Chapter Four
Thinking E-Business
Design: More Than
Technology
Edited By:-
Ankit Shah
SVBIT,
Gandhinagar
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
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Introduction
e-Business Infostructure
– 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
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3 interlocking layers of e-business
Business Model Scope
E-Business Customer Selection
Value Creation
Design Strategic Control
Organizational Systems
E-Business CRMERP
e-Procurement
Supply Chain
Infrastructure Financials
Business Intelligence
Selling Chain
Portals
Scalability Servers Site Security
E-Business Reliability
Hosting
Databases
Middleware
Data Security
Transaction Security
InfoStructure Storage Routers
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The Race to Create Novel e-Business
Designs
Getting it right the first time very important
– right strategy accelerates market penetration and
minimizes cost
– wrong strategy can cause years of impact
Truly great companies uses three things well
– redefine value for customers
– build powerful e-business designs to outperform
competition
– understand customer priorities
• Success depends on how quickly a company
can formulate novel business designs and
adapt them to its markets
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Four Steps…..
Step 1: Self Diagnosis
Step 2: Reverse the value chain
Step 3: Choose a focus
Step 4: Execute Flawlessly
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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?
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Step 1: Self Diagnosis
Three types of firm:--
1.Innovator or market leader: All answers yes
2.Early adopter or visionary: Most answers yes
3.Silent majority: Few answers yes
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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
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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
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Step 2: Reverse the Value Chain
Traditional Business Design
In-house Rigid
Products/
Core Infrastructure/ Channels Customers
Services
Competencies Processes
e-Business Design
Flexible Outsourced/
Customers Integrated Products/
Infrastructure/ In-house Core
Needs Channels Services
Processes Competencies
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Step 3: Choose a Focus
Service excellence
– Delivering what customers want with hassle-free
service and superior value
Operational excellence
– 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
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Service Excellence
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Service Excellence
Operating principles of service excellence
– gather and maintain all up-to-date, accurate
business and economic information you need,
where and when you need it
– user customer contact mgmt
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Operational Excellence
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Operational Excellence
Involves providing lowest-cost goods and
services possible while simultaneously
minimizing problems for customer
Key principles
– mgmt of efficient transactions
– mgmt of sales intelligence
– dedication to measurement systems
– mgmt of customer expectations
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Continuous-Innovation Excellence
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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 Microsystems and Nike
– Downfall of AT&T, Eastman Kodak, Sears and GM
due to lack of technological innovation
Key principles
– risk-oriented mgmt style
– market-education style
– encouraging innovation
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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?
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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
quality service, esp. its simplicity, flexibility and consistency
Combine detailed customer knowledge with service
flexibility
– CustomExtras enables 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
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Service Excellence at American Express
The Way It Was The New Way
Travel Online
Services Travel
Services
Credit Membership
Integrated Cards Rewards
Financial
Services Financial Life Path
Planning Planning
Banking Private
Banking
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Operational Excellence at Dell
Build-to-order e-business design
– low-cost manufacturing and fast-cycle product
development
Integration of customer demand from the direct-
sales 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 bankrupt because of Dell’s direct
sales model
– CHS Electronics, MicroAge, InaCom
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Dell Online History
Late 1980s 1994 1995 1996 1997 1998
January
Dell launches February $1 Million/day
an FTP site for Marketing
customers to content November
download files added $3 Million/day
to site
July 36 countries
June
Dell starts 200+ Premier Pgs.
www.dell.com selling systems
site launched online 400k users/wk
with technical
80,000 online
support content user sessions Focus efforts
and e-mail per week on Corporate
gateway customer
October March
Configurator Asian/European $4 M/day
generating online Internet site Focus on
quotes is launched value- added
launched 225,000 online services
user sessions per
week
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