An introduction to eBusiness strategies
What is an eBusiness strategy? It is a business strategy that incorporates information technology (IT) opportunities across a supply chain. It is not a technology strategy. These opportunities involve automating business processes and providing information for making decisions. Let's review several examples of eBusiness opportunities before we de-fine the strategy. These include marketing, demand planning, quote to cash, and product consumption.
Marketing. Portals and electronic campaigns increase reach into new markets. Data analysis of customer buying patterns can expose new opportunities for marketing, up-selling, cross-selling, and targeted campaigns.
Demand planning. Using the Internet to share demand forecasts, inventory levels, point of sales data, and production schedules between buyers and suppliers can significantly reduce manufacturing, carrying, and shipping costs. Delivery date adherence can be dramatically improved. Suppliers can also provide buyers with services such as inventory management and product design.
Quote to cash. The Internet can greatly streamline the quote to cash process. Bids and quotes can be obtained online using collaborative technology. Electronic catalogs simplify access to product information and shorten the order entry process. Online access to order and shipping status can be provided. Invoicing, reconciliation, and payment processes can be automated.
Product consumption. For end-users, converters, and printers, the Internet can enhance access to product specifications, frequent questions, or discussions with a technical support specialist. Performance information can be returned to the manufacturer to assist in product improvements.
eBUSINESS STRATEGY. eBusiness strategy should focus the organization on high priority opportunities. Teams consisting of business management, marketing, purchasing, logistics, and IT accomplish this objective. Outside assistance from an IT consultant, software supplier, or Internet boutique can also be helpful. eBusiness strategy is often divided into four components: suppliers, customers, new business, and technology.
Suppliers. The procurement component considers opportunities to streamline and consolidate the purchase of goods and services. Several companies provide procurement packages and services that work well for stock items. Solutions for products requiring complex order configuration are less mature. Four major issues must be addressed for successful implementations:
1. The social impact of reengineering the procurement process
2. Define workflow process and authorizations
3. Standardize naming conventions for catalog items
4. Integrate the procurement system with acc-ounting and maintenance systems
Customers. The customer component considers channel opportunities with direct customers, merchants, distributors, and alliance partners across each product line. Order management packages for stock businesses are readily available, but few address make-to-order complexities. Issues to be addressed include:
1. Reengineering cumbersome business processes and correcting inaccurate data before they are exposed to customers
2. Potential change in value creation for each step in the supply chain
3. Competitive threats, including new supply chain entrants
4. Being rewarded by customers for new services
5. Protecting core competencies and competitive advantages
New business. Business opportunities abound in this space. Could a division be spun off to form a new company? Could joint ventures reduce costs and reduce time to market? Could participation in a virtual marketplace increase revenues? Could investments in Internet startups pay big returns? Or, should the high risk and significant front-end investment compel any organization to carefully consider the risks and rewards before embarking on a new eBusiness initiative?
Technology. The technical architecture must be engineered to support the business objectives. eBusiness systems should reflect a customer and product viewpoint, not the current business organization or legacy system design. Selecting the right combination of eBusiness software products, as they quickly evolve, is difficult. Technology issues include:
1. Providing one set of eBusiness applications that can support multiple business strategies
2. Sourcing eBusiness skills and services internally and externally
3. Adopting document interchange standards
4. Interfacing eBusiness systems with existing order management and accounting systems
5. Selecting either Microsoft or Java as the underlying technology
6. Security, Security, and Security
Once the eBusiness strategy is complete, the corporation must provide for governance, staffing, and funding. Although many technical issues exist, organizational change and business process reengineering is the greatest challenge. Whatever opportunities you choose, customer and supplier involvement can improve your chances for success.
|
