Managing E-Business - Concepts and Cases

<<Previous

E-Strategies - Case Studies

In the e-business environment, organizations must focus on their core competencies and should rely on external partners for all their non-core activities. The Internet enables a significant reduction in the cost of inter-organizational coordination and transactions, which fundamentally changes the nature of business relationships and encourages greater use of business partners over internal departments. Business managers have more choice to outsource business processes they require.

 

Another e-SCM initiative, e-sourcing is a cross-functional and cross-enterprise process that aims at optimizing supply chain lifecycle performance through the Internet.

Organizations have to develop new partnerships, create new e-intermediaries (e-supply network) and develop appropriate standards for data exchange and inter-organization related processes. They also have to decide on what services they will source via the Internet and have to develop robust KM systems to improve internal efficiency, enable faster decision-making and facilitate information and knowledge sharing.

E-Strategies have to be developed for the sell side of an organization solving distribution related issues such as shall the organization serve directly to its customers and how will the organization's existing channels react if it uses the web as a new channel. Other sell side issues include how to manage customer relationships online and online marketing and how to use online channels like B2B e-marketplaces, online retailers and virtual distributors. One of the major hurdles to overcome includes solving conflicts between old and new channel successfully.

Getting prices right on the web is one of the critical success factors for establishing an e-business. However, few companies have been able to develop a right online pricing strategy. Organizations must ensure that their e-pricing strategy should not conflict with their core business principles and strategic objectives. They should employ the right software tools and related skills to enhance their online pricing performance. Moreover, the tools for optimizing e-pricing, for example, software for monitoring competitors' prices do not require much investment.

Organizations not only have to redefine their core business processes but non-core processes such as human resources as well to derive the full potential of the Internet. By developing effective Internet-based business-to-employee (B2E) systems, organizations can persuade their employees to embrace change. The benefits of these systems include reduced interaction costs, allowing employee self-service and mass customization.

Online brand management is another issue that must be tackled by organizations. In their rush to establish a presence on the Internet, most organizations have failed to build strong, distinctive online brands. Questions such as if one branch of an organization develops a website, will it not confuse customers of other branches of the company and how to differentiate local and global brands on the Internet has to answered.

After addressing all issues related to electronically enabling the functional areas mentioned above, an organization is ready to manage the execution of its overall e-business strategy. Organizations must also work out detailed estimates of costs involved in implementing its e-business strategy and the time involved for implementation.

To execute e-business strategy successfully, organizations also require the best network and systems management tools available. It is also important to develop a framework for organizational alignment and decision-making and a more complex IT management and governance structure. A clear framework that establishes who can make which decisions, and where and how the e-business project will be managed is required.
 

2004, ICMR Case Studies and Management Resources. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means - electronic or mechanical, without permission.