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The Road of e-Business Transformation - Essay Example

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This essay discusses that the road to e-business transformation can be a road that could be a road paved with endless frustrations if the proper change management procedures are not in place or considered. E-business is about continuously revolutionizing market spaces and business models…
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The Road of e-Business Transformation The road to e-business transformation can be a road that proves equitable or could be a road paved with endless frustrations if the proper change management procedures are not in place or considered. Before the decision to go ahead with the actual e-business implementation is considered, there is the need to consider the many options and stages that are required before the transformation is complete: (source: http://groups.haas.berkeley.edu/citm/conferences/001206/Presentations/Arie%20SegevPres.pdf) (Source: http://groups.haas.berkeley.edu/citm/conferences/001206/Presentations/Arie%20SegevPres.pdf) (source: http://groups.haas.berkeley.edu/citm/conferences/001206/Presentations/Arie%20SegevPres.pdf) One distinctive feature of the new economy is the development of e-business models. Government entities, organizations, and the public in general and globally have been enthused by the seeming 'e' magic. Contemporary e-business growth and milestones have been distinguished by a mixture of hype, hope, and horror. Both government and industry experts and leaders are anticipating the time when e-business investments will eventually create authentic and lasting change. E-business is about continuously revolutionizing market spaces and business models, innovating organizations in time to compete, reinforced by Internet technologies, manpower capital, and the search for value. The strength of the transformation is the core of e-business investment, but such has yet to be sufficiently illustrated through the current applications of e-business models (Khoong, 2001). The Evolution of e-Business Models Industry e-business developments may be evaluated as gradually developing through three phases of maturity, namely, startup phase, partnership phase, and consolidation phase. The startup phase transpired between 1995 and 1999. During the onset of e-business, several pure-play startups surfaced, utilizing technology as a critical business driver. The value proposition of the startups was inclined towards the catch phrase 'Content is King!'. The euphoria was compounded by a gold rush - valuation of dotcoms was seen as the way to instant wealth. The reality of the startup phase was that expensive customer acquisition was of little help for weak value propositions, and the big burn rates eventually caused the failures of numerous startups. The first 100 days of business also became the last 100 days for some. The tail end of the startup phase was a B2C shakeout. It was only last year that e-business investors began to separate the hype from the reality. The NASDAQ crash provided a much needed correction on the real value of e-business investments. This second phase - the partnership phase - is where we stand today. Partnerships through joint ventures and strategic alliances between old-economy and new-economy firms are seen as the attractive paths to profitability. By focusing on vertical business sectors and leveraging partnerships to provide a ready community of subscribers to e-business services, customer acquisition costs are dramatically reduced and the top-line potential becomes significantly more lucrative. The partnership phase is expected to run for another year or so, by which time the next phase will set in. In the meantime, the market will have to sort itself out, as at the moment a glut in e-marketplaces is looming. The tail end of the partnership phase will be B2B shakeout. Within the next two years, we expect consolidation in the e-business industry. This will then bring us into the consolidation phase, in which every business is an e-business, and the 'e' qualification becomes totally redundant. Consolidation will mean e-business infrastructure becomes the backbone of huge business networks, supporting end-to-end supply chain integration. The tail end of the consolidation phase - if there is one - may be characterized by a world comprising a few gigantic global e-firms and some very small firms who remain out of the e-loop. In summary, the e-business evolution is actually composed of several stages of evolution, albeit in rapid succession. The types of play have evolved from pure play to advanced combinations of bricks, clicks, mortar, market, and infrastructure plays. Paths to profitability have developed from content to community to convenience. It is also asserted that the e-business investment game is no longer about first-mover advantage; now, it is all about lasting value propositions (Khong, 2001). There are thematic priorities which have an impact on e-business models for adoption, which include: organizational, societal, individual, technical and each are interrelated and it is ‘envisaged that the outcome of e-factors that will demonstrate the necessity of a comprehensive approach that takes into account all thematic priorities.” (Vassilopoulou, Pouloudi, Patronidou and Poulymenakou, 2003) These are further described as: Organizational: organizational impact is manifested in changes in the nature and structure of work at the intra- and inter-organizational level, and creation of new types of communities (among users, partners, facilitating agencies) Societal: by focusing on dynamic capabilities that emerge from new business models and defining new methods of work, there is a need to investigate the evolution of knowledge workers and consequently implications on employment. Individual: e-business models need to include both marketing and operational issues, distinguishing the factors that impact decision making at the individual level for both customers and employees. Differences in determinants of adoption and maintenance of e-business between users across business types or socio-demographic, cultural and psychographic clusters are not well understood. Technical: Technological advancements open additional possibilities for distribution and supply partners, for participation in virtual trading communities or dynamic virtual organizations, and for extending classic value chains to value networks. The models are very intertwined in the evolution of incorporating e-business within an existing company in the development stages. Development of electronic commerce involves: ordering systems, electronic data interchange, electronic funds transfer, internet-based electronic commerce and other technologies and their convergence depending on their needs in the e-business infrastructure. Such change models that are part of the e-business structure are: Planned change: The planned model of change depicts a series of predefined steps. It adopts a rational approach to incorporate information technology into the sequence of change. One of the factors involved in implementing a sound e-business implementation and there is a theoretical framework that needs to be employed during the planning stage for evaluation. When a company begins to review the current infrastructure change, the theoretical framework needs to be correlated through the use of “three research models” (Ash and Burn, 2001) and are illustrated via “benefits of B2B, e-Business Change, and, Virtual Organising’” (Ash and Burn, 2001) where: Benefits of B2B is illustrated by a two dimensional model (1) where value returns are directly proportional to the level of integration of e-business activity across a set of B2B models (Carlson, 1995). B2B refers to the class of business-to-business (B2B) models that include business-to-supplier (B2Bs), business-to-employee (B2E), business-to-consumer (B2C) and business-to-corporate customer (B2Bc), (Ash, 2001) E-Business Change is illustrated by a flat model (2), in which progress is across eleven interrelated components within three broad dimensions based on relevant research in the areas of “organizational change, strategic management innovation, and e-business evaluation” (Guha et al, 1997) (Ash, 2001) Virtual Organising is illustrated by a three-dimensional model (3) of e-business activity that is “applicable to any company.” Progress is along the three dimensions of “customer interaction, asset configuration, and leveraging knowledge” (Venkatraman & Henderson, 1998) (Ash, 2001) Figure 1: Three Faces of e-ERP Implementation. (source: http://www.bledconference.org/proceedings.nsf/Proceedings/A4B1F0329459D259C1256EA1002E4C5C/$File/41Ash.pdf) Each of the e-Business model changes reflects a different business focus covering organizational theory, strategy, change management, and work practices. These models were evaluated at different stages as shown in Figure 2: Figure 2: Composite Case-based Research Method As the planning stage progresses, so does the data collection and analysis whereby data is gathered from three sources: primary, secondary and tertiary. In a survey conducted in 2000 by PwC Consulting (2001) indicated that e-Business was seen as a ‘change factor and as the principal mean to achieve growth.” (PwC, 2001). The following models are summarized in the following graph: Figure 3: source: http://www.dad.be/library/pdf/CEO.pdf During the planning stage there are many things to consider with respect to reviewing the diversity of the impending change and where exactly the barriers and resistance to change could be. PwC Consulting (2001) further charts this as: Barriers and resistance to change Figure 4: Barriers and Resistance to change (Source: http://www.dad.be/library/pdf/CEO.pdf) Situated change: The situated model of change explains an emergent mode of interaction between technology and organization. Such situated change emerges by responding to unanticipated crisis, experimenting with new ways of technology use, and initiating opportunistic shifts in work structure. Within the e-business structural model, situated change involves the following systems and tools: Identify performance in the context of an authentic context Enable the collaborative construction of skills and knowledge using authentic activities Provide access to expert performance and process modeling Sustain the new constructed performance with authentic contextual assessment via workflow feedback loops As large global enterprise software vendors such as SAP, IBM, Oracle, PeopleSoft, Siebel and Sun make inroads into the e-business structure, the dominant theme in their marketing positioning and product strategy is the clear message to customers that integrated business application suites are superior to point solutions. The disadvantage of this model of change management is that it assumes that the situation is present and the processes are adapted to a specific situation which does not leave room for potential adaptations to the software or e-business structural software. Adaptation change: The adaptation model of change sees the organization as an ecological system that has to adapt to challenges arising from the environment. As business new to e-commerce and the e-business enterprise situation, this model type tends to be far more unpredictable as it means that software or e-business strategies are continually changed as the environment changes. This only leads to further unscheduled work and puts development for e-commerce behind other more diverse e-business companies and can lead to the inference that a business is not forecasting their needs and wants quick enough. The adaptation model is extremely apt at working towards changing the organization’s e-business structure as the challenges are forthcoming to the organization. Is a good solution but does not take into account all possible challenges. To utilize this type of model of change management for e-business, every possible adaptation needs to be configured into the system to allow for every possible change that could arise. The above diagram explains how the change management level and strategy/planning levels are inter-relational in determining the development level. In the change management level, change management and e-Business management work together to build on the plan to put to the strategy and planning level. At the strategy/planning level, the strategic initiatives and cultural readiness plans are put in place which will then be moved into the development level. The development level is responsible for input both from the change management and strategy/planning level and is the basic learning organization environment where all levels are relational to each other: IT leveraging, knowledge capacity, relationship building and learning capacity. This development level is actually cyclical in it continual development of the e-business software in an effort to continually go back and forth with the strategy/planning level and change management level groups. Structuration change: The structuration model of change explains the interaction between technology, organization, and social structure. This perspective seeks to examine how technological change might occasion changes in people’s work in the organizational context. The structuration model of change also highlights the influence of social dynamics on IT-enabled change. The structuration change model is the better model to embrace for e-business complexities as it engages the entire factor of the business entity itself and the future abilities of the company without sacrificing quality of work. The theory of structuration suggests that human actions simultaneously condition and are conditioned by institutional properties in social contexts. The three modalities are key concepts which Gidden (Stein, 1996) define as understanding mutual interaction: interpretive schemes, resources, and norms. Interpretive schemes are vehicles for the communication of meaning. Resources are allocated by human agents and become the basis for individual power. From the perspective of structuration theory, organizational change is the joint effect of the actions of individuals interacting with institutional structures like business strategies, communications vehicles and information systems. These structures both enable and constrain the daily actions and thought processes of people, but do not wholly determine them. (Pozzebon and Pinsonneault, 2001) Strategies for theorizing from process data include the following: The above table outlines the seven strategies for theorizing from what is obtained from process data, as put forth by Langley (1999). By looking at such strategies as grounding, organizing and replicating the author proposes how each of the strategies fit into the process data complexities and how specific data needs, key anchor and sensemaking factors in an effort to combine these into what is described as a “good theory” dimension. For example, in the grounded strategies the grounded theory adapts well to eclectic dta and ambiguity but may miss broad high-level patterns. The specific data needs of this strategy includes the details on many similar incidences and the key anchor and sensemaking categories include incidents and meaning/patterns. This theory is high in accuracy and moderate in simplicity which means it is, in fact, difficult to go from substantive theory to a more general level. The first step used in identifying the methodological strategies used by IS researchers when investigation IS-human action interactions using a structurational perspective have found that (a) adaptive structuration studies clearly use variance approaches, whereas mutual shaping and (b) actor’s organizing studies can be characterized as using a process approach (Pozzebon and Pinsonneault, 2001) Structure in ERP systems include four major conceptions of structure which include: Structure as patterns of aggregate behavior that are stable over time (Methodological Individualism) Structure as lawlike regularities that govern the behavior of social facts (Methodological Holism) Structure as rules and resources which are implicated in social practices and have no existence independent of them (Giddens’ Structuration Theory) Structure as systems of human relations among social positions (Methodological Realism) (Archer, 1995, p. 104) ERP systems are hugely complex systems that can impose constraints on operating users – a definition of structure based on methodological holism can usefully represent such aspects of ERP in that it would see the ‘system’ as a powerful and inflexible imposition on work practices and individual action. (Archer, 1995, p. 105). The third conception of structure is proposed as means of accommodating both views. The concept of structure provides for a virtual existence for structure and sees structure as having no existence external to the agency – they are functionally inseparable – structure only becoming real when instantiated trough agent’s actions. (Archer, 1995, p. 107) The adaptation of software and organizational processes is an iterative process entailing on-going social action that is clearly constrained by both the structural properties of the organization and the built-in properties of the software. The actions of the project team and other members of the organization will alter some of these properties and reaffirm others. (Archer, 1995, p. 236) ERP systems are often implemented by adopting completely the best practice model included within the package – in this case the ERP implementation can be seen as a purely big software package installation. Volkoff (1999) discusses the constraining effects of ERP systems such as SAP or PeopleSoft as: Individuals at PFP made statements such as ‘[the software] changes the way you think about [a specific type of information] because SAP treats it differently .. it was a big thought process change’ and that they had to ‘translate user requirements into SAPanese’. At UNI one user talked about ‘changing from trying to map from my world into PeopleSoft, to asking what will make this system work, mapping from PeopleSoft into my world.’ (p. 236) Structural Theory is useful in defining agency roles and effects but without a clear recognition of the reality of structure and its emergent properties it is very difficult to properly analyse the particular properties of ERP system and how they may constrain agent actions (Archer, 1995) For IS research it seems that the fundamental assumptions underlying the theory do not seem to mesh well with the ‘reality’ of technological systems. The critical realist perception of accepting a technological systems as a pre-existing object with emergent and irreducible properties rather than as a virtual object only ‘made real’ through instantiation seems a more useful and practical representation. More practical research using this theory is required particularly in the examination of e-business extensions to ERP systems. Web-enabled ERP systems can provide new means of empowering users – the interaction of users and the different components of the underlying system need to be examined carefully in more detail. The critical interpretation seems a more useful means for examining the particularities of such systems and ERP systems in general. Cascading change: The change process is inherently complex, involving a wide range of change management issues and interactions. Consequently a key element in risk management is the identification of these issues and their interactions and the application of balanced resources to facilitate change and reduce risk across all relevant areas. This is also a very qualified mode of change management methodologies wherein it takes the whole effect of not just the entire infrastructure itself in promoting the e-business program, but also along with balancing this out with any potential risks that can be used to incorporate the commerce program. The MIT 90s Model for Change Management, was originally used to analyse the wide-ranging effects of developments in information technology on business organizations. The model, as shown in the following Figure, assumes that an institution’s effectiveness in the use of ICT for teaching and learning is a function of six inter-related elements: The external environment within which the institution is operating The institutional strategy in relation to e-business implementation The way human resources are prepared and deployed to support the implementation of e-business teaching and learning to individuals and their roles The organizational structures that support the application of e-business The characteristics of the technology being applied The management processes that facilitate the initiation, sustainability and success of application of e-business Scott-Morton’s MIT90s Framework Four basic assumptions are made about the model when applied to risk: 1. Risk management is about managing the interaction of elements (strategy, structure, management processes, etc.) and their configurations rather than just about managing the elements themselves. 2. Where the elements are integrated and are all pulling in the same direction (ie. There is a goodness of fit) then e-business is more likely to be embedded in the institution and risk more effectively managed. 3. The fit between internal configuration and the external environment is important to risk management. For example, the survival of an e-business institution depends on its ability to provide products to meet market needs. 4. The model shows how cultural issues (structure, management processes and individuals/roles) can mediate between the strategy-technology changes in order to reduce the investment over what is needed for an e-business to succeed. Conclusion The attitudes that benefit online technologies are the drivers for e-commerce are outlined in the following slide: The barriers to e-business are: The development of e-commerce include underdeveloped logistics such as no other alternative available, delivery services are still underdeveloped and many current solutions are designed for small volumes. Another development slowdown is the current barriers to global e-commerce (Farhoomand, Yee & Tuunainen, 2000) are: Technical issues Political questions Cultural differences Capabilities of organizations Economic factors Legal issues Business models are used in e-commerce and e-business to identify the procedural elements of generic business models; are used to develop a conceptual framework for analyzing and understanding business models; provide assistance to companies to help them identify different business models based on management patterns related to functional elements such as product development, marketing, sales, revenue logic, services and implementation; and help individual companies to understand their role in the value networks, and to better compete and become better strategic partners for larger companies. (Tuunainen, 2000) Future of e-Business Software When looking at the future of how e-business software, there is the need to look at the waterfall diagram to understand the direction of the change management control process: This diagram is also important to help in distinguishing the future of how the emerging e-strategy can move toward being a connected enterprise. As each control phase is completed, each new “waterfall” step needs to flow through the process without any problems regarding control or model. Figure: Source: Clarica As such, this now leads to the emergence of the new formulation of business enterprise to take place of the traditional brick and mortar business enterprise Source: clarica By understanding how the emergence of the new business “hybrid” through looking at the overall end production result, there is the need to look at the phases of e-business development in order to phase in the correct phases: Source: Clarica Source: Clarica As companies look to integrate e-business solutions, the need to not only ensure that all steps are incorporated into the plan, but also the risk management assessments are completed to ensure that the quality of work is kept to standards outlined in the original change management plan. There are many factors that are brought into the realm of e-business, but, the benefits of implementing this phase of business cycle far outweigh any of the risks involved in implementation. References Amit, R. & Zott, C. (2001). 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RTA stands for “Roads & Transportation Authority” that is working for the purpose of carrying transportation projects and traffics standards and legislation in Dubai.... As now… The number of travelers' and visitors is increasing day-by-day so it is becoming important for the government of Dubai to pay attention towards it infrastructure facilities....
10 Pages (2500 words) Research Paper

W5 asig ETL and Data Warehousing

American Airlines is reported to be one of the world's largest carriers with historical roots traced in the 1920s (American Airlines, 2011).... It is currently headquartered in Fort Worth,… s and was noted to be “one of the largest scheduled air freight carriers in the world, providing a wide range of freight and mail services onboard Americans passenger fleet” (American Airlines, n....
2 Pages (500 words) Essay

Operation Management: Process Design

This paper has slight similarity to Hogget and Martin's paper whereby it involves the investigation of experts working within an industrial setting involving decision-making as a tool.... The intended audience of this paper are the professionals and students within the field of product development....
11 Pages (2750 words) Essay

Significance of Maritime Transportation

In the paper “Significance of Maritime Transportation,” the author focuses on maritime transportation, which had progressed into an imperative human activity throughout history, mainly where the prosperity depended principally on foreign and interregional trade.... hellip; The author states that the marine transportation system is a network of dedicated vessels, the ports they stopover and transportation infrastructure from factories to terminals to distribution centers to international as well as domestic markets....
6 Pages (1500 words) Assignment

Technology Improves Transportations

road transportation is considered more safe and recognizable and relatively inexpensive than other transportations.... The paper "Technology Improves Transportations" describes that the use of the latest technology is making the travel transactions easier and expedient day by day....
8 Pages (2000 words) Essay

Transportation Infrastructure

This research paper examines transportation, that is one of the most crucial and basic ingredients of all the field of life especially of international trade e.... .... shipping, agriculture, food industry, construction, traveling, tourism, and a number of other business fields.... hellip; From this paper, it is clear that the safe and secure carrying of passengers, speedy deliverance of products, and the preservation of quality of different commodities are most important issues for the success of transportation companies....
9 Pages (2250 words) Research Paper
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