Phase I -: People
It is very important to have a few champions who can spearhead the change process. If a company finds that there are no existing employee members who can own the e-transformation process, then the company needs to recruit from outside. These champions are not only visionaries but also knowledgeable on the subject, use energy, and are passionate about the transformation of the business. Many companies could not handle change due to a lack of champions who could have otherwise led the transformational process successfully.
Vision is perhaps the most critical component. A clear vision of the task ahead can be imparted to a company directly by the champion, but it can also be developed by the senior management team with active participation by the champion. What is most important, though, is that the vision is simple enough for everyone to understand. All constituents should associate a business’ e-transformation process with a clear view of the end goal. The organization should clarify their current reality and change drivers, shape a vision for the desirable organization, develop action plans that move them toward that future and address information, processes, structures and relationship issues. The vision must be converted into a plan and the plan needs to exist in a document form. It must include milestones and metrics that describe and bind the e-transformation journey, and it should be reviewed by the champion and senior management at regular intervals.
Organizations need to open the lines of communication and explore new opportunities for bringing employees and other stakeholders to work together. A significant impact of the process is its ability to enhance the level of organizational awareness. There is opportunity in this new type of culture for open and honest communications, vertically and horizontally, across the company. It is important to have a vertical and horizontal communication strategy as well as a mechanism to elicit feedback from constituents. The communication should be such that everyone in the organization understands the need for change. All should agree on the methods to achieve the desired change and understand the consequences. The key variables in the communication process are the importance of consultation, education, and participation during the process.
Engagement is the total number of employees actively involved in the planning phase of a change, which increases the level of commitment. Commitment is generated through the process of participation and involvement. Engagement enhances the level of enthusiasm for a given change initiative so that people become committed to the cause. As with any e-transformation, technology is not the only stumbling block; user attitudes create significant problems as well. Employees have to be prepared to use the technology, and they have to learn to become comfortable with it. The success factors identified as being of critical importance in the management of change are: commitment levels amongst managers and staff involved in the change process, and the level of motivation present. The key variables are: the involvement and understanding of the need for change, and the likely impact of the proposed change on the social and cultural lives of the individuals concerned.. Most of the staff affected by the change must be involved from the beginning. They must see the desirability for the change and understand the likely impact, and teams must be formed for carrying out the change.
Phase II -: Processes and Technology
Reengineer Processes-Integrate Across Units and Businesses
Companies have a myriad of hardware, software, and application systems that are not working together. Companies cannot continue to compete in today’s frenetic environment with disparate, disconnected IT infrastructures and disintegrated processes or applications. There is increasing pressure on companies to innovate, reconfigure, and customize their offerings. This demands that the existing processes are reengineered to integrate across units and businesses. This may necessitate not only the reengineering of processes, but also the Enterprise Application Integration (EAI) should have an emphasis on application-to-application integration. Here, the connections between applications, as well as the overall application or “business logic” must be taken care of to create Enterprise Business Integration (EBI) solutions. By focusing on business processes and leveraging workflow technology, the major components of EBI, organizations can tie together independent systems and processes to create a cohesive, integrated IT infrastructure. EBI solutions add the “business logic” that enables companies to incorporate their particular business processes while integrating multiple applications, ensuring a continuous flow of information between departments and throughout the enterprise.
Create a Flexible Technology Infrastructure
E-business infrastructure consists of the products and services needed to build or run e-business applications. E-business infrastructure should be flexible, reliable, scalable and quickly deployed to keep up with the ever-changing, unpredictable advances in technology. Enterprises’ e-business infrastructures are growing larger and more complex all the time. Corporate mergers introduce unfamiliar software into the enterprise, and newly hired and distributed workers make it difficult for IT managers to keep track of which employees need which applications. New technologies, particularly the Internet, have rapidly been changing business models, relationships with customers and partners, processes and overall increased pace of business. Organizations face unique obstacles to these changes and need to deploy a flexible Internet-based technological infrastructure that can respond to dynamic business environments, and better manage rapid changes in business processes and relationships. New technology architecture should ensure that every business could collaborate successfully with virtually any business partner. Customers of tomorrow would expect businesses to serve them via the Internet, anytime, anywhere in the world, on any device, at any time. Therefore, it becomes mandatory to create web-based infrastructure that can integrate back-office management systems, customers and business partners to respond to any situation. Such an infrastructure can also help to create self-service capabilities. Properly designed web portals can provide trusted business partners with a secure, flexible environment for activities ranging from self-service to collaborative commerce.
End-to-end integration of e-business solutions represents a significant challenge to today’s corporations. Internet technologies and the business data that they present and act upon are deployed in a variety of application, database, platform, and network components. In addition, not all technologies have to be robust and predictable, but they must incorporate: adherence to documented requirements and expectations, “ease” of deployment, “ease” of “use”, the vendor’s adherence to industry and de facto standards, and customer preferences, (vendors, platforms, etc.). When considering new web infrastructure components, support functions will have to be created and developed from “scratch”; however, the more common and challenging practice of integration into an existing environment adds a significant amount of complexity to design, development, deployment, and support.
Change Business Processes and Business Models
The organization’s management must understand that their business is going to be changed due to new technologies and business models that change industry dynamics and redefine what both shareholders value and customers desire. To prepare for that, the organization should work on an operating philosophy to change business processes and business models. Shifts in technology are causing a number of changes regarding customers. Customers are no longer just viewers or listeners, but are active users of interactive services and information. Many companies are offering opportunities for customers to produce their own products and services by providing interactive mode. The easy access that buyers have to competitive information is placing pressure on prices and is encouraging customers to search for substitutes. New business models are emerging in every industry of the New Economy. In these emerging models, intangible assets such as relationships, knowledge, people, brands, and systems are taking center stage. The relationship and interaction of various stakeholders such as customers, suppliers, strategic partners, agents, or distributors is entirely changed. Moving into e-commerce may require a major change in the commerce models that businesses use. Because companies are creating value in new ways, they need new business models that accurately reflect 21st century business realities. The key to survival in the new e-business environment depends upon organizations’ ability to adapt to a new, more collaborative, corporate-competition model. Organizations have to shift from being product-centric to customer-centric, making customers a part of the organization. New marketing approaches of organizations must focus on long-term relationships and customization. Since most organizations are organized around product lines, one of the greatest organizational challenges is the art of being customer-centric.
Phase III -: Customers, Suppliers and Other Value Chain Partners
Go Beyond Boundaries-Focus on External Value-Chain
Focusing on external value-chain partners is a major aspect of transformation. Internal sign-offs are being replaced by external relationships, and more of what was done internally is now done externally. The drastic fall in Dow, Nasdaq, and MSDW Internet indexes indicates that even careful examination of value creation is not enough. Companies would need a successful e-transformation for their survival and growth, and in most of the cases, companies are not able to e-transform due to their old-model organizational structures, operations, and business mindsets. Not only does the organization need to implement and utilize new technologies, it needs to make significant changes to the way it manages its relationships with external stakeholders, customers, suppliers, and service providers. It also needs to develop a culture that embraces cross-functional teamwork. The company will need to develop sophisticated organizational capabilities that allow it to quickly take advantage of external changes and even drive external changes through the development of innovative business models.
Traditional businesses are having trouble competing today because their organizational structures are based on a business environment that no longer exists. As a result, they cannot move quickly enough for the e-business economy. To overcome this, businesses must begin assigning initiatives outside traditional organizational boundaries. This has always been a best practice to drive innovation, but now it needs to be implemented more broadly. Successful e-transformation is all about relying on new leaders, forcing executives outside their comfort zone, and requiring them to rely on other people in the organization.
Build and Adapt an Asset-Based Business Model
Every business uses a particular combination of assets to build a business model unique to its needs and goals. The e-transformation demands organizations to adopt new business models. In these emerging models, intangible assets such as relationships, knowledge, people, brands, and systems are taking center stage. For example, though not reflected in the balance sheet, employees and supplier assets are an important world of intangible value. Each component in the employee and supplier asset category, including all members of the supply chain, is considered a partner in producing products and services. Outsourcing, mergers, and alliances are the steps in acquiring asset base of customers, expertise, and brands to gain new efficiencies in the value. An organization’s new business model must consider these assets, both tangible and intangible, for value creation. They should not consider employees as expenses and customers as targets but both should be treated as partners. The organization can expand into new product or service markets, and change or develop new products to achieve value-creating synergies.