VCIIT_eBusiness_Lecture28x

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5 Νοε 2013 (πριν από 3 χρόνια και 7 μήνες)

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Lecture 28

Electronic Business
(MGT
-
485)

Recap


Lecture 27


E
-
Business Strategy: Evaluation


The Evaluation Process


Organizational Control and Evaluation


Financial Evaluation

Contents to Cover Today


E
-
Business Strategy: Evaluation


Technology Evaluation


Human Resource Evaluation


Website Evaluation


Business Model Evaluation


E
-
Business Strategy Evaluation


Technology evaluation


Technology is one of the key drivers of e
-
business so it is
important for organizations to understand their current
position regarding the stage of technology adoption and
what can be achieved from it.


There are various different levels of e
-
business
applications and organizations will adopt those that help
achieve their objectives within the constraints of finance
and skills.


Most organizations start with general information on a
website then progress to having an internet presence.


The next stage is the development of distinct value
-
adding services for customers followed by the
integration of systems for supporting communications
and transactions with customers, suppliers and partners.

Technology evaluation


The final, most technologically demanding, stage is
the development and use of technology for
collaboration with suppliers and partners.


The key to a successful IT strategy is for managers
to understand exactly what technology is required
for helping the organization achieve its objectives.


Other technological factors will also feature in the
evaluation process including connectivity rates
among customers, suppliers and partners, access
to broadband and compatibility of systems used by
organizations and customers in different parts of
the globe.

Technology evaluation


The evaluation of technology includes the assessment
of the quality and capabilities of technology prior to
investment, and an evaluation of the performance of
the technology once it has been implemented.


The main factors comprising an evaluation process for
computer hardware include:


Capability


Cost


Reliability


Obsolescence


Scalability


Risk



Technology evaluation:


Capability


The capability of computer hardware will
determine the scope of use that it is put to.


Capability includes speed, capacity and
throughput.


An e
-
business has to evaluate what speed and
capacity is required for the volume of business
and the types of business it expects to handle
over a given period of time.

Technology evaluation:


Cost


The cost of acquiring and installing the technology
influences the decision about what type of technology
is appropriate within the set IT budget.


The cost of installation also includes the likely
disruption during the changeover from the old to the
new system.


The cost of putting into operation and maintaining the
hardware forms part of the evaluation of its
performance.


A set standard of performance relative to cost
projections will determine the cost effectiveness of the
chosen hardware.


This informs future decisions on choice of hardware.

Technology evaluation:

Reliability


The performance of the hardware is constantly
monitored and any malfunctions noted.


The information relayed to managers will include
the number of malfunctions, the type of
malfunctions and the time factor relating to
resolving the problem.


Managers will set a minimum threshold for
reliability and take action to replace the hardware
should it fall below the threshold.


Managers need to be satisfied that the problem
lies with the hardware and not with the people
who operate it.

Technology evaluation:


Obsolescence


The rate of technological advance in computing
hardware could represent a cost to organizations if
the suite of current computers becomes obsolete
or outdated relative to those used by competitors.


When evaluating the performance of the
technological infrastructure managers have to
account for the longevity of current stock and the
rate of obsolescence over given periods of time.


This will be closely linked to the types of activities
carried out within the organization and the
reliance on technology to carry out those activities.

Technology evaluation:


Scalability


As firms experience growth so the demands on
technology increase.


Vendors of IT systems will normally guarantee
scalability to set levels as part of the sales
agreement.


Scalability and reliability are linked and form
important measures of technological
performance in organizations that seek to achieve
growth and competitive advantage.

Technology evaluation:

Risk


Technology is the cornerstone of e
-
business and plays a
pivotal role in determining how successful
organisations

will be.


The greater the benefits of installing a new technology
infrastructure the greater will be the associated risks.


An e
-
business may seek competitive advantage by
investing and installing the very latest technology
nfrastructure
.


Managers need to weigh the benefits of being first to
roll out a more efficient system against the risks of
malfunction, installation or usability.

Technology evaluation



Organizations can reduce risk by installing new technology
incrementally.


Increasingly, organizations are taking advantage of the
convergence of technology and the integration of systems to
cut costs and improve efficiency.


The convergence of technology links voice, data, mobile and
video, and Internet Protocol (IP) sets an industry standard for
facilitating communications across different media.


The investment in new systems to take advantage of
convergence and integration would constitute a high risk for
many organizations but the risk of losing out may be even
higher.


Evaluating software uses similar criteria to evaluating
hardware.


Capability, cost, reliability and compatibility are as relevant to
software evaluation as they are to evaluating hardware.

Technology evaluation:



Factors that have to form part of the evaluation process
both before and after investment in software include:


Quality:
The software has to be free of viruses, have security
mechanisms built in to prevent improper use and be free of
errors in the program code


Efficiency:

The software should be a well
-
developed system of
program codes and it should not take up excessive memory,
capacity or disc space


Flexibility:

The software should be able to process all e
-
business
demands placed on it without requiring major modification


Connectivity:

The software should be Web
-
enabled for access to
internets, intranets and extranets;


Language:
The software must be written in a language that is
familiar to IT developers in
-
house;


Documentation:
The software must be well documented and
include items such as help screens, reports, forms and data
entry screens.

Technology evaluation:



The evaluation of technology, both before and after the
investment decision, is an important element in
determining an e
-
business strategy.


Since many of the activities that take place in an e
-
business are reliant on technology, the choice and
implementation of specific systems play key roles in
determining the success of the organization.


Consequently, evaluation of the performance of
technology is a continuous process, as is the testing of
new technologies before committing to investment.


Before deciding on such an important investment,
organizations have to ensure that costs and risks are
controlled and that training of staff, or the recruitment of
new staff, is in place to ensure immediate usability of the
new technology.

Human Resource Evaluation


One of the most commonly cited reasons managers
put forward for adopting e
-
business are the cost
savings that can be derived from reducing the number
of people employed.


E
-
business applications can process many jobs that
were previously undertaken by humans.


Many firms who have engaged in e
-
business seek to
employ fewer, but more specialized, workers.


The development of network organizations and virtual
organizations means that firms can cast their net much
wider to attract and recruit suitably skilled staff.

Human Resource Evaluation


The evaluation of human resources in e
-
business is undertaken at four different levels.
That are:


The evaluation of human resources policy;


The evaluation of the recruitment process in
attracting and retaining key skills;


The evaluation of human resource performance
against set targets;


The evaluation of feedback from human
resources.

Human Resource Evaluation:

Evaluating human resources policy and planning


Every organization has to develop and implement a
human resources policy.


The policy will incorporate the overriding criteria that
determine the type of skills and experience the
organization needs to attract, the reward system, the
training and staff development process and the system
for monitoring, assessing and appraising staff
performance.


There are wide differences in approach to determining
the types of skills and experience required.


Much depends on the objectives of the organization, the
products or services produced and the strategy that is
put in place to achieve organizational objectives.

Human Resource Evaluation:

Evaluating human resources policy and planning


The type of skills and experience sought by firms in e
-
business
may cover specialist activities including:


Web design:
design web structure, graphics and navigation


Web developer:
initiates web
-
based projects, programming


Webmaster:
managing and developing the website using web
technology


Computer technician:
solves computer problems and ensures
hardware and software reliability


Online marketer:
manage online marketing and promotional
campaigns


Network manager:
controls and co
-
ordinates staff across the network
organization


Project manager:
develops, controls and manages the delegation of
projects to teams of workers


Logistics manager:
manages the electronic control of inbound and
outbound logistics.

Human Resource Evaluation:

Evaluating human resources policy and planning


In modern e
-
business working environments the reward
system is likely to go well beyond simple financial reward
for time spent in the office.


Rewards will reflect innovation, creativity and contributions
to developing new products and services and ways of
improving internal efficiency.


This may include promotion, peer acceptance, greater
autonomy in work scheduling or greater decision
-
making
powers.


The evaluation of human resources also entails reflecting
on how closely matched the actual human resources
performance is to the forecasts for human resource needs.


Human resource needs form part of human resource
planning.

Human Resource Evaluation:

Evaluating the recruitment process


An e
-
business has to be able to attract and retain skilled
staff
who possess
the correct qualifications and
experience to add value to
the organization
and help
achieve the stated objectives.


The
aim of the recruitment process is to find the right
people
for the
right job.


First
, the process begins with a job analysis where
all
relevant
information on the tasks, duties and
responsibilities
is gathered
and interpreted.


This
is followed by the compilation of a
job description
that
summarizes
the specific tasks, duties and
responsibilities.


Lastly
, the job description details the knowledge,
skills,
qualifications
and experience required to perform the tasks,
duties and
responsibilities to a satisfactory standard.

Human Resource Evaluation:

Evaluating human resource performance


All
staff should add value to the
organization
and
be
prepared
to use their skills, experience and expertise to
contribute to
the
organization
achieving stated
objectives.


The rigor
to which performance appraisal is undertaken
varies between
different types of
organizations


It is
important to
put in
place a formal appraisal system
so that set standards are
widely known
, employees
understand the benchmark performance
expected and
managers can observe when performance falls below
standard and
take
action.


Information systems have opened up the possibility of
constant monitoring of performance in many work tasks.

Website Evaluatio
n


In e
-
business it is the website that generates interest
from
customers and
drives the business model.


The
design and application of
the website
is of vital
importance to
organisations

engaged in
e
-
business and
e
-
commerce.


The first step in developing an effective website is to ensure
the design is attractive to browsers. The
design has to
capture the attention of users.


Secondly
,
the website
has to be easily navigated. Internet
users will quickly move
on
if they are unable to work their
way around the website quickly
and efficiently
.


Thirdly
, the website has to offer fast access to
information
required
by internet users.


Finally
, the website needs to offer
24
-
hour access
and
security.

Website Evaluatio
n


Website Performance Indicators


The
number of ‘hits’ on the website by potential
customers


The
length of time the potential customer stayed with
the website


Which
types of products or services were viewed
by potential
customers


The
navigation of the website, whether one
-
stop or
multiple
browsing


The
number of ‘hits’ transformed into actual
sales


The
value of sales
made


The
types of products and services
sold


The
number of repeat
customers


The
characteristics of customers


age, gender,
employment,
location
,
etc.


Comparisons
between website performance indicators
in one
time
period set against another similar time period.

Business Model Evaluatio
n


The performance of
the business model will be
continuously monitored and evaluated.


One of the purposes of creating a business model is to
generate revenue
so that the e
-
business can survive and
grow.


An
e
-
business will set targets for income generation over
a set
period of
time and compare it with actual income
received.


Even though the business model may not generate much
income in
the short term, managers in e
-
business must
remain true to
their convictions
and not abandon the
business model too early.


Unless an
e
-
business has first
-
mover or other market
advantages it can
take some
time for e
-
business models
to generate income.

E
-
Business Strategy Evaluation


The final part of evaluation should focus on the longer
-
term
aspirations
of
the e
-
business.


An
evaluation of e
-
business strategy
should determine
whether or not
the
organization
is heading in the
right direction
to achieve stated
objectives.


However
, there are a number
of
factors that make evaluating an e
-
business strategy distinct
from evaluating
the strategy of traditional
firms
that includes:


The
need for a full understanding of the capabilities
and attributes
of the
internet when applied to
business functions;


The
need to change the internet architecture in order
to measure
relevant
criteria


The
need to clearly define business processes as a distinct
e
-
business
activity


The
need to
recognize
that workgroups do not operate
in isolation
, but have
to
recognize
their impact on other
groups within
a network
organization


The
need to
recognize
that the impact of the
internet extends
beyond the
internal environment.

E
-
Business Strategy Evaluation


If the e
-
business is nearing, or is at the final
phase of a strategy
cycle then
analysis will focus
on where the
organization
is
positioned relative
to where they intended to be.


The
analysis should
reveal:


Where
the
organization
is currently
positioned


Where
the
organization
can be positioned given
current resources
and
capabilities


The
benefits of adopting different levels of
e
-
business


The
position that the
organization
should aspire
to


The
practical steps for implementing a new strategy
to achieve
competitive advantage.

E
-
Business Strategy Evaluation


The evaluation of the performance of an e
-
business
strategy will
focus on
the extent to which it achieves
stated long
-
term objectives.


Some examples
of strategic objectives
include:


Targets
for increasing market share (either overall or in
a
market segment)


Becoming
the technological leader in the industry
sector
(e.g
. Apple’s strategy for technological leadership in
browser applications)


Acquiring
the best skills (Microsoft maintain their
competitive advantage
partly through their ability to
attract
key workers
with key
skills)


Setting
profit targets (the phase of existing on
investor
goodwill
has passed and now more and more
e
-
businesses
set
specific annual profit targets
)

E
-
Business Strategy Evaluation


Managers have to address
a number of key issues relating
to the evaluation of
strategy that include:


The
extent to which existing strategies achieve
desired
outcomes


The
effectiveness to which the strategies were
executed


The
effectiveness to which the strategies were
communicated to
all
parties


The
accuracy of the internal and external
analysis


The
extent of managerial commitment to the
chosen strategy


The
depth to which alternative strategies were
analyzed


The
extent to which results were monitored, recorded
and
analyzed


The
level of proper diagnosis of
trends


The
level of consistency between strategic choice and
its
implementation


The
extent to which the strategy was properly resourced
.

Summary


E
-
Business Strategy: Evaluation


Technology Evaluation


Human Resource Evaluation


Website Evaluation


Business Model Evaluation


E
-
Business Strategy Evaluation