A Pragmatic Approach to E-Business Initiatives for Mid-Sized Organizations Embarking on Lasting E-Ventures   Understanding that an Internet strategy is a business strategy - that technology is not a commodity - will ensure e-success. Estimates predict that Internet-related businesses will generate revenues in excess of $507 billion by the end of 2000; other figures show e-business in the business-to-business markets will generate $7.3 Trillion by 2003. With these estimates in mind, it is no wonder that companies are transforming or trying to transform themselves into digitally integrated organizations. The hope is that they can run more effectively than ever before, decreasing costs, expanding into new markets, and increasing revenues. An effective e-business can automate and integrate both front- and back-end business processes, from interfacing with the customer to managing the supply chain, over the Internet. The benefits are countless - low-cost, high-return efficiency; speedy and responsive supply chains; increased customer satisfaction and top-notch marketing. Whether a company's Internet initiatives are business-to-business, business-to-consumer or intra-business, pioneers of all kinds are trying out ambitious ventures, filled with promise. However, there's no user's guide for e-business; the great majority of all such initiatives are taken on with blind faith. According to industry analyst Gartner Group, 75% of all first e-business projects are the wrong initiatives, due in part to a lack of understanding of the technology involved and poor business planning. E-failures happen because companies don't link their Internet strategy with their overall business strategy or think prudently about changing behaviors of their employees, suppliers, distributors and customers and underestimate the importance of technology. Effective e-solutions involve much more than creating links and snappy web sites. To succeed, Internet projects must encompass the full value chain - from an electronic storefront, through internal/external partner relationships, to back-end legacy integration. Whether the goal is a corporate portal or build-to-order production, companies first need to examine core business goals and long-term growth plans. Launching e-business initiatives will demand a high degree of prioritizing processes and assessing corporate resources. The purpose of this article is to minimize the risks associated with e-business initiatives by helping companies take a pragmatic approach based on solid business strategy in alignment with technical assets. Mapping E-Initiatives To Business Strategy Ensures A Pragmatic Approach To create a successful, long-lasting e-business strategy, it's important to remember that the transformation to a digital organization is a business challenge. As with any business challenge, companies must first examine business processes relative to the customer. The best approach for any CEO or management team is to analyze the business needs and goals, find out what customers want, focus firmly on business return, build a cross-functional team and develop a strong business case. After all, your company is pioneering the e-frontier to better serve and interact with partners, suppliers and customers - not to design a better web page. The successful company will develop a business strategy consisting of a unique and flexible value proposition, and will align the corporation to capitalize on it. "E-business isn't just about a technology shift; it's a fundamental change in the way companies do business," states David Caruso, VP of enterprise application strategies at AMR Research. From customized web pages for distributors, to on-line marketplaces and employee and customer communications, management needs to understand how Internet strategies blend with their corporation's overall strategies. To select the right e-business initiative, a corporation must first take a pragmatic look at its multiple business processes such as procurement, order processing, transportation planning and customer relationship management, and prioritize changes according to the expected impact on bottom-line efficiencies. For example, one of the most valuable and long-lasting benefits of building an e-business is the dramatic improvement it can make on customer service. Better service levels lead to top-line value stemming from increased customer retention, greater market share and increased revenues. Once business processes have been prioritized, it is very important they are aligned with the technology and are in accordance with the corporation's overall strategy. Based on recent Gartner Group research, enterprises that fail to select technologies based on business strategy rather than departmental needs will under perform peers by 25%. A company embarking on an e-business journey needs to constantly ask itself "Where do we want to go" and "How are we going to get there" to make sure the initiatives and the technology are mapped to the business plan. Internet-enabled Business Solutions Based on Accurate Assessments will Protect Investments The ability to connect all the components involved in an e-business implementation while simultaneously maintaining a "big picture" view is difficult, yet critical if the project is to deliver the expected benefits within the targeted timeframe. Without considering all the micro-components within the implementation and devising a plan to weave them together, it is impossible to achieve the full benefits expected on the macro level. For example, a company will not realize the full potential from any type of e-business implementation without addressing key issues such as how web-based applications will integrate with the ERP backbone. In assessing a corporation's technical assets, an ample amount of consideration must be given to legacy systems in order to evaluate future requirements and integrate both into a seamless environment. Since organizations have spent a considerable amount of time and effort in deploying existing systems, executives will want to retain their investment by minimizing development and modifications for building their e-business solutions. "A company should take a technology inventory and evaluate solutions that enable the corporation to reach its goals. Then build the technology infrastructure - prudently," declares Tom Penley, VP of Braxton-Reed's E-Business Solutions Practice. "Only then does one apply the solution." The platform used to connect to the Internet will also need to match business requirements. It's important to base e-business solutions on industry-proven technologies, such as those offered by market leaders IBM and Microsoft, that are designed specifically to meet the needs of mid-sized organizations. Whether your e-business initiatives are mission-critical or internally- or externally focused, companies must assess applications, servers and network infrastructure factors including flexibility, availability, compatibility, scalability, performance and bandwidth. Now that the power of the Internet has been realized, companies need to protect themselves from outside threats by reviewing their front and back end security, ODBC authority restrictions, firewall implementation and data replication. While matching the e-business application to the right technology platform is one key to success, equally important is having the right skill sets to build the IT infrastructure. These days, information technology managers are being asked to roll out new applications at record speed. Therefore, e-business teams need to assess the technical skill sets within the organization. Are the team's resources skilled at programming in Java, HTML and XML? Have they integrated e-business applications into an enterprise before? Does the organization possess the skills it needs to configure the solution on new and legacy systems? For critical issues such as these, the expertise of an IT infrastructure provider can supplement internal resources with the skills needed to assess, integrate, deploy and evaluate web-based applications. An IT infrastructure partner will consider significant IT issues such as system components, storage, back-up and restore, availability, legacy system integration, capacity planning and IT technology monitoring and management. Best of all, contracting with an IT partner enables the project manager and executives to focus on the strategic, "big picture" perspective and on future improvements, while leveraging the expertise of the outside players involved. Internal Champions Focused on Economic Return are Irreplaceable One of the most important elements in a successful e-business implementation is management sponsorship. Without buy-in from senior staff, the project leader will find it difficult to change the behaviors of suppliers, distributors, customers and employees; at the same, time he or she is managing the changes that are impacting those key audiences. Check points with senior management should be established, both for measurement and continuous refinement of e-business processes. For example, now that the way the customer orders products has changed, how does an organization take that service to the next level? An intelligent e-business solution could flag the issue to that customer and react by reminding them to order or making them a special offer. This provides an even greater level of personalization that may not have been implemented in the first stage of deployment. Of equal importance is a project manager who understands the complete view of the project and who can focus both internal and external resources on the business priorities. By appointing an internal project leader with the charter of keeping an eye on the project's overall business goals and managing the different players on the implementation team, a company greatly increases its chances for e-success. The best strategy for the maximum return on investment begins with the internal project team leader having a clear understanding of the talents of every player on the team and the ability to map these skill sets to overall goals of the implementation. A sharp project leader will manage the e-business initiative from several different perspectives. As discussed, the designated person will ensure success by keeping the implementation and resources aligned with the overall business strategy. In addition, the project leader can be integral in defining the project scope, making sure it stays on track and measuring its success. A widely reported problem with e-business initiatives has been the instance of "scope creep," or implementations that come in at higher than expected budget and time frame while the company waits for the illusive return on investment that never seems to arrive. The ability to provide early notification of scope creep and real-time problem resolution are two characteristics that management should look for when engaging their project manager. Project managers will greatly increase their opportunities to succeed by defining business benchmarks and making a routine practice of measurement. This will enable management to track business trends and identify issues such as distribution problems or a reduction in sales orders, and will help the project manager stay focused and merchandise his or her successes. In fact, Gartner Group projects that 65% of project managers will limit their career growth by neglecting to develop a Total Cost of Ownership (TCO) model of measuring progress that is integrated with Return on Investment (ROI) and project management decisions. Successful project leaders must use the combination of TCO, ROI and project milestone planners as the basis for an effective set of project manager tools. ROI can be calculated on the basis of profit and cost reduction or Key Performance Indicators (KPIs), such as improved value, enhanced operational efficiencies or customer/employee retention. TCO calculates the cost of the complete project over its entire lifecycle, and incorporates the cost of application software and maintenance, client/server and peripheral hardware and maintenance, internal staffing, operations and support personnel, training and change management, external staffing, external facilities management or support services, telecommunications and its implementation and integration. Braxton-Reed e-View: Where Business and Technology Meet To assist clients as they embark on e-business initiatives, Braxton-Reed works with them to examine their new business models and implement a proven approach to program assessment, project management and economic return methodology. Capitalizing on experience, Braxton-Reed guides customers through the risks of deploying applications across multiple business processes and systems. During the program assessment phase, Pragmatic Pro, your organization's executives and functional heads take a broad view of the enterprise and assign teams to catalog business processes and look carefully at how key stakeholders interact with the company. The outcome is a list of short- and long-term business objectives and a prioritized list of e-business initiatives that are assessed in Braxton-Reed's Scenario and Simulation Setting. Each e-business initiative is reviewed on the basis of whether it ties back to the company's overall business strategy and how it aligns with the technology solution. During this project definition stage, the organization's internal and external resources are assessed, executive sponsors are assigned and budgets, timelines and checkpoints are established. The e-business solution is then quickly developed and deployed across the enterprise with Braxton-Reed's proven economic return methodology for continuous measurement and improvement of e-processes. Embarking on an E-venture: A Journey Worth Taking The journey to successful e-business initiatives can be an arduous one. But when organizations proceed with a pragmatic business plan for reaching corporate goals and ROI, the likelihood of success grows. Pioneers wise enough to build on their core competencies and create an e-business solution focused on customers, suppliers, distributors and employees via well-executed initiatives will reach their destination safely. Sweating the details - legacy system investment, future technology needs, resources and skill sets - and mapping them to business strategy will ensure e-success. ©1999 2004Braxton-Reed. All Rights Reserved.