1. Customer-Focused e-Business
A key strategy by managers for becoming a successful e-business is to maximize customer value. This strategic focus on customer value recognizes that quality rather than price becomes the primary determinant in a customer’s perception of value. A Customer-Focused e-business, then, is one that uses Internet technologies to keep customer loyal by anticipating their future needs, responding to concerns, and providing top quality customer service.
Such technologies like intranets, the Internet, and extranet websites create new channels for interactive communications within a company, with customers, and with suppliers, business partners, and others in the external business environment. Thereby, encouraging cross-functional collaboration with customers in product development, marketing, delivery, service and technical support.
A successful Customer-Focused e-business attempts to ‘own’ the customer’s total business experience through such approaches as:
- Letting the customer place orders directly, and through distribution partners
- Building a customer database that captures customers’ preferences and profitability, and allowing all employees access to a complete view of each customer.
- Letting customers check order, history and delivery status
- Nurturing an online community of customers, employees, and business partners.
2. The Customer- Focused Agile Competitor
Agility in competitive performance is the ability of a business to prosper in rapidly changing, continually fragmenting global markets for high-quality, high-performance, customer-configured products and services. Agile companies depend heavily on information technology to support and manage business processes. The four fundamental strategies of agile competition are:
Enrich Customers. Agile companies enrich customers with solutions to their problems. Long term value-added products and services succeed when they solve problems based on customer needs. As conditions change, the agile competitor establishes a relationship based on the ability and willingness to change to meet new customer problem situations.
Cooperate. Agile companies cooperate to enhance competitiveness. This means internal cooperation and, where necessary, cooperation with competitors in order to bring products and services to market more quickly.
Organize. Agile companies organize to master change and uncertainty. This is a key component of agile competition because it seeks development of the anticipation and rapid response to changing conditions, not an attempt to stifle change itself.
Leverage People and Information. Agile companies leverage the impact of people and information by nurturing an entrepreneurial spirit and providing incentives to employees to exercise responsibility, adaptability, and innovation.
The Free.Perfect.Now model developed by AVNET Marshall embodies these principles into a succinct model for serving its customers in the most agile and responsive way.
Free Dimension. Emphasizes that most customers want the lower cost for value received, but are willing to pay more for a value-added service.
Perfect Dimension. Emphasizes that products and services should not only be defect free, but should be enhanced by customization, added features and should further anticipate future customer needs.
Now Dimension. Emphasizes that customers want 24×7 accessibility to products and services, short delivery times, and consideration of the time-to-market for their own products.
3. Business Reengineering and Quality Management
One of the most important competitive strategies today is business process reengineering (BPR) most often simply called reengineering. Reengineering is more than automating business processes to make modest improvements in the efficiency of business operations. Reengineering is a fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in cost, quality, speed, and service. BPR combines a strategy of promoting business innovation with a strategy of making major improvements to business processes so that a company can become a much stronger and more successful competitor in the marketplace.
However, while many companies have reported impressive gains, many others have failed to achieve the major improvements they sought through reengineering projects.
Business quality improvement is a less dramatic approach to enhancing business success. One important strategic thrust in this area is called Total Quality Management (TQM). TQM emphasizes quality improvement that focuses on the customer requirements and expectations of products and services. This may involve many features and attributes, such as performance, reliability, durability, responsiveness etc.
TQM uses a variety of tools and methods to provide:
- More appealing, less-variable quality of products or services
- Quicker less-variable turnaround from design to production and distribution
- Greater flexibility in adjusting to customer buying habits and preferences
- Lower costs through rework reductions, and non-value-adding waste elimination.
4. Knowledge Management Systems
Knowledge Management has become one of the major strategic uses of information technology. Knowledge Management Systems (KMS) are systems that are used to manage organizational learning and business know-how. The goal of knowledge management systems is to help knowledge workers create, organize, and make available important business knowledge, whenever, and wherever its needed.
Such knowledge may include explicit knowledge like reference works, formulas, and processes, or tacit knowledge like “best practices”, and fixes. Internet and intranet technologies, along with such other technologies like GroupWare, data mining, and online discussion groups are used by KMS to collect, edit, evaluate and disseminate knowledge within the organization.
Knowledge management systems are sometimes called adaptive learning systems, because they create cycles of organizational learning called adaptive learning loops, which allow the knowledge company to continually build and integrate knowledge into business processes, products, and services. Thereby, helping the company to become a more innovative, agile provider of goods and services.
5. Enterprise Resource Planning
Enterprise resource planning (ERP) is a cross-functional enterprise system that serves as a framework to integrate and automate many of the business processes that must be accomplished within the manufacturing, logistics, distribution, accounting, finance, human resource functions of a business.
ERP software is a family of software modules that supports the business activities involved in these vital back office processes.
ERP is being recognized as a necessary ingredient for the efficiency, agility, and responsiveness to customers and suppliers that an e-business enterprise needs to succeed in the dynamic world of e-commerce.
Companies are finding major business value in installing ERP software in two major ways:
- ERP creates a framework for integrating and improving their back-office systems that results in major improvements in customer service, production, and distribution efficiency.
- ERP provides vital cross-functional business processes and supplier and customer information flows supported by ERO systems.
Read More: Enterprise Resource Planning (ERP)
6. Online Analytical Processing
Online Analytical Processing (OLAP) is a capability of management, decision support, and executive information systems that enables managers and analysts to interactively examine and manipulate large amounts of detailed and consolidated data from many perspectives. Basic analytical operations include:
Consolidation. This involves the aggregation of data. It can be simple roll-ups or complex groupings involving interrelated data. For example, sales offices can be rolled up to districts and districts rolled up to regions.
Drill-Down. OLAP can go in the reverse direction and automatically display detailed data that comprises consolidated data. For example, the sales by individual products or sales reps that make up a region’s sales can be accessed easily.
Slicing and Dicing. This refers to the ability to look at the database from different viewpoints. For example, one slice of a database might show all sales of a product within regions. Another slice might show all sales by sales channel. By allowing rapid alternative perspectives, slicing and dicing allows managers to isolate the information of interest for decision making.
7. Intelligent Agents
An Intelligent Agent (IA) is a software surrogate that fulfills a stated need or activity. The IA uses built-in and learned knowledge about how an end user behaves or in answer to posed questions, to implement a software solution — such as the design of a presentation template or spreadsheet — to solve a specific problem of interest to the end user. IAs can be grouped into two categories for business computing:
User Interface Agents.
- Interface Tutors. These observe computer operations, correct user mistakes, and provide hints and advice on efficient software use.
- Presentation Agents. These show information in a variety of reporting and presentation forms and media based on user preferences.
- Network Navigation Agents. These discover paths to information and provide ways to view information that are preferred by a user.
- Role-Playing Agents. These play what-if games and other roles to help users understand information and make better decisions.
Information Management Agents.
- Search Agents. These help users find files and databases, search for desired information, and suggest and find new types of information products, media, and resources.
- Information Brokers. These provide commercial services to discover and develop information resources that fit the business or personal needs of a user.
- Information Filters. These receive, find, filter, discard, save, forward, and notify users about products received or desired, including E-mail, voice mail, and all other information media.
8. Expert Systems
An Expert System (ES) is a knowledge-based information system that uses its knowledge about a specific, complex application area to act as an expert consultant to end users. The components of an ES include:
Knowledge Base. A knowledge base contains knowledge needed to implement the task. There are two basic types of knowledge:
Factual knowledge. Facts, or descriptive information, about a specific subject area.
Heuristics. A rule of thumb for applying facts and/or making inferences, usually expressed as rules.
Inference Engine. An inference engine provides the ES with its reasoning capabilities. The inference engine processes the knowledge related to a specific problem. It then makes associations and inferences resulting in recommended courses of action.
User Interface. This is the means for user interactions.
To create an expert system a knowledge engineer acquires the task knowledge from the human expert using knowledge acquisition tools. Using an expert system shell, which contains the user interface and inference engine software modules, the KE then encodes the knowledge into the knowledge base. A reiterative approach is used to test and refine the expert system’s knowledge base until it is deemed complete.
9. Managing the IS Function
The IT organization structure has radically changed in the last few years. The shift towards decentralized IS teams and decentralized IS management, evident in the 1980’s and 90’s, has recently been replaced with a return to centralized control and management of IS resources. This has resulted in the development of hybrid organization structures with both centralized and decentralized elements. Some companies have spun-off their IS organizations into subsidiaries or business units. Others have relied on outsourcing IS functions to either application service providers or system integrators. Regardless of these organizational changes, the IS organization function still involves three major components:
- Application Development Management. Involves managing activities such as systems analysis and design, project management, application programming and systems maintenance for all major e-business IT development projects.
- IT Operations Management. Involves the management of hardware and software, network resources. Operational activities that must be managed include computer system operations, network management, production control, and production support. Many of these management activities are automated. For example, system performance monitors monitor the processing of computer jobs and in some cases actually control operations at large data centers. Most system performance monitors supply information needed by chargeback systems. These are systems that allocate costs to users based on the information services rendered.
Human Resource Management. Involves recruiting, training, and retaining qualified IS personnel. Such personnel may include managerial, technical, as well as clerical support staff.