Chapter Twelve
Chapter Twelve
Developing the
e-Business Design:
Strategy Formulation
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Introduction
Introduction
E-business requirement
–
Simultaneous melding of business strategy,
enterprise apps, and technology implementation
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None by itself sufficient
Traditional corporations gullible of the “legacy
effect”
–
Refusal to change can mean stagnation and losing
ability to generate new value through innovation
e-Business not a silver bullet; simply another
technique for reinventing business
–
Intel
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Roadmap to Moving into e-Business
Roadmap to Moving into e-Business
Making e-business a reality involves three key
components:
–
e-Business strategy
•
Figure out why and what of customer value
creation
–
e-Blueprint formulation
•
How and when of customer value creation
–
Tactical execution
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E-Business Strategy Formulation
E-Business Strategy Formulation
In this phase, managers build awareness and
make plan to create new customer value
–
Develop clear vision of what the customer needs
are and what the customer is looking for
–
Be conscious of own abilities and limitation
Includes
–
Knowledge building
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Capability evaluation
–
e-Business design
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The Process of e-Business Strategy
The Process of e-Business Strategy
Formulation
Formulation
Three approaches to e-business strategic plan
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Top-down analytical planning
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Bottom-up tactical planning
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Continuous planning with feedback
Important question to ask
–
What result do I want?
Strategic success dependent on business results you
want, not on what Wall Street thinks
–
Managers are the change agents
Define destination
–
When we are done, my customers will ________
–
When we are done, my employees will________
–
When we are done, my company will_________
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The Process of e-Business Strategy
The Process of e-Business Strategy
Formulation
Formulation
Top-Down Analytical Planning
–
Systematically define a vision of the business’
future to assess cost and prepare capital budget
–
Data-rich environment, numbers driven; Managers
review alternative scenarios to identify most likely
outcome and create strategy based on that
–
Serves well under stable business conditions; e-
world is anything but stable
–
It’s single greatest problem: Separation of strategy
formulation and implementation
•
The never-seen-again strategic plan
•
The no-goals strategic plan
•
The no-feedback strategic plan
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The Process of e-Business Strategy
The Process of e-Business Strategy
Formulation
Formulation
Bottom-Up, “Just Do It” Planning
–
Frontline force taking on new importance in today’s
environment with awareness of changes in customer needs
–
Organizations with hierarchical structures have few
mechanisms in place for ensuring insights of front-line staff
reach strategy makers
–
As a result, bottom-up strategic planning flourishing
–
Managers abandoning analytical rigor of traditional planning
processes and basing decisions on solving immediate needs
–
Downside: Can result in fractured pattern of authority, with
individual managers basing strategic decisions on their
business units’ needs, not needs of the enterprise as a whole