E-Business Strategy Topic 4: Design and Implementation

Introduction

Krell and Grale (2005) identify the ten most common myths that businesses sometimes believe when migrating to an e-business strategy. They are:

1. e-Business migration is solely a technology issue.
2. It is possible to outsource the entire process.
3. e-Enabled processes can be isolated in the organisation.
4. Current business processes can remain unchanged.
5. The firm's strategies can remain unchanged in the effort (i.e. that the business can continue to sell and service the same products as before in the same way and that there are no changes for value chain partners, customers, operations, etc).
6. e-Business technology can be integrated into the current business without strategic change.
7. e-Business migration does not create organisational change.
8. e-Business migration is a single-pass, sequential process to an implementation goal.
9. e-Business processes can be implemented under the direction of a single individual or department.
10. Implementation of an e-business initiative is done only once.

Systems Design

Zagotta and Robinson (2002) emphasise the message of planning results (Strategic Plan), rather than activities (Project Plan). In sharing the senior management strategic vision, they recommend quantifying the vision so that everyone can see the importance of the initiative with quantified strategic vision metrics.

The first step to establishing a suitable design for the e-business strategy is to establish the design team. To successfully develop the e-business systems design, effective organisations manage a number of issues carefully: the establishment of the design team, leadership, resources, cross-functional integration, deconstruction and reconstruction of the business, and the power of partnerships.

Having considered organisational aspects of migrating to a new e-business strategy, let's turn our attention to architectural foundations. Example:

Strategy: Provide product information and sales order entry capabilities wirelessly to sales staff on customer site. (Value: faster, more accurate orders; JIT orders.)

Architecture: Back office product and ordering systems securely provide information on demand to authorised PDA/phones.

Platforms: SAP ERP Product and Order modules communicate using WAP over GPRS to authorised Palm PDA/Phones.

Infrastructure: Minicomputer hosting SAP; Internet backbone to mobile network; public mobile network; fleet of sales PDA/Phones.

Strategic design and implementation decisions arise from the first two Architecture columns and should be incorporated in the strategic systems design. The more technical and operational design and implementation decisions arise from the Platforms and Infrastructure columns, and while they need to be satisfied, do not form a key part of the strategic systems design. However, where a specific platform or infrastructure element is mandatory and involves a significant degree of risk (e.g. it is a new, unproven technology), this should be noted in the strategic systems design. It is important for managers to integrate different organisational functions wherever possible in a new e-business initiative.

Both within an enterprise, and particularly when two or more enterprises or entities work together, it is likely that disparate information systems will need to work together—when at first they may be incompatible: 'interoperability'. There are two broad approaches:
1. Update the various infrastructures so that they operate on a common platform and are compatible. This can be expensive and take a long time, and may not be commercially viable.
2. Use middleware to provide interoperability between the different systems. Middleware acts as a channel and translation agent to effectively connect otherwise incompatible systems.

Implementation

The executive(s) responsible for the e-business initiative must still require a formal implementation project plan from those who will execute it. The plan will address the standard project management triad of deliverables (or 'scope', both by objective and by infrastructure), time and cost. Significant resources, which may be both internal and external, are required: knowledge, skills, capabilities, technology, finance, leadership, management, time.

The key to starting a successful e-business project is knowing what precisely you're going to develop. Between the broad architecture of application framework and the details of the specific work tasks lies a set of choices the enterprise must make about the overall execution process. This includes
i. Customer blueprint: Specifies the customer problems and issues that the blueprint will address, with what result.
ii. Development blueprint: Defines the types of enterprise framework projects covered by the aggregate e-blueprint: how projects should be sequenced, how work should be organised, how efforts should be led and managed, what milestones should be established, how senior management will interact with the project, and how problems should be framed and solved.
iii. Integration blueprint: Review your portfolio of active projects.

A further element of the blueprint approach is that the blueprints link together (both side- by-side and over time). Organisations with a fixed, single-project approach are more susceptible to: resource competition, resulting in political fights a failure to embrace commonality of purpose and technology across the organisation uncoordinated system designs, with lack of compatibility and standardisation among initiatives inconsistent customer experiences when one common experience would suffice expensive in-house-developed technology serving a single project business processes with essentially the same specifications but subtle differences so they are not reusable.

Small steps with early wins help maintain project momentum and encourage ongoing support from stakeholders. A key to this is, where possible, to conduct pilot tests of new systems. As we just noted, avoid the 'big bang' approach wherever possible—where a legacy system is switched off and a completely new system switched on in its place. The big bang deployment approach is one of the highest risk forms of e-business strategy implementation.

An e-business development initiative requires two forms of control and measurement: one for the project itself, and one for the results of the project—that is, operational use. Standard project management measures should be applied to the project itself, with actual cost and value completed compared with the plan as an absolute minimum. Project management considerations are beyond the scope of this Unit other than to say that performance of the three core elements of a project—time, cost and compliance with specifications—should all be assessed on an ongoing basis during development.

Measures of the operational use of the implemented systems are highly relevant to our strategic considerations, though. The Balanced Scorecard (BSC) approach measures performance from the financial perspective, the customer perspective, the internal business perspective and the innovation and learning perspective.

Risk Management

Risks come in many forms, and they vary with the kind of enterprise operations being upgraded. There are risks at the design stage, which include:
* the design team leader fails to engage stakeholders adequately
* the design phase does not receive executive sponsorship
* insufficient resources are requested, made available, or some are withdrawn (including people)
* the strategic plan is incorrectly translated into design so that key objectives are not met
* significant technical risks are not identified
* necessary changes to enterprise structure or operating procedures are not identified, or not communicated
* project costs are significantly underestimated.

During the implementation stage, all these kinds of risks continue to exist. Some of them— such as technical risks and project costs—are amplified. For example, the requirement to deploy a new technology may bring unforseen problems in integration with existing systems. In addition to this, other implementation risks include:

* The system is deployed in a 'big bang' approach, making many aspects of the enterprise's operations change all at the same time.
* Insufficient attention is given to the cleanup of old data before it is transferred to the new system.
* Insufficient training is given to personnel, suppliers, customer or other people required to use the system, creating frustration and errors.
* Inadequate attention is given to managing suppliers to which part or all of the project has been outsourced.
* The old system is not operated in parallel with the new system, so it is difficult to detect errors. (Operating in parallel is expensive and not always possible, but is a key risk mitigator where it can be used.)
* The new system, as implemented, introduces new unintentional risks to the business.

Implications for Managers

Designing and implementing strategic e-business plans can help an enterprise improve or rebuild its competitive advantage. Design and implementation programs create challenges for the manager, and are best addressed with the following in mind:

Ensure that implementation plans are flexible blueprints, rather than rigid processes, in order to accommodate changes to the technological and business environments during development.

Control and manage risk effectively, including business, financial, developmental, operational, security and technological risks.

Select a leader who can garner support across a wide network and obtain extra resources when required.

Ensure that sufficient quantities of the right kinds of resources are available.

Integrate and deliberately build interoperability across functional areas of the organisation (at least), and with other enterprises and stakeholders where this creates significant new value.

Employ appropriate, broad enterprise architectures to satisfy the strategic objectives.

Ensure that business processes are updated as well as the technology, wherever appropriate.

Assess and consider the cost-effectiveness and practical feasibility of replacing legacy systems outright (and the risks involved), versus updating legacy systems in a series of steps.

Use professional outsourcing management practices where part or all of the development project or operations are to be conducted by a third party.

Designing and implementing strategic e-business plans can help an enterprise improve or rebuild its competitive advantage.

Design and implementation programs create challenges for the manager, and are best addressed with the following in mind:

Ensure that implementation plans are flexible blueprints, rather than rigid processes, in order to accommodate changes to the technological and business environments during development.

Control and manage risk effectively, including business, financial, developmental, operational, security and technological risks.