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How to Plan E-Business Initiatives in Established Companies

Many large and mature firms — which still form most of the economy — have difficulty analyzing the opportunities and difficulties created by the Internet. Here is a planning process, validated at several established companies, that puts e-business into perspective and helps make it manageable.

Over the past decade, Internet and Web technologies have remade the business world. E-business has dramatically changed how companies’ business processes are implemented and enhanced, altered industry structures, and shifted the balance of power between corporations and their suppliers and customers (both downstream partners and consumers).

Companies in every industry have had to evaluate the opportunities and threats presented by e-business. Although many “pure-play” or “born-on-the-Web” organizations have come into being, the economy still consists mostly of companies that were created well before the advent of e-business. For large and mature corporations, responding to these trends has been difficult. Even so, most e-business research has focused on new companies. From our academic research and work with various established, global corporations, we have developed a planning process that puts e-business into perspective and helps make it manageable. (See “About the Research.”)

About the Research »

The conceptual framework and approach underlying this article were the result of more than eight years of research involving a variety of corporations across the globe. At the core of the research is Electronic Commerce Architecture, an analytical model developed by the authors that enables businesses, technology providers and intermediaries to examine their roles in the online environment. Using ECA, we have explored how companies could support trade processes online, both conceptually and empirically, and have developed a typology of e-business processes that companies of all types can use to plan specific e-business initiatives for increased performance. This approach has been used to assist various established companies in planning for creating business value through e-business. To further validate the robustness of the approach, we have also examined online organizations such as electronic intermediaries (marketplaces and exchanges) over a three-year period.i In these studies, we have worked with senior management and engaged business directors across geographical regions in sets of workshops to identify sustainable initiatives. The studies have shown that the framework described in this article is both intuitive and useful as a basis for management planning and

analysis.

i. A. Basu and S. Muylle, “Customization in Online Trade Processes, ” IEEE Computer Society proceedings of the International Workshop on Advance Issues of E-Commerce and Web-Based Information Systems, Santa Clara, California, April 1999; A. Basu and S. Muylle, “Authentication in E-Commerce,” Communications of the ACM 46, no. 12 (December 2003): 159–166; A. Basu and S.

Amit Basu is the Charles Wyly Professor of Information Systems and chairman of the Information Technology and Operations Management Department in the Cox School of Business at Southern Methodist University in Dallas.Steve Muylle is a partner, associate professor and chairman of the Competence Center Marketing at the Vlerick Leuven Gent Management School in Ghent, Belgium. He is also the director of the school’s European Center for E-Business Studies. Comment on this article or contact the authors through smrfeedback@mit.edu.

1. G.M. Marakas, “Systems Analysis & Design: An Active Approach” (Boston: McGraw-Hill Irwin, 2004).

2. D. Besanko, D. Dranove and M. Shanley, “Economics of Strategy” (New York: John Wiley & Sons, 1999).

3. I. Jacobson, M. Griss and P. Jonsson, “Software Reuse: Architecture, Process and Organization for Business Success” (Reading, Massachusetts: Addison-Wesley, 1997).

4. M.C. Filibeli, O. Ozkasap and M.R. Civanlar, “Embedded Web Server-Based Home Appliance Networks,” Journal of Network and Computer Applications 30, no. 2 (April 2007): 499–514.

5. E. Brynjolfsson, Y. Hu and M.D. Smith, “From Niches to Riches: Anatomy of the Long Tail,” MIT Sloan Management Review 47, no. 4 (summer 2006): 67–71.

Tags: Business Development, E-commerce, Information Management, Market Strategy, Technological Innovation Reprint #:49110
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