS terminals in 4000 stores,
  CAD/CAM in central manufacturing, robots and
  laser scanner in their automated warehouse
• Results
• Produce 2000 sweaters per hour using CAD/CAM
• Quick response (in stores in 10 days)
• Reduced inventories (JIT)

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Business Drivers for Global E-Business

• Global customers
• People who may travel anywhere or companies with
  global operations
• Global IT can help provide fast, convenient
  service
• Global products
• Products are the same or are assembled by
  subsidiaries throughout the world

• Global IT can help manage worldwide marketing and
  quality control
• Global operations
• Parts of a production or assembly process are
  assigned to subsidiaries based on changing or
  economic conditions
• Global IT can support such geographic flexibility

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Business Drivers for Global E-Business

• Global resources
• The use and cost of facilities and people are
  shared by subsidiaries of a global company
• Global IT can keep track of such shared resources

• Global collaboration
• The knowledge and expertise of colleagues can be
  quickly accessed, shared, and organized to
  support individual or group efforts
• Global IT can support such enterprise
  collaboration

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Global ERP Issues

• Gillette
• ERP applications using SAP and PeopleSoft because
  they automatically create reports in different
  languages
• Development work is done in Boston, deployment
  and screen labeling is handled locally to
  overcome language barriers

• Nypro
• Runs an ERP system from eBPCS
• Provides China plants with networked ERP systems
• Put control over ERP data extraction and
  manipulation in local hands

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Key Questions for Global Websites
What content will you translate, and what content
will you create from scratch to address regional
competitors or products that differ from those in
your country? Should your multilingual effort be
an adjunct to your main site, or will you make it
a separate site, perhaps with a country-specific
domain name?
What kinds of traditional and new media
advertising will you have to do in each country
to draw traffic to your site? What are the legal
ramifications of having your website targeted at
a particular country, such as laws on competitive
behavior, treatment of children, or privacy?
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Business Managers inInformation Resource
Planning Process

• Assessing the current environment and proposing
  ideas for the future computing environment
• Being creative in thinking about IT applications
  and be knowledgeable about her departments
  information needs
• Involving during resource and funding
  justification process
• Involving in the process of systems
  implementation and training
• Creating an atmosphere that is conducive to
  acceptance of the new applications

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Success Factors to Implement ERP

• Real commitment from top management
• Conveying this commitment throughout the company
• Sufficient resources devoted to the project
  including employment of a consulting firm to help
  implement the ERP system

• Sufficient managerial and IS professional time
  devoted to the project
• Processes must be changed to conform those
  prescribed by the ERP package

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