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obr76817_ch11_446-480.indd Page 446 8/19/10 2:49 PM user-f499 /Volumes/207/MHSF190/keL319951_disk1of1/pagefiles Management Challenges MODULE IV Business Applications Module IV Development Processes Information Technologies Foundation Concepts DEVELOPMENT PROCESSES H W ow can business professionals plan, develop, and implement strategies I and solutions that use information technologies to help meet the L challenges and opportunities faced in today’s business environment? Answering that question is S the goal of the chapters of this module, which concentrate on the processes for planning, developing, and implementing IT-based O business strategies and applications. N • Chapter 11: Developing Business/IT Strategies emphasizes the importance • of the planning process in ,developing IT/business strategies and the implementation challenges that arise when introducing new IT-based business strategies and applications into an organization. Chapter 12: Developing J Business/IT Solutions introduces the traditional, prototyping, and end-user A approaches to the development of information systems and discusses the processes and managerial issues in the implementation of new M business applications of information technology. I E 5 0 5 1 B U 446 obr76817_ch11_446-480.indd Page 447 8/19/10 9:14 PM user-f499 /Volumes/207/MHSF190/keL319951_disk1of1/pagefiles Management Challenges CHAPTER 11 Business Applications Module IV Development Processes Information Technologies Foundation Concepts DEVELOPING BUSINESS/IT STRATEGIES Ch apt er Highligh t s Section I Planning Fundamentals Introduction Organizational Planning The Scenario Approach Real World Case: IT Leaders: IT/Business Alignment Takes on a Whole New Meaning Planning for Competitive Advantage Business Models and Planning Business/IT Architecture Planning Identifying Business/IT Strategies Business Application Planning Section II Implementation Challenges Implementation Implementing Information Technology Real World Case: Centene, Flowserve, and Shaw Industries: Relationships, Collaboration, and Project Success End-User Resistance and Involvement Change Management Real World Case: Forrester, NMSU, Exante Financial Services, and Others: Getting Real about Strategic Planning Real World Case: Blue Cross and Blue Shield, and Others: Understanding the Science behind Change W I L L ea r n i n g O bj ect i v e s S After reading and studying this chapter, you should O be able to: N 1. Discuss the role of planning in the business use of information technology, using the scenario , J A M I E approach, and planning for competitive advantage as examples. 2. Discuss the role of planning and business models in the development of business/IT strategies, architectures, and applications. 3. Identify several change management solutions for end-user resistance to the implementation of new IT-based business strategies and applications. 5 0 5 1 B U 447 obr76817_ch11_446-480.indd Page 448 8/19/10 2:49 PM user-f499 448 ● /Volumes/207/MHSF190/keL319951_disk1of1/pagefiles Module IV / Development Processes SECTION I Introduction Planning Fundamentals Imagine taking a caravan of thousands of people on a journey with no map, no plan, no one in charge, no logistical support, no way to keep everyone informed, no scouting reports to assess and update progress, and no navigational instruments. It would be sheer madness, yet that’s how most companies are handling the transition to e-business. Information technology has created a seismic shift in the way companies do business. Just knowing the importance and structure of e-business is not enough. You need to create and implement an action plan that allows you to make the transition from an old business design to a new e-business design. W some fundamental planning concepts, which is the That is why you need to learn goal of this section. We will first I discuss several strategic planning concepts and then talk more specifically about developing IT-based business strategies and other planL discuss the process of implementing IT-based busining issues. In Section II, we will ness plans and the challengesSthat arise when introducing new IT strategies and applications within a company. Read the Real World Case O on the next page. We can learn a lot about recent trends in business/IT alignment and N the new role of senior IT executives. See Figure 11.1. Organizational Planning The Scenario Approach , Figure 11.2 illustrates the components of an organizational planning process. This fundamental planning process consists of (1) team building, modeling, and consensus; (2) evaluating what an organization J has accomplished and the resources they have acquired; (3) analyzing their business, economic, political, and societal environments; A the impact of future developments; (5) building a (4) anticipating and evaluating shared vision and deciding on M what goals they want to achieve; and (6) deciding which actions to take to achieve their goals. I what we call a plan, which formally articulates the acThe result of this process is tions we feel are necessary to E achieve our goals. Thus, a plan is an action statement. Plans lead to actions, actions produce results, and part of planning is learning from results. In this context, the planning process is followed by implementation, which is monitored by control measures, 5 which provide feedback for planning. Strategic planning deals with the development of an organization’s mission, goals, 0 strategies, and policies. Corporations may begin the process by developing a shared vision using a variety of techniques, 5 including team building, scenario modeling, and consensus-creating exercises. Team planning sessions frequently include answering 1 strategic visioning questions such as those shown in Figure 11.3. Tactical planning involves the setting of objectivesBand the development of procedures, rules, schedules, and budgets. Operational planning U is done on a short-term basis to implement and control day-to-day operations. Typical examples are project planning and production scheduling. Many organizational planning methodologies are used in business today. In this section, let’s concentrate on two of the most popular methodologies: the scenario approach and planning for competitive advantage. Planning and budgeting processes are notorious for their rigidity and irrelevance to management action. Strict adherence to a process of rapid or efficient completion may only make the process less relevant to the true management agenda. Managers and planners continually try different approaches to make planning easier, more accurate, and more relevant to the dynamic, real world of business. obr76817_ch11_446-480.indd Page 449 8/19/10 2:49 PM user-f499 /Volumes/207/MHSF190/keL319951_disk1of1/pagefiles Chapter 11 / Developing Business/IT Strategies ● REAL WORLD CASE C 1 IT Leaders: IT/Business Alignment Takes on a Whole New Meaning IOs thought they knew what business-IT alignment was. But fighting the dark forces of recession has really taught the lesson—to some of them, anyway. At a truly aligned company with all cylinders firing, every executive, every manager, every employee works on one goal: winning customers. In the past, CIOs saw their role as, say, installing business intelligence tools so that the marketing group could analyze customer data, or upgrading enterprise resource planning software for the supply chain guys to improve order fulfillment. Vital work, of course, but inwardly focused and a few steps removed from living, breathing, money-spending customers. But now, as shown in the 2010 State of the CIO survey by CIO Magazine, top technology executives increasingly see bringing home the bacon as their job, too. Nearly one third—30 percent—of the IT leaders polled say meeting or beating business goals is a personal leadership competency critically needed by their organizations, up significantly from the 18 percent who said so one year ago. Eighteen percent also named “external customer focus” as a critical skill, double 2009’s 9 percent. Double. Meanwhile, 22 percent cited “identifying and seizing on commercial opportunities”—up more than triple from the year before. Yes, triple. It’s clear that the recession has deepened CIOs’ understanding of and commitment to business beyond IT. CIOs are interacting with customers directly and working side by side with product engineers to build IT into new goods and services. “In so many of the products offered now, the differentiating component is the IT capability,” says Drew Martin, CIO of Sony Electronics. Certain Sony televisions, for example, F IGUR E 11.1 CIOs are increasingly turning their attention to customers and new product opportunities. Source: © Punchstock. 449 W I L S O N , J A M I E 5 0 5 1 B U can stream movies wirelessly, one of several products and features that Sony’s IT group itself helped make possible. CIOs should get their IT departments involved in product development—if IT can truly step up. “You have to have an awareness of where your business is trying to go,” he says. “Then you have to make sure you have the capability to support that.” “At Konica Minolta USA, the IT group also influences what the company sells,” says Nelson Lin, CIO of the U.S. unit that is part of the $9.7 billion Konica Minolta Holdings in Japan. For example, Konica Minolta printers, measurement devices, and medical tools contain enough computer technology that when they break or get replaced, customers must dispose of them carefully to avoid environmental hazards. Lin saw end-of-life equipment disposal as a service that customers would pay for. Lin and other senior executives view Konica Minolta as an advanced technology company and through that prism, he says, the CIO’s input becomes even more valuable. He stepped up to lead discussion of equipment disposal as a money-maker. “I’m doing it for our own e-waste already. It’s now a matter of doing this large scale,” he says. “It’s the right thing to do, everyone knows. But it could be revenue for us, too.” Denise Coyne, CIO of Chevron’s corporate departments and services companies, was previously CIO of the oil and gas giant’s marketing group as well as manager of 200 Chevron gas stations. She would go to conventions to talk up the company’s point-of-sale system with gas station operators. “I found out what they wanted,” she says. Her MBA and nine years in marketing have shaped how she approaches IT, she says, assessing projects from finance and business perspectives, for example. Patti Reilly White has been with Darden Restaurants for 20 years, 10 of them as CIO. IT has “always” been customerfocused at Darden, she insists, but the past two years have been particularly intense. Projects in development include a system to text customers when their tables are ready, doing away with the flashing-light buzzers that restaurant greeters now hand out to waiting diners. “What our guests want is for us to value their time and personalize the experience for them. We in IT try to find ways to do that,” Reilly White says. Some CIOs even run businesses themselves. In addition to overseeing internal IT for the $3.6 billion Nasdaq OMX Group, executive vice president and CIO Anna Ewing runs Market Technology, a division that sells Nasdaq’s technology to financial exchanges around the world. The unit brought in $359 million in contracts in 2008, for everything from advisory services (helping customers set up various kinds of exchanges) to trading, clearing, and post-trade systems. Before coming to Nasdaq in 2000, Ewing didn’t have profit-and-loss responsibility in her previous positions at CIBC World Markets or at Merrill Lynch. But at those obr76817_ch11_446-480.indd Page 450 8/19/10 2:49 PM user-f499 450 ● /Volumes/207/MHSF190/keL319951_disk1of1/pagefiles Module IV / Development Processes companies, she chose a commercial direction as much as she could: At CIBC, she was a founding member of the financial services company’s e-commerce site. Among several positions at Merrill, she led client technology. She was named Nasdaq’s CIO in 2005. At Nasdaq, Ewing and her team recently launched a free iPhone application for checking stock quotes as a way to experiment with hot new consumer technology and seed the ground for some revenue-generating app in the future. The app debuted on a Friday. By Tuesday, without advertising, the stock-checker was the fifth most downloaded free financial app at Apple’s site. “We wanted to see if the appetite was there,” Ewing says. “It is.” A CIO’s ability to spot new business opportunities comes from thinking like a CEO, she says. “Product development and technology go hand-in-hand.” Still, most CIOs have no P&L duties. That’s a mistake, says Bill Deam, CIO of Quintiles Transnational, a $2.7 billion medical research company. Starting in 2007, most of Quintiles’ top executives, including the COO, the head of corporate development and Deam himself, were assigned one key customer account. Deam says he tries to cultivate good relations with senior managers at his assignment, a $15 billion biotech and pharmaceuticals firm. Quintiles helps the biotech firm conduct clinical trials for medicines in development. Deam reviews the account with an executive at the customer company every Friday and visits every six months. He hopes his efforts not only produce closer ties but also more business between the two companies. But that takes time. “They want to make sure that all the work we do for them is performed excellently, without issues,” Deam says. “Then we can go to the next phase of the relationship; this is very much about the business side,” he says. For example, Quintiles would like to sell customers on the idea of outsourcing their technology infrastructures, Deam says, and he sees a pivotal role for himself in that strategic sales process. “My job is to make sure senior executives feel comfortable enough to talk to each other.” Doing sales calls is a relatively simple way for a CIO to learn about customers. The CIO’s presence also adds weight to what the salesmen claim. Having a CIO on a sales call CASE STUDY QUESTIONS 1. How does the job of the CIO change with the assumption of customer responsibilities? Do you agree with this new development. Why or why not? 2. Why would there be internal resistance to CIOs becoming more externally customer-focused than they were before? Does this present a threat to executives in other areas of a company? 3. How do companies benefit from having their CIO meet customers and generally become more involved with product development? What can companies do now that was not possible before? Provide a few examples. isn’t uncommon, but it’s especially important now when so many products and services rely on IT, says Hilton Sturisky, senior vice president for information and communication technology with the $14 billion BCD Travel. BCD manages travel for big companies whose employees use BCD’s web technologies to, for instance, book flights and hotels. Special services, such as tools for analyzing your company’s travel data for ways to cut costs, are also available. When Sturisky went out with BCD’s sales team recently, it wasn’t so much to contribute but to listen, he says. BCD hasn’t yet won the contract; sales cycles are 9 to 12 months in the travel services industry, he says. But he thinks that being there made a difference. “There was appreciation that we take a collective approach to serving customers and that added credibility to what the sales professionals were saying,” he says. As a result of those conversations, Sturisky is considering how to provide such new services as sending notifications of W canceled flights to travelers’ smart phones, along with alterI native itineraries. CIOs who want to focus on external customers may have Lto deal with internal resistance. The way to overcome that, says Coyne of Chevron, is to be visible. S When she is trying to change how people work, for examOple, she meets in person as much as possible with colleagues Nabove and below her. At “Dining with Denise” lunches, she talks with lower-level employees about corporate change. At , meetings once or twice a year with Chevron’s senior-most executives, she explains the value of IT. In between there are monthly meetings with departments and governance boards. JAll the while, it’s her voice, her face out there. “Blogs, e-mail, town halls, dining. The objective for me is to continuously Aremind everyone of the bigger picture.” M Reilly White, too, is aware of her visibility at Darden and tries to use it as a tool. When restaurant operations I crews see IT managers and staff in kitchens and dining they know Reilly White takes their partnership seriErooms, ously. If you’re not “out there” she says, you risk not understanding what your business needs. 5Source: Adapted from Kim S. Nash, “2010 State of the CIO: Today’s Focus 0for IT Departments—Business Opportunities,” CIO.com, December 17, 2009. 5 REAL WORLD ACTIVITIES 1 B1. The IT function is notorious for being dynamic, and its U leaders are no exception. Go online to research recent trends affecting the traditional roles of senior IT executives and how those roles are changing. Prepare a presentation to share your findings with the rest of the class. 2. “In the future, the prevalence of IT in product offerings will blur the distinction between IT and other areas of the company, to the extent that the IT function will cease to exist as a separate entity.” Do you agree with this statement? Why? Break into small groups with your classmates to see if you can reach a consensus on the issue. obr76817_ch11_446-480.indd Page 451 8/19/10 2:49 PM user-f499 /Volumes/207/MHSF190/keL319951_disk1of1/pagefiles Chapter 11 / Developing Business/IT Strategies ● F IGUR E 11.2 451 The components of an organizational planning process. Articulate the Organization’s Plan Analyze the Organization’s Environment Forecast Internal and External Developments Team Building, Modeling, and Consensus Evaluate Accomplishments and Resources Establish Vision Mission Goals Objectives Develop Strategies Policies Tactics Develop W Implementation Methods and I Controls L Feedback S O to planning has gained in popularity as a less formal, but The scenario approachN more realistic, strategic planning methodology for use by business professionals. , teams of managers and other planners participate in what In the scenario approach, management author Peter Senge calls microworld, or virtual world, exercises. A microworld is a simulation exercise that is a microcosm of the real world. In a microworld J create, experience, and evaluate a variety of scenarios of exercise, managers can safely what might be happening, or Awhat might happen in the real world. When a work team goes white-water rafting or engages in some other outdoor team-building M exercise, the team members are creating a microworld to reflect on and improve the way they I staff create a role-playing exercise to be used in a supervisory work together. When personnel training, they are creating E a microworld. Many team retreats serve as microworlds. Thus, in the scenario approach to strategic IS planning, teams of business and IS managers create and evaluate a variety of business scenarios. For example, they make 5 assumptions about what a business will be like three to five years or more into the future, 0 technology can or will play in those future scenarios. and the role that information F IGUR E 11.3 5 1 in planning for e-business initiatives. Examples of strategic visioning questions B Strategic Business Visioning U • Understanding the Customer Who are our customers? How are our customers’ priorities shifting? Who should be our target customers? How will an e-business help reach our target customer segments? • Customer Value How can we add value for the customer with e-business services? How can we become the customer’s first choice? • Competition Who are our real competitors? What is our toughest competitor’s business model? What are they doing in e-business and e-commerce? Are our competitors potential partners, suppliers, or customers in an e-business venture? • Value Chain How would we design a value chain if we were just starting an e-business? Who would be our supply chain partners? What roles should we play: e-commerce Web site, B2C portal, B2B marketplace, or partner in an e-commerce alliance? obr76817_ch11_446-480.indd Page 452 8/19/10 2:49 PM user-f499 452 ● /Volumes/207/MHSF190/keL319951_disk1of1/pagefiles Module IV / Development Processes FIGURE 11.4 Converging business, political, and technological trends that are shaping strategic business/IT planning. Technology • • • • • Deregulation Electronic Commerce Customer Information Technology “Death of Distance” Digital Everything, Technology Convergence Information Content of Products and Services Increasing Steadily Competitive Imperatives • • • • Converging Trends • Imperatives: - Real Growth - Globalization - Customer Orientation - Knowledge and Capability as Key Assets - New Entrants • Enablers: - Alliances - Outsourcing Regulated Markets Opening Up Fewer Regulatory Impediments in Business Single Currency Zones Regulators Outflanked by Changing Boundaries and Unstoppable Forces (Internet and e-Business) Customer Sophistication/ Expectations • • • • • • • Demand for Better and More Convenient Solutions Increased Emphasis on Service Demand for Added Value Less Tolerance for Poor Standards Just-in-Time Delivery Global Influences Brand “Savvy” W I L S Alternative scenarios are created by the teams or by business simulation software, Odevelopments, trends, and environmental factors, inbased on combining a variety of cluding political, social, business, N and technological changes that might occur. For example, Figure 11.4 outlines key business, political, and technological trends that , could help guide business/IT planning. Risk Assessment and Mitigation J CIOs are frequently asked, “What are our IT risks?” Unfortunately, this question is too generic because there are A multiple kinds of risk. Before starting any risk assessment, IT needs to understandM both the concern prompting the request and which risks need to be assessed. Moreover, everyone needs to understand that nearly all I affect the entire business. Risks fall into four catrisks that affect an IT organization egories that require different mitigation tools: E Business operations risk. An assessment determines the risks involved in addressing or ignoring a particular competitive threat. Analyzing competitive threats helps the company decide whether 5 to invest the resources necessary to combat the threat. Determining appropriate responses to competitive threats from nontradi0 tional sources can be particularly difficult. The appropriate mitigation tool is a good business case that evaluates all 5 associated risks. For new business opportunities, a thorough risk assessment may be as important to success as accurate financial 1 projections. B or existing programs, management concerns focus Program risk. For approved on whether the program or project U will be delivered on time, within budget, and with high quality. Effective project management and regular monitoring mitigate risk. Business interruption risk. This type of risk affects the company’s ability to continue operating under difficult circumstances. Scenarios run the gamut from a failed server to a destroyed building. In most cases, a failed server causes minor problems for certain people. In contrast, a destroyed building can bring all company operations to a halt. A continuity-of-operations plan that describes how the business will function in the event of various difficulties mitigates risk. Market risk. This category is divided into geopolitical and industry-specific risks. Geopolitical risks include war, terrorism, and epidemics, as well as nationalization and import restrictions. These risks vary depending on the country, the complexity of the corporate supply chain, and the importance of the industry to political leadership. Industry-specific risks also vary. Scenario planning mitigates risk by developing responses obr76817_ch11_446-480.indd Page 453 8/19/10 9:14 PM user-f499 /Volumes/207/MHSF190/keL319951_disk1of1/pagefiles Chapter 11 / Developing Business/IT Strategies ● 453 to various unlikely events. Most important, it attempts to discover previously unknown risks because the most dangerous risk is often the one you don’t identify. Before embarking on any risk assessment, clarify which types of risk are of concern to your executive management; then select the appropriate mitigation tools to address potential difficulties. Depending on the financial consequences, risk insurance may be warranted. Thorough risk assessments leverage creative thinking into constructive preparations for addressing potential threats, and they’re essential to success. As the old adage goes, “Forewarned is forearmed.” Source: Adapted from Bart Perkins, “Know Which Risks Matter,” Computerworld, December 17, 2007. Planning for Competitive Advantage Betting on new IT innovations can mean betting the future of the company. Leadingedge firms are sometimes said to be on the “bleeding edge.” Almost any business executive is aware of disastrous projects W that had to be written off, often after large cost overruns, because the promised new system just did not work. I L information technology environment. So, strategic tive business arena and complex business/IT planning involves S an evaluation of the potential benefits and risks a company faces when using IT-based strategies and technologies for competitive advanO a model of competitive forces (competitors, customers, tage. In Chapter 2, we introduced suppliers, new entrants, andNsubstitutes) and competitive strategies (cost leadership, differentiation, growth, innovation, and alliances), as well as a value chain model of basic , business activities. These models can be used in a strategic planning process to help Planning for competitive advantage is especially important in today’s competi- generate ideas for the strategic use of information technologies to support new e-business initiatives. J Also popular in strategic business/IT planning is the use of a strategic opportunities A potential of proposed business/IT opportunities, as matrix to evaluate the strategic measured by their risk/payoff M probabilities. See Figure 11.5. SWOT Analysis SWOT analysis (strengths, weaknesses, opportunities, and threats) is used to evaluate I the impact that each possible strategic opportunity can have on a company and its use EA company’s strengths are its core competencies and of information technology. resources in which it is one of the market or industry leaders. Weaknesses are areas of substandard business performance compared to others in the industry or market 5 segments. Opportunities are the potential for new business markets or innovative 0 expand present markets. Threats are the potential for breakthroughs that might greatly F IGUR E 11.5 A strategic opportunities matrix helps to evaluate the strategic risk/payoff potential of proposed business/IT opportunities. High 5 1 B High Risk U High Payoff Opportunities High Success High Payoff Opportunities High Risk Low Payoff Opportunities Safe but Low Payoff Opportunities Strategic Business Potential Low Low High Firm’s Ability to Deliver with IT obr76817_ch11_446-480.indd Page 454 8/19/10 2:49 PM user-f499 454 ● /Volumes/207/MHSF190/keL319951_disk1of1/pagefiles Module IV / Development Processes TABLE 11.1 Example of a SWOT Analysis by a Human Resources Consulting Firm Strengths Weaknesses Opportunities Threats Market reputation Shortage of trained consultants at the operating level Well-established market niche Large consultancies operating at a minor market level Partner-level expertise in HRM Lack of ability to manage multidisciplinary assignments New market opportunities for consulting in areas other than HRM Many small consultancies looking to invade the marketplace business and market losses posed by the actions of competitors and other competitive forces, changes in government policies, disruptive new technologies, and so on. An example of SWOT analysis might come from a marketing problem. In competitor analysis, marketers build detailed profiles of each competitor in the market, W competitive strengths and weaknesses. Marketing focusing especially on their relative managers may examine each competitor’s cost structure; sources of profits, resources, I and competencies; competitive positioning and product differentiation; degree of verL tical integration; historical responses to industry developments; and other factors. Marketing management often finds it necessary to invest in research to collect the S data required to perform accurate marketing analysis. As such, they often conduct O market research to obtain this information; although marketers use a variety of techN methods include: niques, some of the more common • • • • • , such as focus groups. Qualitative marketing research, Quantitative marketing research, such as statistical surveys. Experimental techniques, such J as test markets. Observational techniques, such as ethnographic (on-site) observation. A Marketing managers may also design and oversee various environmental scanning Mprocesses to help identify trends and inform the and competitive intelligence company’s marketing analysis. I Table 11.1 shows the contentEof a typical SWOT analysis. Now let’s look at a real-world example of how a company used technology to support SWOT analyses, and much more. Bristow Helicopters: TechnologySupported SWOT, and Much More 5 When Bristow Helicopters Ltd. started losing market share in the 1990s, executives 0 moved to improve business processes across the Redhill, England-based company. “We needed to change facilities and maintenance processes, improve the efficiencies 5 of the staff, improve the interface between sales and clients,” says John Cloggie, 1 technical director at the European business unit of Houston-based Bristow Group Inc., which provides helicopterBservices to the oil and gas industry. A key goal of this reengineering U effort was to cut several million dollars from the operating budget of Bristow Helicopters. The company managed the project using MindGenius, “mind-mapping” software from East Kilbride, Scotland-based Gael Ltd. The product enabled it to conduct a SWOT analysis (an assessment of its strengths, weaknesses, opportunities, and threats), carve out various process reengineering tasks, and delegate them to appropriate groups. Each team then took the high-level version of the map and created its own subcategories, tasks, and deadlines for its designated work segment. Since beginning the project in 2004, says Cloggie, the company has managed to cut $6 million from its operating budget. “Mind mapping, of course, didn’t directly create our $6 million savings, but it did allow us to control the project while it was being delivered,” he says. “The speed with which you can map processes and capture knowledge is a huge return.” obr76817_ch11_446-480.indd Page 455 8/19/10 2:49 PM user-f499 /Volumes/207/MHSF190/keL319951_disk1of1/pagefiles Chapter 11 / Developing Business/IT Strategies ● 455 Mind mapping has been around for centuries, but it didn’t garner much attention until psychologist Tony Buzan began to promote information visualization techniques in the 1970s. A mind map is a diagram that radially arranges words and images around a central theme. It’s based on the cognitive theory that many people learn and recall information more easily through graphical representations. Mind mapping—increasingly called business mapping as it makes inroads into corporate settings—is used for a range of problem-solving and brainstorming activities, including managing projects, mapping business processes, creating workflows, planning events, and programming software. At Bristow Helicopters, mind mapping is used for “virtually all business strategy projects,” says Cloggie. Bristow has also used MindGenius for managing employeeretention efforts, and the company always uses it when introducing new aircraft types. “We have a [mind map] template that’s 90 percent usable for any aircraft type. It’s not just a checklist; it’s a tool to help the engineer understand the processes by which he’ll bring the aircraft in,” says W Cloggie. “Through it, he understands the interface with manufacturing, among different departments within the company, and with the Civil I Aviation Authority.” As key business strategies L are developed around mind maps, the technology will need to move beyond its status as a desktop product to better facilitate collaboration, S recently invited, along with other mind-map software say users. In fact, Cloggie was users from various industries, O to speak on this need before the Scottish Parliament. “We talked about the need to take mind maps from being a personal tool to a cross-departmental businessNtool; you can’t extract their true, cross business abilities if you can’t work on maps simultaneously,” says Cloggie. “With real-time collabora, tion, you can have experts develop templates and facilitators work with different teams to create maps, with the business as a whole sharing them.” J A M “Business model” was one of the great buzzwords of the Internet boom, routinely invoked, I as the writer Michael Lewis put it, “to invoke all manner of half-baked plans.” A good E business model, however, remains essential to every successful organization, whether it’s a Source: Adapted from Kym Gilhooly, “Business on the Map,” Computerworld, July 3, 2006. Business Models and Planning new venture or an established player. A business model is a conceptual framework that expresses the underlying eco5 nomic logic and system that prove how a business can deliver value to customers at an 0 appropriate cost and make money. A business model answers vital questions about the fundamental components of5a business, such as: Who are our customers? What do our customers value? How much will it cost to deliver that value to our customers? How 1 do we make money in this business? A business model specifies B what value to offer customers, which customers should receive this value, which products and services will be supplied, and what the price will be. It also specifies how the U business will organize and operate to have the capability to provide this value and sustain any advantage from providing this value to its customers. Figure 11.6 outlines more specific questions about the components of a business that all business models must answer. Figure 11.7 lists questions that illustrate the essential components of e-business models. A business model is a valuable planning tool because it focuses attention on how all the essential components of a business fit into a complete system. Done properly, it forces entrepreneurs and managers to think rigorously and systemically about the value and viability of the business initiatives they are planning. Then the strategic planning process can be used to develop unique business strategies that capitalize on a firm’s business model to help it gain competitive advantages in its industry and the markets it wants to dominate. obr76817_ch11_446-480.indd Page 456 8/19/10 2:49 PM user-f499 456 ● /Volumes/207/MHSF190/keL319951_disk1of1/pagefiles Module IV / Development Processes F IGU RE 11.6 Questions that illustrate the components of all business models. A good business model effectively answers these questions. Component of Business Model Questions for All Business Models Customer value Is the firm offering its customers something distinctive or at a lower cost than its competitors? Scope To which customers (demographic and geographic) is the firm offering this value? What is the range of products/services offered that embody this value? Pricing How does the firm price the value? Revenue source Where do the dollars come from? Who pays for what value and when? What are the margins in each market and what drives them? What drives value in eachsource? Connected activities What set of activities does the firm have to perform to offer this value and when? How connected (in cross section and time) are these activities? Implementation Capabilities Sustainability F IGU RE 11.7 Questions that illustrate the components of e-business models that can be developed as part of the strategic business/IT planning process. Component of Business Model Customer value WhatW organizational structure, systems, people, and environment does the firm need to carry out these activities? What is I the fit between them? WhatLare the firm’s capabilities and capabilities gaps that need to beS filled? How does a firm fill these capabilities gaps? Is there something distinctive about these capabilities that allows the firm to offer O the value better than other firms and that makes them difficult to imitate? What are the sources of these capabilities? N What is it about the firm that makes it difficult for other firms to imitate , it? How does the firm keep making money? How does the firm sustain its competitive advantage? J A Specific to Questions e-Business Models M What is it about Internet technologies that allows your firm to offer Iits customers something distinctive? Can Internet technologiesE allow you to solve a new set of problems for customers? Scope What is the scope of customers that Internet technologies enable your firm to reach? Does the Internet alter the product or service 5 mix that embodies the firm’s products? Pricing How0 does the Internet make pricing different? Revenue source Are revenue sources different with the Internet? What is new? Connected activities How many new activities must be performed as a result of the 1 How much better can Internet technologies help you Internet? to perform existing activities? Implementation How do Internet technologies affect the strategy, structure, U people, and environment of your firm? systems, Capabilities What new capabilities do you need? What is the impact of Internet technologies on existing capabilities? Sustainability Do Internet technologies make sustainability easier or more difficult? How can your firm take advantage of it? 5 B Iridium Satellite: Finding the Right Business Model Left for dead by many observers in the IT and telecommunications worlds just a few years ago, the reborn Iridium Satellite LLC, which provides satellite-based communications services, is showing new signs of life. Nowhere near the revenue and customer numbers posted by huge wireless telecommunications companies such as obr76817_ch11_446-480.indd Page 457 8/19/10 2:49 PM user-f499 /Volumes/207/MHSF190/keL319951_disk1of1/pagefiles Chapter 11 / Developing Business/IT Strategies ● 457 Verizon Wireless and AT&T, it’s definite progress for a company that was brought out of bankruptcy in 2000 and remodeled with a new focus and direction. The first Iridium marketed itself as a consumer satellite telephone service, but its original phone was too bulky and its service too expensive for general adoption. There were also some service quirks consumers wouldn’t accept, such as the need for line-of-sight connection to a satellite, which precluded using the phones indoors. After the buyout, the company recreated itself as a telecommunications provider that could offer reliable service in remote areas where cellular phones and landlines won’t work, such as barren deserts, the Earth’s poles, deep wilderness, disaster areas, and other isolated and harsh environments. “Originally Iridium was focused on the wrong business, on the mass-market consumer business selling directly to customers,” says Matt Desch, the company’s CEO and chairman. Since its rebirth in 2001, the company has worked with more than 150 partner companies to find new business uses and niches for Iridium service in industries from mining to W manufacturing to oil and gas exploration to forestry to emergency response needs. “We’ve developed an ecosystem around ourselves,” I Desch said. “That’s a big difference.” Not all of Iridium’s service L is provided using handsets. An increasing part of its business is in machine-to-machine communications, using a sensor device about the S that is attached to a ship, truck, container, or similar size of a deck of playing cards item. The device can send and O receive short bursts of communications data to a satellite wherever it is on Earth. Some of these sensors are even located on buoys in the N can monitor wave heights, winds, and other storm ocean, where weather agencies data in real time to provide,warnings for onrushing storms. “That’s the real fast part of our growth,” Desch said of the short-burst data communications segment. Max Engel, an analyst with Frost & Sullivan in Palo Alto, California, said that although Iridium’s original J idea to be a satellite phone service for the masses “was an obvious example of stupid failure,” the change in business plan raises the service’s A prospects. “What the new management did when they bought it was it took the asM but were now freed of those expectations,” Engel sets that originally cost billions, said. “They then asked, ‘what I can we do with this’ and enlisted many partners” to create a more workable business model. “Yes, they’re very nichy, but as long as you’ve got bunches of niches, who E cares?” says Engel. “They’ve redesigned their business to suit their assets instead of creating an asset to do business.” “We’re obviously hitting our stride,” says Desch. “We’re a lifeline where no other 5 device can be used.” 0 5 1 B Figure 11.8 illustrates the business/IT planning process, which focuses on discovering innovative approaches to satisfying a company’s customer value and business value U Source: Adapted from Todd Weiss, “Defying Naysayers, Iridium Satellite Finds a Business Model,” Computerworld, July 27, 2007. Business/IT Architecture Planning goals. This planning process leads to development of strategies and business models for new e-business and e-commerce platforms, processes, products, and services. Then a company can develop IT strategies and an IT architecture that supports building and implementing its newly planned business applications. Both the CEO and the chief information officer (CIO) of a company must manage the development of complementary business and IT strategies to meet its customer value and business value vision. This coadaptation process is necessary because, as we have seen so often in this text, information technologies are a fast-changing but vital component in many strategic business initiatives. The business/IT planning process has three major components: • Strategic Development. Developing business strategies that support a company’s business vision, for example, using information technology to create innovative obr76817_ch11_446-480.indd Page 458 8/19/10 2:49 PM user-f499 458 ● /Volumes/207/MHSF190/keL319951_disk1of1/pagefiles Module IV / Development Processes F IGU RE 11.8 The business/IT planning process emphasizes a customer and business value focus for developing business strategies and models, and an IT architecture for business applications. Key Insights Customer and Business Value Visioning Key Objectives Business Strategies and Models Priorities Business/IT Strategies and Architecture Business Application Development and Deployment W I More Questions Feedback Feedback L S e-business systems that focus on customer and business value. We will discuss this O process in more detail shortly. strategic plans for managing or outsourcN • Resource Management. Developing ing a company’s IT resources, including IS personnel, hardware, software, data, , and network resources. • Technology Architecture. Making strategic IT choices that reflect an information technology architecture J designed to support a company’s e-business and other business/IT initiatives. A Information Technology Architecture The information technology architecture that is created by the strategic business/IT M planning process is a conceptual design, or blueprint, that includes the following I major components: E Internet, intranets, extranets, and other networks, • Technology Platform. The • • • Balanced Scorecard computer systems, system software, and integrated enterprise application software provide a computing and communications infrastructure, or platform, that 5 information technology for e-business, e-commerce, supports the strategic use of and other business/IT applications. 0 Data Resources. Many types of operational and specialized databases, including 5 data warehouses and Internet/intranet databases (as reviewed in Chapter 5) store 1 and provide data and information for business processes and decision support. Applications Architecture B. Business applications of information technology are designed as an integrated architecture of enterprise systems that support strategic U business initiatives, as well as cross-functional business processes. For example, an applications architecture should include support for developing and maintaining interenterprise supply chain applications, as well as integrated enterprise resource planning and customer relationship management applications as we discussed in Chapter 8. IT Organization. The organizational structure of the IS function within a company and the distribution of IS specialists are designed to meet the changing strategies of a business. The form of the IT organization depends on the managerial philosophy and business/IT strategies formulated during the strategic planning process. We will discuss the IT organization in Chapter 14. In 1992, Robert S. Kaplan and David Norton introduced the balanced scorecard (BSC), a method for measuring a company’s activities in terms of its vision and strategies. obr76817_ch11_446-480.indd Page 459 8/19/10 2:49 PM user-f499 /Volumes/207/MHSF190/keL319951_disk1of1/pagefiles Chapter 11 / Developing Business/IT Strategies ● 459 It gives managers a comprehensive view of the performance of a business and has become a popular business and IT planning tool. BSC is a strategic management system that forces managers to focus on the important performance metrics that drive success. It balances a financial perspective with customer, internal process, and learning and growth perspectives. The system consists of four processes: (1) translating the vision into operational goals; (2) communicating the vision and linking it to individual performance; (3) business planning; (4) feedback and learning, and then adjusting the strategy accordingly. The scorecard seeks to measure a business from the following perspectives: • Financial Perspective. This measures reflecting financial performance; for example, number of debtors, cash flow, or return on investment. The financial performance of an organization is fundamental to its success. Even nonprofit organizations must make the books balance. Financial figures suffer from two major drawbacks: º They tell us what has happened to the organization historically, but they may not tell us what is currently Whappening or be a good indicator of future performance. º It is common for theI current market value of an organization to exceed the market value of its assets. Tobin’s q measures the ratio of the value of a comL value. The excess value can be thought of as intanpany’s assets to its market gible assets. These figures S are not measured by normal financial reporting. . This measures having a direct impact on customers; for • Customer PerspectiveO • • example, time taken to process a phone call, results of customer surveys, number N rankings. of complaints, or competitive Business Process Perspective . This measures reflecting the performance of key , business processes; for example, time spent prospecting, number of units that required rework, or process cost. Learning and GrowthJPerspective. This measures describing the company’s learning curve; for example, A number of employee suggestions or total hours spent on staff training. M The balanced scorecard approach is not without its detractors, however. A major critI icism of the balanced scorecard is that the scores are not based on any proven economic or financial theory and have no basis in the decision sciences. The process is E entirely subjective and makes no provision to assess quantities like risk and economic value in a way that is actuarially or economically well-founded. The BSC does not provide a bottom-line score5or a unified view with clear recommendations; rather, it is only a list of metrics. Positive responses from users of BSC may merely be a type of 0 placebo effect, as there are no empirical studies linking the use of balanced scorecard to better decision making or 5improved financial performance of companies. Despite these criticisms, BSC can be found in many organizations and is a common 1 strategic planning tool. Figure 11.9 shows an example of a balanced scorecard analysis. Identifying Business/IT Strategies B Companies need a strategicUframework that can bridge the gap between simply connecting to the Internet and harnessing its power for competitive advantage. The most valuable Internet applications allow companies to transcend communication barriers and establish connections that will enhance productivity, stimulate innovative development, and improve customer relations. Internet technologies and e-business and e-commerce applications can be used strategically for competitive advantage, as this text repeatedly demonstrates. However, in order to optimize this strategic impact, a company must continually assess the strategic value of such applications. Figure 11.10 is a strategic positioning matrix that can help a company identify where to concentrate its strategic use of Internet technologies to gain a competitive advantage. Let’s take a look at the strategies that each quadrant of this matrix represents. obr76817_ch11_446-480.indd Page 460 8/19/10 2:49 PM user-f499 460 ● /Volumes/207/MHSF190/keL319951_disk1of1/pagefiles Module IV / Development Processes F IGU RE 11.9 An example of a balanced scorecard analysis. W I L S O N Source: Courtesy of Steelwedge Software, Inc. , • Cost and Efficiency Improvements. This quadrant represents a low amount of internal company, customer, and competitor connectivity and use of IT via the J Internet and other networks. One recommended strategy would be to focus on improving efficiency and lowering costs by using the Internet and the World A Wide Web as a fast, low-cost way to communicate and interact with customers, M suppliers, and business partners. The use of e-mail, chat systems, discussion I site are typical examples. groups, and a company Web E F IGU RE 11.10 External Drivers A strategic positioning matrix helps a company optimize the strategic impact of Internet technologies for e-business and e-commerce applications. Customer connectivity/competition/technology HIGH LOW 5 0 Global Market 5 Penetration 1 B U Cost and Efficiency Improvements Product and Service Transformation Performance Improvement in Business Effectiveness e-business processes/collaboration/cost containment Internal Drivers HIGH obr76817_ch11_446-480.indd Page 461 8/19/10 2:49 PM user-f499 /Volumes/207/MHSF190/keL319951_disk1of1/pagefiles Chapter 11 / Developing Business/IT Strategies ● 461 • Performance Improvement in Business Effectiveness. Here a company has a • • e-Business Strategy Examples high degree of internal connectivity and pressures to improve its business processes substantially, but external connectivity by customers and competitors is still low. A strategy of making major improvements in business effectiveness is recommended. For example, widespread internal use of Internet-based technologies like intranets and extranets can substantially improve information sharing and collaboration within the business and with its trading partners. Global Market Penetration. A company that enters this quadrant of the matrix must capitalize on a high degree of customer and competitor connectivity and use of IT. Developing e-business and e-commerce applications to optimize interaction with customers and build market share is recommended. For example, e-commerce Web sites with value-added information services and extensive online customer support would be one way to implement such a strategy. Product and Service Transformation. Here a company and its customers, suppliers, and competitors are extensively networked. Internet-based technologies, W including e-commerce Web sites and e-business intranets and extranets, must I now be implemented throughout the company’s operations and business relationships. This enables a company to develop and deploy new Internet-based prodL ucts and services that strategically reposition it in the marketplace. Using the Stransaction processing with customers at company Web Internet for e-commerce sites and e-commerce auctions and exchanges for suppliers are typical examples O of such strategic e-business applications. Let’s look at more specific examples. N , Use the Internet to define a new market by identifying a unique Market creator. customer need. This model requires you to be among the first to market and to remain ahead of competition J by continuously innovating. Examples: Amazon.com and E*TRADE. A . Use the Internet as a new channel to access customers, Channel reconfiguration make sales, and fulfill orders Mdirectly. This model supplements, rather than replaces, physical distribution and marketing channels. Example: Cisco and Dell. I . Use the Internet to process purchases. This transacTransaction intermediary tional model includes the end-to-end process of searching, comparing, selecting, and E paying online. Examples: Microsoft Expedia and eBay. Infomediary. Use the Internet to reduce the search cost. Offer the customer a unified process for collecting 5 information necessary to make a large purchase. Examples: HomeAdvisor and Auto-By-Tel. 0 Self-service innovator. Use the Internet to provide a comprehensive suite of services that the customer’s 5 employees can use directly. Self-service affords employees a direct, personalized relationship. Examples: Employease and Healtheon. 1 Supply chain innovator. Use the Internet to streamline the interactions among B to improve operating efficiency. Examples: McKesson all parties in the supply chain and Ingram Micro. U Channel mastery. Use the Internet as a sales and service channel. This model supplements, rather than replaces, the existing physical business offices and call centers. Example: Charles Schwab. Source: Adapted from Joan Magretta, “Why Business Models Matter,” Harvard Business Review, May 2002. Business Application Planning The business application planning process begins after the strategic phase of business/ IT planning has occurred. Figure 11.11 shows that the application planning process includes the evaluation of proposals made by the IT management of a company for using information technology to accomplish the strategic business priorities developed earlier in the planning process, as was illustrated in Figure 11.8. Then, company obr76817_ch11_446-480.indd Page 462 8/19/10 2:49 PM user-f499 462 ● /Volumes/207/MHSF190/keL319951_disk1of1/pagefiles Module IV / Development Processes F IGU RE 11.11 Key Objectives A business application planning process includes consideration of IT proposals for addressing the strategic business priorities of a company and planning for application development and implementation. IT Proposals for Addressing Strategic Business Priorities Action Plan Business Case for Investing in e-Business Projects Planning for Application Development and Implementation Feedback Avnet Marshall: e-Business Planning Feedback W I executives and business unit managers evaluate the business case for investing in proposed e-business development projects based on the strategic business priorities that they L decide are most desirable or necessary at that point in time. Finally, business application S implementing business applications of IT, as well as planning involves developing and managing their development projects. We will cover the application development and O implementation process in Chapter 12. Now, let’s examine a real world example. N , Figure 11.12 outlines Avnet Marshall’s planning process for e-business initiatives and compares it to conventional IT planning approaches. Avnet Marshall weaves both e-business and IT strategic planning J together coadaptively under the guidance of the CEO and the CIO, instead of developing IT strategy by just tracking and supporting business strategies. Avnet Marshall also A locates IT application development projects within the business units that are involved M in an e-business initiative to form centers of business/IT expertise throughout the company. Finally, Avnet Marshall uses an application developI ment process with rapid deployment of e-business applications, instead of a traditional systems development approach.E This application development strategy trades the risk of implementing incomplete applications with the benefits of gaining competitive advantages from early deployment of e-business services to employees, customers, and other 5 in the fine-tuning phase of application development. stakeholders. It also involves them 0 5 1 Conventional IT Planning B • Strategic alignment: IT U • Strategic improvisation: IT strategy and enterprise business strategy coadaptively unfold based on the clear guidance of a focus on customer value • CEO endorses IT vision shaped through CIO • CEO proactively shapes IT vision jointly with CIO as part of e-business strategy • IT application development projects functionally organized as technological solutions to business issues • IT application development projects co-located with e-business initiatives to form centers of IT-intensive business expertise • Phased application development based on learning from pilot projects • Perpetual application development based on continuous learning from rapid deployment with incomplete functionality and end-user involvement Source: Adapted from Omar El Sawy, Arvind Malhotra, Sanjay Gosain and Kerry Young, “IT-Intensive Value Innovation in the Electronic Economy: Insights from Marshall Industries,” MIS Quarterly, December 1997. F IGU RE 11.12 Comparing conventional and e-business strategic and application planning approaches. strategy tracks specified enterprise strategy Avnet Marshall’s e-Business Planning obr76817_ch11_446-480.indd Page 463 8/19/10 2:49 PM user-f499 /Volumes/207/MHSF190/keL319951_disk1of1/pagefiles Chapter 11 / Developing Business/IT Strategies ● 463 F IGUR E 11.13 E-business architecture planning integrates business strategy development and business process engineering to produce e-business and e-commerce applications using the resources of the IT architecture, component development technologies, and a repository of business models and application components. e-Business Strategies Strengths, Weaknesses, Opportunities, Threats GOALS, REQUIREMENTS, CONSTRAINTS e-Business Processes Repository Business Models Internal and Interenterprise ORGANIZATIONAL, PROCESS, and DATA MODELS W Application Components e-Business Application Architecture I e-Business, e-Commerce L COMPONENT-BASED APPLICATIONS S O N Technology Infrastructure IT Architecture , COMPONENT DEVELOPMENT METHOD Source: Adapted from Peter Fingar, Harsha Kumar, and Tarun Sharma, Enterprise E-Commerce: The Software Component Breakthrough for Business to Business Commerce (Tampa, FL: Meghan-Kiffer Press, 2000), p. 68. Business/IT Architecture Planning J A M Another way to look at the business/IT planning process, which is growing in acceptance and use in industry,I is shown in Figure 11.13. E-business architecture planning combines contemporary strategic planning methods (for example, SWOT analysis E and alternative planning scenarios) with more recent business modeling and application development methodologies (for example, component-based development). As illustrated in Figure 11.13 5, strategic e-business initiatives, including strategic goals, constraints, and requirements, are developed based on SWOT analysis and other 0 developers then use business process engineering planning methods. Application methods to define how strategic 5 business requirements are to be implemented; they use organizational, process, and data models to create new internal and inter1 among a company’s customers, suppliers, and other enterprise e-business processes business partners. B Component-based e-business and e-commerce applications are then developed to U implement the new business processes using application software and data components stored in a repository of reusable business models and application components. Of course, the business process engineering and component-based application development activities are supported by a company’s technology infrastructure; this includes all the resources of its IT architecture, as well as the necessary component development technologies. So, e-business architecture planning links strategy development to business modeling and component development methodologies in order to produce the strategic e-business applications needed by a company. obr76817_ch11_446-480.indd Page 464 8/19/10 2:49 PM user-f499 464 ● /Volumes/207/MHSF190/keL319951_disk1of1/pagefiles Module IV / Development Processes SECTION II Implementation Implementation Challenges Many companies plan really well, yet few translate strategy into action, even though senior management consistently identifies e-business as an area of great opportunity and one in which the company needs stronger capabilities. Implementation is an important managerial responsibility. Implementation is doing what you planned to do. You can view implementation as a process that carries out the plans for changes in business/IT strategies and applications that were developed in the planning process we covered in Section I. Read the Real World Case on the next page. We can learn a lot from this case about some of the ways companies can bring everybody involved in a project onto the same page. See Figure 11.14. W Implementing Information Technology I Moving to an e-business environment involves a major organizational change. For many large, global companies, becoming an e-business is the fourth or fifth major organizational L change they have undergone since the early 1980s. Many companies have gone through one S reengineering (BPR); installation and major upgrades of or more rounds of business process an ERP system; upgrading legacy O systems to be Y2K compliant; creating shared service centers; implementing just-in-time ( JIT) manufacturing; automating the sales force; contract manufacturing; and the majorNchallenges related to the introduction of euro currency. , Implementation of new e-business strategies and applications is only the latest catalyst for major organizational changes enabled by information technology. Figure 11.15 illustrates the impact and the levels and scope of business changes that applications of informaJ tion technology introduce into an organization. For example, implementing an application such as online transaction processing A brings efficiency to single-function or core business processes. Yet, implementing e-business applications such as enterprise resource manageM ment or customer relationship management requires a reengineering of core business I chain partners, thus forcing a company to model and processes internally and with supply implement business practices byEleading firms in their industry. Of course, any major new business initiatives can enable a company to redefine its core lines of business and precipitate dramatic changes within the entire interenterprise value chain of a business. As we will see in this section, 5 implementing new business/IT strategies requires managing the effects of major changes in key organizational dimensions such as business processes, organizational0structures, managerial roles, employee work assignments, and stakeholder relationships that arise from the deployment of new business 5 information systems. For example, Figure 11.16 emphasizes the variety and extent of 1 companies that developed and implemented new enthe challenges reported by 100 terprise information portals and B ERP systems. End-User Resistance and Involvement Any new way of doing things U generates some resistance from the people affected. For example, the implementation of new work support technologies can generate employees’ fear and resistance to change. Let’s look at a real-world example that demonstrates the challenges of implementing major business/IT strategies and applications, the change management challenges that confront management. Customer relationship management (CRM) is a prime example of a key e-business application for many companies today. It is designed to implement a business strategy of using IT to support a total customer care focus for all areas of a company. Yet CRM projects have a history of a high rate of failure in meeting their objectives. For example, according to a report from Meta Group, a staggering 55 percent to 75 percent of CRM projects fail to meet their objectives, often as a result of sales-force automation problems and “unaddressed cultural issues”—sales staffs that are often resistant to, or even fearful of, using CRM systems. obr76817_ch11_446-480.indd Page 465 8/19/10 2:49 PM user-f499 /Volumes/207/MHSF190/keL319951_disk1of1/pagefiles Chapter 11 / Developing Business/IT Strategies ● REAL WORLD CASE M 2 Centene, Flowserve, and Shaw Industries: Relationships, Collaboration, and Project Success anaged care provider Centene has just finished deploying a new financial system. CIO Don Imholz says the project, which involved multiple PeopleSoft modules as well as financial planning and reporting software from Hyperion, was completed “very quickly”— in 12 months—and on budget. Imholz believes the project was successful for a number of reasons, including that the company implemented proven technology and hired a systems integrator to help who was experienced with PeopleSoft. Most importantly, Imholz says the project was successful because of “good teaming between the IT organization, the finance organization and the systems integration resources.” In other words, much of the project’s success came down to people skills. The constructive relationship between IT and finance— and in particular, between Imholz and Centene’s CFO, William Scheffel—ultimately kept the project on track when the going got tough. And it did get tough. For example, at one point, the project team was having trouble setting up the technical environment needed to deploy a Hyperion module that a third-party was going to host. The difficulties that IT encountered put the project’s schedule at risk, says Imholz. Had the relationship between IT and finance been acrimonious, the organizations would have pointed fingers at each other—a counterproductive move that would have further delayed the project. Instead, says Imholz, they worked together to recover the lost time and keep the implementation on schedule. “We could have blamed each other and told each other we can’t help,” says the CIO. “But there’s no value in doing that. It delays getting to the solution. If IT or finance tried F IGUR E 11.14 Fostering relationships between IT and business partners has a major impact on project success. Source: © Manchan/Getty Images. 465 W I L S O N , J A M I E 5 0 5 1 B U to recover the schedule alone it wouldn’t have happened. We had to do it together.” Good relationships—between IT and business partners, project managers and IT staff, and project managers and stakeholders—keep IT projects on track, say IT leaders and project management experts. Bad relationships, however, are a leading cause of project failure. Faced with mounting operational and regulatory pressures, Linda Jojo, Flowserve’s CIO, knew it was time to simplify the company’s entire IT infrastructure—an endeavor that would bring about sweeping changes across an enterprise spanning more than 56 countries. At Flowserve, a world leader in the supplying of pumps, valves, seals, automation, and services to the power, oil, gas, chemical, and other industries, Jojo’s assignment was heavy on IT change as the company sought to update processes and systems: establishing a common IT infrastructure, introducing global help desk capabilities, and cutting dozens of disparate ERP systems. But that didn’t stop her from taking a decidedly business approach to simplifying Flowserve’s IT footprint. “The first step was making sure that this wasn’t viewed as an IT project,” says Jojo. “From our CEO, our leadership team and our board of directors on down, we’ve made sure that this project is something we talk about in terms of its business impact.” It’s a tactic that helped set the scope for a project that could have otherwise become unwieldy. For starters, Jojo helped assemble 35 divisional representatives from across the globe at the company’s world headquarters. Here, holed up in a conference room for 17 weeks, these divisional representatives pored over disparate systems and processes, deciding what was—and wasn’t—worthy of improvement. Throughout this period, Flowserve also called on internal subject-matter experts, from engineers to sales representatives, to offer their in-the-trenches take on the company’s shortcomings. The result: a blueprint for business standards, the design of a common financial chart of accounts, and the creation of a set of data standards for customers and suppliers. In addition to creating project perimeters, Jojo says that by involving business leaders in the critical design phase, she was able to garner widespread support for a companywide strategic business initiative costing more than $60 million over four years. “I’ve seen projects that should have been successful fail purely because of relationship issues,” says Greg Livingston, director of IS planning and system development at Shaw Industries, a flooring manufacturer. On the other hand, when mutual trust exists between IT project managers and stakeholders, “IT project managers are more likely to discuss problems that could threaten the project as they arise,” says Imholz. If bad blood exists between the two groups, project managers may not be inclined to point out those issues, or they may try to cover them up. obr76817_ch11_446-480.indd Page 466 8/19/10 2:50 PM user-f499 466 ● /Volumes/207/MHSF190/keL319951_disk1of1/pagefiles Module IV / Development Processes “If you look at projects that fail, invariably someone on those projects knew things were going bad,” says Imholz. “If you don’t have relationships and trust, those things don’t surface. And when you don’t do something about problems in a timely manner, those problems invariably get bigger. In many cases, minor problems become more serious because they’re not addressed in a timely manner. A culture of openness is absolutely essential to good project performance.” Furthermore, when something does go wrong with a project, business partners are less likely to place the sole blame for them on IT if they respect IT, says Shaw Industries’s Livingston. In fact, they’re more likely to give IT some leeway with the project schedule, he says. “It doesn’t matter what technology you’re using, how talented your technology staff is and how knowledgeable the business partners are on process and business improvement: Every system initiative will have issues,” says Livingston. “If you don’t have a relationship, you resort to pointing fingers as opposed to being transparent and admitting ‘we messed up’ or ‘we didn’t test that as well.’ If you have a good relationship, you’ll sit down and find a way to make it work.” Decisions affecting the project also get made more promptly when everyone involved gets along. “Fast and good decisions are crucial to keeping projects on track,” says Imholz. “The failure of senior people to make decisions means decisions are made at lower levels of the organization. If you have a software developer who’s waiting for a decision on a business requirement, there’s three things that can happen: He can guess what to do and guess right. He can wait for a decision and while he’s waiting he’s not as productive. Third, he can guess and guess wrong. If those are equal possibilities, two-thirds of the time it will be detrimental to the project. And if you stack enough of those decisions on top of each other, it will negatively impact the project.” Despite the positive impact good relationships have on project management, IT project managers rely more heavily on software and methodologies than on building relations when they need to improve their delivery. It’s no wonder: Compared with the time it takes to build relationships, software seems like a quick fix. IT project managers are also most comfortable with tools. CASE STUDY QUESTIONS 1. Why do you think the practices described in the case led to success for these companies? 2. How do they change the structure of projects so that the likelihood of a positive outcome increases? 3. In the case of Shaw Industries, how did Scrum help? 4. Provide three specific examples from the case, and explain where and how those activities helped the company move their projects along. 5. Using examples from the case and your own understanding of how those worked, can you distill a set of recommendations that companies should follow when managing technology-based projects? Would these be universal, or would you add any limitations to their applicability? Shaw Industries’s Livingston is using Scrum, an agile software development practice, to improve relationships between IT and business partners and ensure project success. With Scrum, says Livingston, business partners meet with IT during a four- to eight-hour planning meeting to look at all the projects in the backlog and to jointly determine which one will bring the greatest value to Shaw Industries. IT then divides the project into sprints—30-day increments of work. When IT completes a sprint, business partners assess IT’s progress and suggest any necessary changes. “The agile development methodology, just by design, promotes better relationships,” says Livingston. “Scrum and Agile force interaction on a more frequent basis. By doing so, IT delivers solutions on an incremental basis to the business, as opposed to the waterfall method, where it’s a year and a half before the business sees the fruits of an initiative.” Livingston says it’s not necessary for IT and other busiW ness functions to get along swimmingly for Agile to work I effectively. Agile can work even if there’s initial tension bethe groups, he says. “We’ve had groups with troubled Ltween relationships, and certainly initial meetings are not always Seffective out of the gate,” he says. “But at least we can agree that we’re going to focus on 15 key items in the next 30 days, Oand at the end of the 30 days, we’ll get back to you.” N The process forces IT and business partners to prioritize projects together and agree on the 15 items IT will complete , in 30 days. Scrum also then drives IT’s behavior. At the end of that 30 days, IT has to show something for its work. Scrum makes IT accountable to the business. J When business partners see IT making tangible progress every 30 days, their confidence in IT grows. Says Livingston, A“If the business partner sees results more frequently than they Mused to, relationships can get better. Agile promotes better relationships just by forcing a process, forcing interaction.” I Between the structure that Scrum imposes and the relationthat grow out of it, project delivery improves. Livingston Eships says Shaw Industries is seeing this happen: “Better collaboration results in better value for the business,” he says. 5Source: Adapted from Meridith Levinson, “Project Management: How IT and Business Relationships Shape Success,” CIO.com, September 16, 2009; 0and Cindy Waxer, “Using IT to Transform the Business: Three Keys to Success,” CIO.com, August 6, 2007. 5 1 REAL WORLD ACTIVITIES B U1. The Scrum approach to project management has become quite popular in recent years. Go online and research other companies that are using it to organize their projects. Have those experiences been positive as well? What can you tell about how the approach works from your research? Prepare a report to summarize your findings. 2. Would the issues discussed in the case be solved by making a business executive the head of any projects involving IT? Why or why not? Break into small groups with your classmates and develop a justification for both alternatives. obr76817_ch11_446-480.indd Page 467 8/19/10 2:50 PM user-f499 /Volumes/207/MHSF190/keL319951_disk1of1/pagefiles Chapter 11 / Developing Business/IT Strategies ● F IGUR E 11.15 467 The impact and the levels and scope of business change introduced by implementations of information technology. Levels of Change Redefine Core Business New Business Initiatives Best Practices Process Reengineering Model Best Practices Improve Efficiency Efficiency Single Function Core Processes Supply Chain Extended Value Chain W I of Business Change Scope Source: Adapted from Craig Fellenstein and Ron Wood, Exploring E-Commerce, Global E-Business and E-Societies (Upper Saddle River, L NJ: Prentice Hall, 2000), p. 97. S O F IGUR E 11.16 Intranet Enterprise Enterprise Resource N The 10 greatest challenges Portal Challenges Planning Challenges of developing and • Security, security, security, • Getting end-user buy-in implementing intranet enterprise portals and enterprise resource planning systems reported by 100 companies. Société de Transport de Montréal: Smooth Ride after a Bumpy Start • Defining the scope and purpose of the portal • • • • • • • • Finding the time and the money J A Ensuring consistent data quality Getting employees to useM it I Organizing the data Finding technical expertise E Integrating the pieces Making it easy to use • • • • Scheduling/planning • • • • • Changing culture/mind-sets Integrating legacy systems/data Getting management buy-in Dealing with multiple/international sites and partners IT training Getting, keeping IT staff Moving to a new platform 5 Providing all users with access Performance/system upgrades 0 5 1 Suburban sprawl might make a great business case for a transit agency, but when it B came to servers, Canada’s Société de Transport de Montréal (STM) drew the line. Mike Stefanakis, senior systems engineer at STM, says that the main reason he U started looking at virtualization technology was to prevent server sprawl. He wanted consolidation, particularly for development servers at the agency, which provides more than 360 million bus and metro rides each year. “We crunched the numbers and realized that our growth was going to cause a few problems in the near future,” he says. If things kept going as they had, the agency would need an additional 20 to 30 servers each year, on top of its existing base of 180 primarily Wintel machines. “Too many servers were going to be needed to feed the needs of our users and clients,” Stefanakis says. But even though staffers were convinced of virtualization’s benefits pretty early on, the agency’s end users didn’t necessarily feel the same way. Several factors contributed to the initial resistance. For starters, there was a fear of the unknown. There were obr76817_ch11_446-480.indd Page 468 8/19/10 2:50 PM user-f499 468 ● /Volumes/207/MHSF190/keL319951_disk1of1/pagefiles Module IV / Development Processes questions like “How stable is this new technology?” and “What do you mean I will be sharing my resources with other servers?” Potential users thought the new technology might slow them down. To help users get over their fears, Stefanakis focused on giving people the information they needed, while explaining the advantages of the new technology. Among them: great response time for business applications and baked-in disaster recovery. If anything does fail, restoration is just a quickly restored image away. Stefanakis and his staff kept “talking up” the technology and its benefits. “Virtualization came up in every budget, strategy and development meeting we had,” he recalls. “We made sure the information was conveyed to the proper people so that everyone in our department knew that virtualization was coming.” STM has been staging production servers in its virtual environment since December 2005. The first virtual machine was staged in STM’s testing center as a means of quickly recovering a downed production server. Once the first few applications were implemented, userW resistance quickly became history. “After people see the advantages, stability and performance available to them on a virtual platform, I they previously may have had. The psychological they tend to lose any inhibitions barrier for virtualization has been L broken,” Stefanakis says, “and now users will ask for a new server as if they are ordering a coffee and danish.” S O N , Source: Adapted from Mary Ryan Garcia, “After Bumpy Start, Transit Agency Finds Virtualization a Smooth Ride,” Computerworld, March 8, 2007. One of the keys to solving problems of end-user resistance to new information technologies is proper education and training. Even more important is end-user involvement in organizationalJchanges and in the development of new information systems. Organizations have a variety of strategies to help manage business change, and one basic requirement is A the involvement and commitment of top management and all business stakeholders affected by the planning processes that we described in M Section I. I Direct end-user participation in business planning, as well as application developE is implemented, is especially important in reducing ment projects before a new system the potential for end-user resistance. That’s why end users frequently are members of systems development teams or do their own development work. Such involvement 5 ownership of a system and that its design meets helps ensure that end users assume their needs. Systems that tend0to inconvenience or frustrate users cannot be effective systems, no matter how technically elegant they are and how efficiently they process 5 illustrates some of the major obstacles to knowledge data. For example, Figure 11.17 management systems in business. 1 Notice that end-user resistance to sharing knowledge is the biggest obstacle to the implementation of knowledge management applications. B that spotlights end-user resistance and what one Let’s look at a real-world example company did about it. U F IGU RE 11.17 Obstacles to knowledge management systems. Note that end-user resistance to knowledge sharing is the biggest obstacle. 3% 9% 15% User resistance to sharing knowledge Immaturity of technology Immaturity of knowledge management industry 53% 20% Cost Lack of need obr76817_ch11_446-480.indd Page 469 8/19/10 2:50 PM user-f499 /Volumes/207/MHSF190/keL319951_disk1of1/pagefiles Chapter 11 / Developing Business/IT Strategies ● United Maintenance: Solving User Resistance with Understanding 469 Roberto Amores had just about had enough. It was a blistering hot day, and the struggling air-conditioning system had just blown the fuses in the Atlanta office building where Amores was working as a heating ventilation and air-conditioning technician for United Maintenance. But the biggest problem for Amores wasn’t the heat or the fuses, it was the new handheld that his company had given him to replace the paper and clipboard that he had used to keep track of his work. No matter what Amores tried, he couldn’t seem to pick up a signal and make the new computer work. He climbed down from the roof, where he was working, and got in his truck. Nothing. He tried driving around the block. Nothing. On his first day using wireless, it took Amores three hours to pick up a signal, get his service call, and fill out the report. One problem was that the pop-up window kept asking him if he wanted to do things that he didn’t want to do. He tried to remember what he had been told in the training class, and he just became more confused. Amores was hardly alone. Most of the 30 technicians W whom United Maintenance had outfitted with handhelds were struggling with questions like exactly what to enter when the real reason they wanted to put a job onIhold was not among those listed on the scrolling screen. Ralph Hawkins, the serviceL manager at United Maintenance, heard the grumbling of his technicians and got to work on a solution. S employees objected to an automatic time-stamping of In one case, for example, all messages because it made O them feel like their computers were constantly monitoring them. United Maintenance changed the function so that it allowed the technicians to enter the time thatN a message was received or an action taken. “You can go to all the training classes you want, but what really works is just get, ting used to it,” Amores says “Once you figure out what it does, it gets a lot easier.” Today, the technicians at United Maintenance use the handhelds to record everyJ calls are dispatched through the handhelds, service thing they do in the field. Service is recorded, and technicians make sure that the customers sign the machine at the A completion of the call. As soon as the signature is captured, the call is taken off the dispatch screen and a bill isM automatically printed. The new wireless system I has reduced the billing cycle at United Maintenance from two to three weeks to two to three days. It also ensures the company that the technicians have filled out E their paperwork and saves the technicians the time they used to spend bringing their records into the office. “Our guys were hesitant at first,” says Hawkins. “It was harder for the older guys; they balked at it but finally 5 got the hang of it—that part was tough.” 0 5 1 Figure 11.18 illustrates some B of the key dimensions of change management and the level of difficulty and business impact involved. Notice some of the people, process, U in the implementation of business/IT strategies and and technology factors involved Source: Adapted from Danielle Dunne, “Problem: User Resistance to Change—Solution: Patience and Compromise,” CIO.com, February 15, 2002. Change Management applications, or other changes caused by introducing new information technologies into a company. Some of the technical factors listed, such as systems integrators and outsourcing, will be discussed in more detail in the next few chapters. For example, systems integrators are consulting firms or other outside contractors who may be paid to assume the responsibility for developing and implementing a new e-business application, including designing and leading its change management activities. In addition, notice that people factors have the highest level of difficulty and longest time to resolve of any dimension of change management. Thus, people are a major focus of organizational change management. This includes activities such as developing innovative ways to measure, motivate, and reward performance. It is important to design programs to recruit and train employees in the core obr76817_ch11_446-480.indd Page 470 8/19/10 2:50 PM user-f499 470 ● /Volumes/207/MHSF190/keL319951_disk1of1/pagefiles Module IV / Development Processes F IGU RE 11.18 Some of the key dimensions of change management. Examples of the people, process, and technology factors involved in managing the implementation of IT-based changes to an organization. Strategic Operational Impact on Business High Technology • • • • Enterprise Architecture Supplier Partnership Systems Integrators Outsourcing • Technology Selection • Technology Support • Installation Requirements Process • • • • Ownership Design Enterprisewide Processes Interenterprise Processes • Change Control W • Implementation Management I • Support Processes People • Change Leaders • Loose/Tight Controls • Executive Sponsorship and Support • Aligning on Conditions of Satisfaction • • • • Recruitment Retention Training Knowledge Transfer Low L S O High Low Level of Difficulty/Time to Resolve N Source: Adapted from Grant Norris, James Hurley, Kenneth Hartley, John, Dunleavy, and John Balls, E-Business and ERP: Transforming the Enterprise, p. 120. Copyright © 2000 by John Wiley & Sons, Inc. Reprinted by permission. J workplace. Change management also involves anacompetencies required in a changing lyzing and defining all changes A facing the organization, as well as developing programs to reduce the risks and costs and to maximize the benefits of change. For example, impleM such as customer relationship management might menting a new e-business application involve developing a change action I plan, assigning selected managers as change sponsors, developing employee change teams, and encouraging open communications and feedback E key tactics that change experts recommend include: about organizational changes. Some • Involve as many people as possible in e-business planning and application • • • • development. 5 Make constant change an expected part of the culture. 0 Tell everyone as much as possible about everything as often as possible, preferably 5 in person. 1 incentives and recognition. Make liberal use of financial Work within the companyB culture, not around it. U DHL Express: The Challenges of Global Change Depending on the business pressure du jour, large IT shops tend to swing back and forth from one organizational model to another. Need to save money and promote technology standards across the organization? Centralize. Need to respond more quickly to local market demands and better align with the business? Decentralize. “It’s a constant tension between the two extremes of the pendulum,” says Ron Kifer, senior vice president and CIO for the United States and Canada at DHL Express. The global transportation and logistics services giant began to centralize and consolidate IT infrastructure and services six years ago, building a massive computing supercenter in Kuala Lumpur to manage IT for most of its operations in the AsiaPacific and emerging markets, Kifer says. Two years ago, DHL opened a supercenter obr76817_ch11_446-480.indd Page 471 8/19/10 2:50 PM user-f499 /Volumes/207/MHSF190/keL319951_disk1of1/pagefiles Chapter 11 / Developing Business/IT Strategies ● 471 in Scottsdale, Arizona, to consolidate IT for the United States, Canada, and parts of Central and South America; and this year, the company set up a supercenter in Prague to condense IT for most of Europe and the Mediterranean. Although centralization drove down costs, it did make it harder for business units to ensure that IT spending was in sync with business strategy. “It was difficult to get the right people from the business together with the right people from IT to define project requirements in a manner that was suitable for design and specification,” Kifer says. Multiple iterations of project requirement specs were continually shifting between the business and IT (because of their remoteness to each other), adding cost and time to project life cycles, he says. DHL has now embarked on an IT transformation that aims to give it the best of both worlds. The arrangement separates the supply side of DHL’s IT organization from the demand side, and it puts IT demand management under the business’s control. “Demand CIOs” report to regional CEOs and manage the region’s IT budget, Kifer says, to align IT spending W more closely with business strategy. The demand management function—Express Business IT (EbIT)—is staffed by IT employees who I were previously focused on demand management aspects of IT. Under the new model, Kifer says, DHL will be ableL to reap the cost savings of its centralized computing supercenters, as well as the alignment benefits of having IT closely tied to regional operaSadopting this organizational model. Regional teams are in tions. All regions of DHL are charge of implementing the O EbIT functions within their regions, Kifer says, but a “thin global group” under a single CIO is coordinating to ensure a consistent approach, N standards, processes, and tools from region to region. DHL also has a global corporate transformation office supporting , this initiative. For many employees, the reorganization means a dramatic change in roles, reporting relationships, and processes, Kifer says. DHL’s change management plan emphasizes education and Jtraining to help employees understand the benefits of these changes to the company A as a whole—and to them personally. M I E An eight-level process of change management for organizations is illustrated in Source: Adapted from “Case Study: DHL’s Global Change Management Plan,” CIO Magazine, November 1, 2005. A Change Management Process Figure 11.19. This change management model is only one of many that could be applied to manage organizational changes caused by new business/IT strategies and 5 applications and other changes in business processes. For example, this model suggests 0 in the strategic planning phase should be communithat the business vision created cated in a compelling change 5 story to the people in the organization. Evaluating the readiness for changes within an organization and then developing change strategies and choosing and training 1change leaders and champions based on that assessment could be the next steps in the B process. These change leaders are the change agents that would then be able to lead change U business stakeholders in building a business case for teams of employees and other changes in technology, business processes, job content, and organizational structures. They could also communicate the benefits of these changes and lead training programs on the details of new business applications. Of course, many change management models include methods for performance measurement and rewards to provide financial incentives for employees and stakeholders to cooperate with changes that may be required. In addition, fostering a new e-business culture within an organization by establishing communities of interest for employees and other business stakeholders via Internet, intranet, and extranet discussion groups could also be a valuable change management strategy. Such groups would encourage stakeholder involvement and buy-in for the changes brought about by implementing new e-business applications of information technology. obr76817_ch11_446-480.indd Page 472 8/19/10 2:50 PM user-f499 472 ● /Volumes/207/MHSF190/keL319951_disk1of1/pagefiles Module IV / Development Processes F IGU R E 11.19 A process of change management. Examples of the activities involved in successfully managing organizational change caused by the implementation of new business processes. Set Up Create Change Vision Define Change Strategy Develop Leadership Analysis • Understand Strategic Vision Definition • Create Compelling Change Story • Make Vision Comprehensive and Operational • Assess Readiness for Change • Select Best Change Configuration • Establish Change Governance • Create Leadership Resolve • Lead Change Program • Develop Leadership Capability • Build Teams • Manage Stakeholders • Communicate • Manage Resistance • Transfer Knowledge and Skills Manage People Performance • Establish Needs • • Deliver Business Benefits • Build Business Case • Build Commitment Transition W I L S Implement Performance Management O Implement People Practices N , Quantify Benefits • Sustain Benefits J • Implement A Cultural Change M Design • Understand • Design Target • Implement I Current Organization Organization Organizational Change Organization E Source: Adapted from Martin Diese, Conrad Nowikow, Patric King, and Amy Wright, Executive’s Guide to E-Business: From Tactics to Strategy, Develop Culture • Understand Current Culture • Design Target Culture p. 190. Copyright © 2000 by John Wiley & Sons, Inc. Reprinted by permission. Avnet Marshall: Organizational Transformation 5 0 Figure 11.20 illustrates how a company like Avnet Marshall can transform itself via information technology. 5 Notice how Avnet Marshall moved through several stages of organizational transformation as it implemented various e-business and 1 e-commerce applications. B First, Avnet Marshall implemented an automated shipping and receiving system (AS/RS) and a quality order booking, resell application (Qobra) as it focused U on achieving customer value through cost savings generated by the efficiencies of automating these core business processes. Then it focused on achieving interconnectivity internally and building a platform for enterprise collaboration and knowledge management by implementing its AvNet intranet and a data warehouse. The second step was building an Avnet Marshall Web site on the Internet to offer customers 24/7 online e-commerce transactions and customer support services. In addition, the company built a customized Web site for customers of its European partner SEI. Next, Avnet Marshall connected with its suppliers by building a PartnerNet extranet and the Distribution Resource Planner (DRP) system, a supply chain obr76817_ch11_446-480.indd Page 473 8/19/10 2:50 PM user-f499 /Volumes/207/MHSF190/keL319951_disk1of1/pagefiles Chapter 11 / Developing Business/IT Strategies ● 473 FIGURE 11.20 Avnet Marshall moved through several stages of organizational transformation as it implemented various e-business and e-commerce applications, driven by the customer value focus of its Free.Perfect.Now business model. Free. Perfect. Now. Value Innovation ENEN Netseminar MAP2S Customization DRP Data Marshall Warehouse on the Internet and SEI Time Quality Qobra Cost/ Efficiency AS/RS Localized Implementation Internal Integration PartnerNet W I L S O N , MarshallNet Business Process Redesign Electronic Design Center Business Network Redesign Phases of Organizational Transformation Business Scope Redefinition J A M I enables the c...
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Why has prototyping become a popular way to develop business applications?
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