E- BUSINEES

PROF. AJAY MODY

 WHY ? WHAT ? HOW ?

• WHY?

• IT TAKES FEW MINUTES TO BUY TICKETS

• IT TAKES FEW MINUTES TO CONFIGURE DELL PC AND BUY
• CISCO CAN OVERHAUL ITS PRODUCTS LINE EVERY TWO YEARS
• FED EX and UPS make it easy for CUSTOMER to track package and create airway bills.

• WHAT ?

• MAKES some companies be successful in digital economy

• HOW ?

• COMPANIES set new rules within their industries a new e-business design
• COMPANIES INTEGRATE OPERATIONS TO SUPPORT CHANGING NEEDS OF CUSTOMER REQUIREMENT
• COMPANIES CREATE new kind of application infrastructure and manage the new business design
• COMPANIES SET SHORT AND LONG TERM INVESTMENTS IN PEOPLE ,PARTNERS,TECHNOLOGY to
thrive in the new environment
 Major trends driving E-business
• Trend category • Trend
• Customer • Faster services
• Self service
• More products choice
• Integrated solutions

• • Integrated sales and service

E-service
• Seamless support
• Flexible fulfillment and convenient service delivery
• Increased process visibility

• Organisation • Outsourcing
• Contract manufacturing
• Virtual distribution

• Employee • Hiring the best and the brightest

• Keeping talented employees

• Enterprise technology • Intelligent enterprise application

• Multi channel Integration
• Middleware

• General Technology • Wireless web application

• Handheld computing and information appliances
• Infrastructure convergence
• Application service provider
 TEN RULES OF e-BUSINESS

• RULE 1
• TECHNOLOGY is the cause and driver in forming a business strategy and not the after thought
• RULE 2
• The ability to streamline the structure of information and to influence and control its flow is more powerful
• RULE 3
• Inability to overthrow the dominant ,outdated business design often leads to business failure
• RULE 4
• Using e commerce companies can listen to their customers and become “the cheapest” or “ the Best”
• RULE 5
• Use technology to innovate, entertain and enhance the entire experience surrounding the product: from selecting and ordering to
receiving and service
• RULE 6
• The business of the future increasingly uses reconfigurable e-business to best meet customer’s needs
• RULE 7
• The goal of new business designs is for companies to create flexible outsourcing alliances that not only off-load costs but also make
customers ecstatic
• RULE 8
• For urgent e-business project ,its easy to minimize application infrastructure needs and to focus on the front end applications. This can be
costly in more than one way
• RULE 9
• Planning e-business infrastructure swiftly and implement it ruthlessly is key to success of e-business
• RULE 10
• The tough task for management is to align business strategies ,process and applications quickly ,correctly and all at once. Strong
leadership is imperatively.
 RULE 1
TECHNOLOGY is the cause and driver in forming a business strategy and not the after thought

• Technology change comes in waves and just as the ocean erodes the shores ,so too
technology erodes strategies, causing business models to behave in ways difficult to
predict.
• Re-thinking and re-designing companies business model is the first step to survive
and profit in the e-business era
• Structural changes – are required in tangible assets such as processes and products
and in intangibles such as branding, customer relationship, supplier integration

• E.g : Encyclopedia Britannica coming free

 RULE 2
The ability to streamline the structure of information and to influence and control its flow is
more powerful

• The information surrounding a product or service is more important than the product or service
itself.
• The companies need to change eco system in which they compete
• Most companies have a terrible time to cannibalizing their existing business structure in order to
reallocate assets to compete directly with e-start-ups.
• The companies needs develop an explicit strategy to accommodate the structural transformation
implied by e-commerce revolution

• E.g : Traditional Job- recruitment agency V/s Naukri.com

• Matrimonial agency V/s Bharat Matrimony
 RULE 3
INABILITY to overthrow the dominant ,outdated business design often leads to business failure

• Changes in business design combined with the pressure of time to market and new technology create serious
management challenge
• HOW SHOULD A CO. BE DESIGNED IN ORDER TO HANDLE SERIOUS CHALLENGE PRESENTED BY NEW
COMPETITORS
• DISAGGERATION
• THE VALUE OF ANY BUSINESS IS IN THE NEEDS IT SERVES AND NOT IN THE PRODUCTS IT OFFERS. DISAGGREGATION OF THE
VALUE CHAIN ALLOWS
• FIRM TO SEPARATE THE MEANS OR PRODUCTS FROM THE ENDS OR CUSTOMER NEEDS.
• It requires identifying , valuing and nurturing the true core of the business to satisfy the customer needs through product
and services
• REAGGREGATION
• Successful re aggregated business design depend on a well integrated set of enterprise software application. This killer
applications represents the new technological backbone of the modern corporation and will soon be the standards for
company to compete in the new era. Using technology to re aggregate the value chain is fundamental to the emergence
of the digital economy.
• AMAZON. Has been able to re aggregate better than BARNES and NOBLE
• SIX STEPS for DISAGGERATION and REAGGREGATION
• 1) What is the new industry structure ? Its configuration that challenges traditional definition of value
• 2) What does the digital customer needs ? Customers want value defined in terms of the whole customer
experience and accompanying expectation.
• 3) What are the new economics ? How to convert value creation in to revenue ? How do you engineer the end to
end value stream ?
• 4) How do you reorganize our business ? Create right partnership with suppliers ,customers and shareholders
• 5) Where is the VALUE ? Value is in INTEGRATION . Value is also in creating a new techno enterprise
foundation supportive of customer needs.
• 6) How do we Implement change ? Change is implemented by developing a new generation of leaders who
understand how to create the digital future by carefully designing and not by accident.
 RULE 3 CONT

• CHALLAENGING TRADITIONAL DEFINTION of VALUE

• Customer require the companies to improve in following areas:

• 1) Speed of Service: Premium is placed on instant, accurate and adaptive responsiveness to customer needs

• 2) Convenience : One stop shopping. Better integration along the supply chain

• 3) Personalization : Today’s technology give companies ability to provide product and services precisely as per
specifications of customer

• 4) Price : Companies that offer a unique products and services at a reasonable price are flourishing and
benefiting from a flood of new customers.

• 1960 Thomas S Monaghan founded Dominoz Pizza

 RULE 4
Using e-commerce companies can listen to their customers and become “the cheapest and the best”

• Being the best involves re inventing service process to enhance quality being able to turn the
company without much effort in most profitable direction. Integrating relationship with suppliers
and customers to unprecedented levels of co-operation trust.

• McDonalds : Most familier

• Wal Marts : The cheapest model Everyday low price

• Big Bazaar

• 7 by 11 in JAPAN : 70000 pcs manage the total operation all across JAPAN to satisfy demanding seasonal needs
of customer

• AMZON AND BARNES & NOBLE

• AMAZON and Barnes and Noble Brick and CLICK $ 75 billion world book market with 30 %
international mkt
 Rule 5
Use technology to innovate, entertain and enhance the entire experience surrounding the product:
from selecting and ordering to receiving and service

• Leverage the WEB to re wire the customer experience and change service
expectation.
• Is there an AMAZON that can squeeze margin your business ? YOU CAN CREATE
ONE
• ARE ANY NEW ENTRANT IN YOUR INDUSTRY LEVERAGING THE WEB TO
REWRITE THE CUSTOMER EXPERIENCE AND CHANGE SERVICE EXPERIENCE

• AMAZON.com –unique user experience

• MICROSOFT :Foundation of new value chains is MSN and Re engineering several value chains

• Travel (EXPEDIA), Total business of airline ticketing is $ 100 billion ,Make My trip

• Automotive sales (CarPoint) , Total business of automobile sales is $ 100 billion

• Real Estate ( HomeAdvisor), Total business of airline ticketing is $ 100 billion

• Finance (Investor) E* trade, Sharekhan, One paisa trade

•
 RULE 6
The business of the future increasingly uses reconfigurable e-business to best meet customer’s
needs

• Engineering the end-to -end value stream : e-business webs

• Business Web (BW)
• Reengineering efforts in new era is the emergence of more intricate and committed
relationship among business entities.
• Synergistic clusters ,business ecosystem ,coalition ,co –operative networks or
out sourcing to create end to end value streams in new environment is known as
Business Web (BW)
• Competition is not between companies but between BW.

• BW can play a powerful role in attacking market leaders and new entrants are using
BW to gain access to resources and customers ,technology and products.
• Harvesting the partnership : e-business core competencies: Outsourcing the need for
core competency is answer for e-business which has a lot of dynamism. The new
environment requires finding or development personnel with critical skills for jobs to
be done.
BHARTI front end –WalMart backend support
 Rule 7
The goal of new business designs is for companies to create flexible outsourcing alliances that not
only off-load costs but also make customers ecstatic

• CREATING A NEW TECHNOENTERPRISE:

• Integrate, Integrate, Integrate
• 1) Application integration is a key to e-business
• 2) The functional models can not deliver the demands and dynamism of
customer needs.
• 3) WHAT kind of e-business architecture –vision, strategy, cross-functional
processes ,integrated application and IT infrastructure is needed to support
new way of doing business ? Executives rely on IT managers to give
solutions are clueless .
• The decision to develop an e-business architecture is business and
not a technical decision
 RULE 8
For urgent e-business project ,its easy to minimize application infrastructure needs and to focus on
the front end applications. This can be costly in more than one way

• The e-business infrastructure is costly and most of the aging legacy application
system ,hardware system and network system needs to seamlessly integrate with the
e-business infrastructure.

• ELEMENTS OF E-BUSINESS EXECUTION FRAMEWORK

1) Provide a structure for defining communicating and
monitoring new realities. 2) Redesign core business process to align with the new
organizational vision 3) Enable the IT infrastructure to support change
innovation and business goals

• THE INFRASTRUCTURE DESIGN IS CRUCIAL FOR SCOPING THE FEASIBILITY

AND FOR COMMUNICATING THE PROJECTS GOAL AND OBJECTIVES
 RULE 9
Planning e-business infrastructure swiftly and implement it ruthlessly is key to success of
e-business

• Continued innovation in process is one of the best tools a corporation has for adding
value to its web of suppliers and customers
• Leadership is especially important when future is uncertain, e- business execution
requires commitment from the TOP to happen
• Process innovation has to be coupled with the infrastructure innovation.
• The link between planning and infrastructure should be tighter. Traditional planning
assumes that end goal is a fixed target not a moving one.
 RULE 10
The tough task for management is to align business
strategies ,process and applications quickly ,correctly and
all at once. Strong leadership is imperatively.
 E-business application framework
Business partners
Suppliers, distributors
resellers

Supply chain Management

Finance/ accounting /audit

/Management control
Enterprise resource planning
Administrative control
,HRM/e-procurement

Enterprise
Employees Business application Shareholder
Intelligence Integration

Customer Relationship management

Selling chain management

Customer resellers
 Three layers of E business
Value proposition
E-business Design Customer segments , Customer Priorities
Organization Capabilities
Layer 1

E-business
Infrastructure
CRM, ERP, EAI, Selling Chain, e-procurement,
Layer 2 Financial Control, Business Intelligence, Supply Chain Management

E-business
Info Structure Scalability, reliability, Hosting, Storage, Security,
web servers, Database, Middleware, App Servers ,ASP
Layer 3
 Enterprise application Integration(EAI)

FRONT OFFICE BACK OFFICE

CRM APPL. ERP APPL.

Manufacturing,
Customer Service,
Finance
SFA,
Scheduling,
Product Configuration,
Logistics
Sales Order Entry
 Trend Towards Business Intelligence

Business Analytics
Filtering ,Reporting

Data capture dataware

housing

Business
Decision Support Systems intelligence

Push based
Delivery System

Wireless /Mobile
Communications