Pillars of Net-Readiness
Electronic Business or e-business is defined as “The use of Internet and digital technologies to execute all business processes in the enterprise. ” The driving force behind the use of the internet and e-business itself is e-commerce. The definition of e-business “includes e-commerce as well as processes for the internal management of the firm and for coordination with suppliers and other business partners (Laudon, p. 25, 2004).
” To facilitate the use of digital technologies into Springs current platform, and essentially create the digital firm, they must be willing to redefine their current business model, reinvent their processes, change their corporate culture, and create closer relationships with customers and suppliers (Laudon, p. 25, 2004). The e-business design that will be chosen to bring Springs into the technological revolution will be the development and implementation of an Enterprise System (ES) with a concentration in the area of Supply Chain Management (SCM).
An ES “provides a technology platform where organizations can integrate and coordinate their major internal business processes. They address the problem of organizational inefficiencies created by isolated islands of information, business processes, and technology. ES integrates key processes (sales, production, and logistics) of an entire firm into a single software system that allows information to flow seamlessly throughout the organization (Laudon, p. 52-3, 2004). ”
The integration of IT into all of business activities can have a significant impact on the efficiency of a business and its ability to compete with competitors. Incorporating discrete business processes in sales, production, finance, and logistics, the entire organization can respond more efficiently to customers request for products or information, forecast new products, and build and deliver them as demand requires. This in itself eliminates the need for warehousing and the overhead costs with managing them.
Although this requires extensive amounts of investment in both time and capitol, the benefits reaped will off-set the cost (Laudon, p. 55, 2004). The second area of concentration in which Springs should direct their efforts, is into the creation of a SCM system. A supply chain is and integrated value chain, which is a connected series of organizational resources and activities involved in the creation and delivery of value, in both the form of finished products and services to the end customer.
“The network facilitates distribution options that perform the function of procurement of materials, transformation of materials into intermediate and finished products, and the distribution of these finished products to the consumers. ” From where they stand as of now, Springs could implement an SCM program based of their existing intra and extranets that would produce results today in the form of reduced costs and increased profits and efficiency, create the environment for successful change and deliver long term strategic advantage (Martin, p. 15-21, 2000).
E-Business Blueprint The E-Business Blueprint is both a product and as well as on-going process. Unfortunately for those at Springs, there is no such thing as a typical supply chain management plan. Before tackling such a task, it is important to first consider many of the variables unique to their industry and their characteristics of the company itself. Management itself will be forced to take an end- to-end view of the supply chain from suppliers, manufacturing, order procurement and eventually order fulfillment.
Examining the supply chain in terms of products and services and the challenges associated with competitiveness are paramount. It is here where they will have to decide where they wish to differentiate themselves from the competitors by extracting value out of the supply chain by bringing products and services to market faster at the lowest possible cost. The first part in the creation, facilitation and execution of Springs’ e-business blueprint requires them to first develop a strategic plan.
Critical questions to be answered first would be identifying critical customers (Wal-Mart, Target), where those customers are, where their customers are, and where are in the process are they most important? Next they have to examine other factors and determine final customers needs (volume, performance, demand patterns) product and service development, demand planning, information sharing, cost information for both development and reduction, performance target setting and timing milestones (Martin, p. 66, 2000).
Developing a clear and articulate vision of what Springs will look like in the system is the first goal once key aspects of the business have been identified. In the next phase, one must identify the step and processes existing at each level of the supply chain. Here, Springs can eliminate excess time and areas of overlap in their vision. Following the identification of processes, one must also identify potential issue area. Once, completed defining how the supply chain processes work together come next (Martin, p. 97, 2000).
In the facilitation stage of the e-business blueprint, Springs must identify those who they will collaborate with in the execution of this vision. The first process in this stage is the segmentation of customers most likely to join in the creation of the value chain. After completion of this stage, Springs must further segment their customer based upon their distinct set of needs, and even segment suppliers accordingly. Next Springs must match customer and suppliers into the proposed supply chain, which is immediately followed by both defining the potential benefits and making the proposed selection of the integrated supply chain.
Consideration of these factors will also include the design for operations efficiency, basic standardizations, achievement of performance standards etc. Once completed, Springs can tailor their logistics network for their differentiation strategy and look for flexibility issues that may hinder future performance (Martin, p. 99-103, 2000). The last stage in the e-business blueprint is the execution stage. Once an action plan had been proposed and approved by management, Springs can begin on formalizing their value chain.
At this point, Springs develops and implements a test pilot program where they focus on establishing information systems and negotiating quality improvement for processes, material and information flow, price, lead time, and other critical values. After the program us up and running, a full-scale, broad-based implementation plan goes in place. Although the chain is set-up and running, management must continually monitor and evaluate the company based on continuous performance and improvement (Martin, p. 107, 2000). E-Business Implementation Plan
The goal of a blueprint is to provide a balance between day-to-day operations and long-term strategic decision-making. The improvements in Springs IT infrastructure has enabled them positioned themselves to fully embrace the many facets associated with-commerce. By strategic aligning their company to meet the needs, wants and demand of their customers, Springs has ensured they will remain competitive for some time to come. The visions of those leading Springs in to the future of business have performed adequately enough to prepare for the next wave of business enterprise.
However, as E-business matures and becomes a core foundation of corporations, it demands more disciplined management, and thus should be an area of focus with Springs. As for competency, the technology Springs has invested heavily in have brought them to the place where they are now, but as improvements in systems hardware and software transpire, it is the responsibility of Springs to continually adopt and implement these changes. After years of hard work, preparation and planning, Springs is finally not only ready to tackle e-commerce, but they are ready tackle the future as well.
Laudon, J. P, Laudon, K. C. (2004). Management Information Systems: Managing the Digital Firm (8th ed. ). Delhi, India: Pearson Education Martin, J. , Roth, R. (2000). Suply Chain Management Development Strategy: What a company needs to know to develop World Class Supply Chain Management. Moving from concept to reality. Reno, Nevada: ECRU Technologies Inc. McFarlan, W. F. , (1997). www. springs. com. (Report No. 9-398-091). Boston, Massachusettes: President and Fellows of Harvard College, Harvard Business School Publishing.