Chapter 20 - Developing A 21st-Century Organization

Semester II 2014
HUTECH JOINT BBA PROGRAM

WITH BRISTOL UNIVERSITY
HUTECH JOINT BBA PROGRAM WITH BRISTOL UNIVERSITY
On the business side, 21st-century organization trends are:
Uncertainty in terms of future business scenarios and economic outlooks.
Emphasis on strategic analysis for cost reduction and productivity enhancements.
Focus on improved business resiliency via the application of enhanced security.
In order to survive in the 21st century, organization must recognize the immense
power of technology, carry out required organizational changes in the face of it, and
learn to operate in an entirely different way
Hows about Vietnam? Why now we have to apply technology to our businesses,
especially in traditional industries like agriculture?
I. Developing Organizations
New trend: focus on improved business management of IT in order to extract the
most value from existing resources and create alignment between business and IT
priorities.
The four primary information technology areas where organizations are focusing
are:
IT infrastructures
Security
E-business
Integration

Examples of How
Technology Is Changing
Business
1.1 Increased Focus On It Infrastructure
A significant trend for the 21st century is to increase the focus on IT infrastructure.
Today, organizations today are looking to Internet-based cross-functional systems such as
CRM, SCM, and ERP to help drive their business success. Creating an effective organization
requires a 360-degree view of all operations.
Ownership of the IT infrastructure now becomes the responsibility of the entire organization
and not just the individual users or functional department.
This is primarily because the IT infrastructure has a dramatic influence on the strategic
capabilities of an organization

The Position of the
Infrastructure within the
Organization
1.2 Increased Focus On Security
Security is a hot topic
Increasingly opening up business networks and applications to customers, partners, and
suppliers using a diverse set of computing devices and network => a lot of potential threats
Businesses can benefit from deploying the latest advances in security technologies.
These benefits include fewer disruptions to organizational systems, increased productivity of
employees, and greater advances in administration, authorization, and authentication
techniques.
For businesses it is important to have the appropriate levels of authentication, access control,
and encryption in place, which help to ensure (1) that only authorized individuals can gain
access to the network, (2) that they have access to only those applications for which they are
entitled, and (3) that they cannot understand or alter information while in transit.
1.3 Increased Focus On Security
Security breaches is not only inconvenience, but can also cost millions of dollars in lost
revenues or lost market capitalization. It can even force a business out of existence within
hours or days of an attack.
It is now more important than ever for an organization to have well-rehearsed and frequently
updated processes and procedures to insure against a variety of adverse scenariosInternet
email and denial-of-service attacks from worms and viruses, loss of communications, loss of
documents, password and information theft, fire, flood, physical attacks on property, and even
terrorist attacks.
1.4 Increased Focus On eBusiness
Mobility and wireless are the new focus in ebusiness, and some upcoming trends are
mobile commerce, telematics, electronic tagging, and RFID.
Mobile commerce (m-commerce)
Telematics: efficiently conveying information over vast networks to improve business
operations. The most notable example of telematics may be the Internet itself.
Electronic tagging a technique for identifying and tracking assets and individuals via
technologies such as radio frequency identification and smart cards.
Radio frequency identification (RFID): RFID can enable greater efficiencies in business
processes such as inventory, logistics, distribution, and asset management.
On the mobile commerce side, RFID can enable new forms of ebusiness through mobile
phones and smart cards. This can increase loyalty by streamlining purchases for the
consumer.
Mobile employees will soon have the ability to leverage technology just as if they were in the
office. Improvements in devices, applications, networks, and standards over the past few years
have made this far more practical than it was when introduced.
Mobile technology will help extend an organization out to its edges in areas such as sales
automation and enterprise operations. Benefits can include improved information accuracy,
reduced costs, increased productivity, increased revenues, and improved customer service.
Mobile business enables an organization to combine of business processes, e business, and
wireless communications
1.5 Increased Focus On Integration
IT has penetrated the heart of organizations and will stay there in the future.
The integration of business and technology has allowed organizations to increase their share
of the global economy, transform the way they conduct business, and become more efficient
and effective
Around the world, free-market competition has flourished and a new globally interdependent
financial system has emerged. Reflecting these changes, core business relationships and
models are dramatically changing, including shifts from:
Product-centricity to customer-centricity.
Mass production to mass customization.
The value in material things to the value of knowledge and intelligence.
A new series of business success factors and challenges has emerged that is helping to
determine marketplace winners and losers:
Organization agility, often supported by a plug and play IT infrastructure (with a flexible and
adaptable applications architecture).
A focus on core competencies and processes.
A redefinition of the value chain.
Instantaneous business response.
The ability to scale resources and infrastructure across geographic boundaries.
The Integration
of Business and
Technology
Figure 20.3
The new environment requires organizations to focus externally on their business
processes and integration architectures. The virtually integrated business model
will cause a sharp increase in the number of business partners and the closeness of
integration between them.
As business strategies continue to evolve, the distinction between the business
and IT will virtually disappear. Why?
1) Wal-Mart got into e-commerce more than a decade ago, but its online
sales came in at $7.7 billion last year, compared with more than $61
billion for Amazon
2) In short, Walmart still badly lags Amazon in eCommerce and they are
playing catch up.
3) Wal-Mart plans to combine its stores, existing distribution centers, and
new facilities into what it calls its next generation fulfillment network
4) At the bottom of the article, is really the heart of a retail strategy known
as Omni-channel Commerce, being implemented by not only Walmart
but by many leading brick and mortar retailers.
Case Study: Amazon Vs. Walmart
1) Omni-channel is an initiative by brick and mortar retailers to better
integrate their stores and e-commerce channels. So a retailer might
support buy online, pick-up at store; or order online, deliver to home
from a store; several other fulfillment paths are also possible.
2) Instead of fulfilling Web orders from warehouses hundreds of miles
from shoppers homes, companies including Wal-Mart, Best Buy and
Gap are routing orders to stores nearby.
3) The trend, known as Ship from Store, saves money through shorter
delivery routes, speeds deliveries, avoids costly markdowns and recoups
sales that have been lost to Amazon.

This ship from store strategy wont be easy.
1) In order to intelligently allocate inventory from stores, retailers need to
implement a distributed order management (DOM) => costly
2) Secondly, retailers need to be able to execute the perfect order from
the store => perfectly done warehouse management systems (WMS), it
means their inventory must be 100% tracked, which is impossible
3) Thirdly, retailers need to take the culture of the perfect order as
practiced in distribution centers, and graft it into the store. This culture
change is likely to be far more difficult than implementing new
technologies
1) Why is it critical that the government develop its IT infrastructure
using a 21st-century strategy?
2) How would the government define security when developing its 21st-
century strategy?
3) How would the government define its e-business infrastructure when
developing its 21stcentury strategy?
4) Why is it important that the government control all integrations into its
systems?
Questions

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Semester II 2014

HUTECH JOINT BBA PROGRAM

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