IT-Enabled Business IT-Enabled Business TransformationTransformation

IT-Enabled Business IT-Enabled Business TransformationTransformation

From Automation to Business From Automation to Business Scope RedefinitionScope Redefinition

Agenda

• Introduction• 5 Levels of Transformations• Conclusion• Q & A

Introduction• Team members

商研一• 張菽珊• 謝文淵• 簡見安• 林俊吉

Business Logic Evolution

1970s and 1980s:

exploiting experience curve for achieving low relative cost through vertical integration (efficiency enhancement).

1990s:

low cost, high quality, and fast/flexible response to customers’ need (capabilities enhancement).

Localized Exploitation

Internal Integration

Business Process Redesign

Low

Low

HighRange of potential benefit

Degree of

bu

siness

transform

ation

High

EvolutionaryLevels

Revolutionary Levels

Business Network Redesign

Business Scope Redefinition

Five levels of IT-enabled business transformation

Level 1Localized Exploitation

• Leveraging of IT functionality to design focused, high-value areas of business operations

• Example: – Customer Order Entry System– Toll-free Customer Service System

Level 1Localized Exploitation

• Strength– Easy to identify and exploit potential IT

capability– Minimal organizational resistance to change

• Weakness– Potential duplication of efforts with in the

same organization– Lack of organizational learning

• Management Challenges

– Identification of high-value areas – Benchmark against best practice– Redesign performance assessment

Level 1Localized Exploitation

Level 2Internal Integration

• Leveraging of IT capability to create a seamless process ----both technical interconnectivity & business process interdependence

• Example

-Lexus and Infiniti

Level 2Internal Integration

• Strengths -Supports the total quality movement -Streamlines the organization process to deliver improved customer service

• Weaknesses -limited impact if competitors using newer logic

of organizing

Level 2Internal Integration

• Management Challenge -business process interdependence and

technical interconnectivity -Performance reassessed criteria -Benchmark results against best-in-class

Enablers and Inhibitors

*Technological Enablers *Technological Inhibitors

1. Favorable cost-performance trends 1. Obsolescence of technologies

2. Enhanced connectivity capabilities 2. Lack of established standards

*Organizational Enablers *Organizational Inhibitors

1. Managerial awareness 1. Managerial resistance

2. Leadership 2. Financial constraints

Enablers and Inhibitors of Evolutionary Level of Transformation

Level 3Business Process

Redesign

• Redesign key process for competing in the future

• Use IT capability for future organization capability

• Strengths -First mover advantage -Not be hindered by historical process

• Weakness -Redesigning process might be obsolete or outsourced to partners

Level 3Business Process

Redesign

• Management Challenge– Articulate business rationale for redesign– Recognize organization issues and

challenges

Level 3Business Process

Redesign

Level 4Business Network

Redesign

• Leverage related participants in the business network to provide products and services

• Exploiting IT functionality for learning from extended network

• Strengths– Elimination of activities where the focal

organization may not have required level of competence

– Streamlining business scope to remain flexible

and responsive to fast-changing and diverse customer needs

– Exploit sources of competence in the larger business network

Level 4Business Network

Redesign

• Weaknesses– May not provide the requisite source of

differential advantage if the participants in the business network not well-coordinated

– Lack of a streamlined internal IT infrastructure could hinder the ability to learn from extended business network

Level 4Business Network

Redesign

Level 5Business Scope

Redefinition

• Redefining corporate scope enabled and facilitated by IT functionality

• Example: McGraw-Hill

• Strengths– Opportunity to Create a more flexible and

effective business entity– Substitution as an effective alternative to

vertical integration

• Weaknesses– Not developing a consistent competence for

the future– Possibility of “Hollowing” the corporation

Level 5Business Scope

Redefinition

• Management challenge– Creative mix of internal activities, external

relationship and business arrangement – Assessing business success by measuring

return on value added or return per employee

Level 5Business Scope

Redefinition

Localized Exploitation

Internal Integration

Business Process Redesign

Low

Low

HighRange of potential benefit

Degree of

bu

siness

transform

ation

High

Business Network Redesign

Business Scope Redefinition

Conclusion—Alternative Approaches to BPR

Seek Efficiency

Enhance Capabilities

Any Question ?Any Question ?

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