Chapter Five Chapter Five Constructing the e- Business Architecture: Enterprise Apps www.ebstrategy. com 2 - © e-Business Strategies, Inc. The Premise The Premise CEOs want next gen enterprise apps that make their businesses more competitive and deliver quicker benefits CIOs challenge: develop e-business architecture – Bridge chasm between customers, back-office operations and supply chain – Cost of the chasm: several million dollars in higher service costs and longer order-fulfillment cycles Application design and business design irrevocably linked – How you manage information determines whether you win or lose Companies manage information through business apps Central theme of e-business execution: Linking isolated business apps into a cohesive architecture www.ebstrategy. com 3 - © e-Business Strategies, Inc. The Vision The Vision Enterprise apps (ERP, CRM , SCM): well-integrated, modular building blocks for modern business designs – Common platform for apps in a given functionality – Backbone of modern enterprise Emphasis on enterprise apps grew in mid 1990s – To root out old legacy apps incapable of meeting stresses of the global economy Today, as companies race towards information economy, their structures are made up of interlocking business apps – Isolated, standalone apps are history Vision of e-business – How to integrate an intricate set of apps to manage, organize, route and transform information, like a well-oiled machine www.ebstrategy. com 4 - © e-Business Strategies, Inc. The Challenge The Challenge Not an easy to achieve vision – Failures more frequent that successes – TCI, Hershey Foods Reason: many solutions dead-on-arrival – Complexity of problems implies long lead times for solutions – But rapid morphing of problems demands short lifetime solutions App investment decisions rising to the top of mgmt agenda – Actual cost of enterprise apps greater than what firms anticipate www.ebstrategy. com 5 - © e-Business Strategies, Inc. The Implication The Implication When businesses apply technology to address new opportunities, bond between business design and application architecture grows closer – Steering this relationship urgent Senior managers must become corporate architects to shape the app infrastructure – Meet customers demands – Build lasting value by connecting business strategy with operational reality – Cannot afford to leave the task to developers and lower-level managers who don’t see big picture www.ebstrategy. com 6 - © e-Business Strategies, Inc. In This Chapter … In This Chapter … Take a multiyear planning perspective to – Identify important business and technology megatrends driving app architecture – Identify key areas of investment necessary to harness and exploit business apps www.ebstrategy. com 7 - © e-Business Strategies, Inc. Trends Driving e-Business Architecture Trends Driving e-Business Architecture Velocity of business increasing Enterprise boundaries disappearing Expectations for technology solutions rising Other internal IT events also happening – Integrating apps from mergers and acquisitions – Moving apps to the Internet – Moving apps from legacy systems to new platforms – Upgrading network infrastructure to handle high- bandwidth traffic – Building an integrated data model www.ebstrategy. com 8 - © e-Business Strategies, Inc. New Customer-Care Objectives New Customer-Care Objectives Integrated application architecture key to serving the customer seamlessly Amazon.com – Seamless buying and order fulfillment – Can potentially enable frequent inventory turnover For richer customer experience, firms need to integrate Web sites with their back-office systems – Inventory mgmt, order processing, financials, and customer service Companies must practice fundamentals of fast, error- free service – As customer become Internet savvy, their tolerance for wasted time and lack of integrated processes diminishes – Companies must refine business processes www.ebstrategy. com 9 - © e-Business Strategies, Inc. New Competitive Conditions New Competitive Conditions The changing competitive environment is driving the need for integrated apps New Brunswick Power – Deregulation and demand for better customer service began to strain existing apps – Forced to reevaluate business processes, esp. customer service functions www.ebstrategy. com 10 - © e-Business Strategies, Inc. Fast Moving Competitors Fast Moving Competitors Established firms forced to scrutinize existing app architecture – M&As – Compete with new entrants Norwest Mortgage Traditional Norwest Systems Required For Future Success Norwest’s Challenge Design the Future • Business and customer focused proactive • Structured in line with business support objectives • Shift in emphasis to front office support • Emphasis on business skills • Customer knowledge • Business knowledge • Strategic planning • Customer service philosophy • E-business must become a partner to the Business Units • E-business must be the engine for sales and growth • E-business must develop a customer focus and embed business knowledge • E-business must be the operational enabler of efficiency • Internally focused; reactive • Structured around technical • Chief role in providing back • Emphasis on technology skills [...]... Distribution Accounting/ Finance © e-Business Strategies, Enterprise Resource Planning SCM Apps: Visteon Realization – Streamline business to power recent entry into competitive auto parts market Strategy – Cut production development times – Reduce manufacturing time for parts – Gain more business from non-Ford sources © e-Business Strategies, Execution Challenge: – Current Excel sheets for production scheduling... & Warehousing Enterprise Resource Planning (ERP) Business Intelligence Marketing E M P L O Y E E S Admin Control HRMS / e-Procurement Supply Chain Management S t a k e h o l d e r s E-Business Strategies, Inc www.ebstrategy.com contact@ebstrategy.com 67 8-3 3 9-1 236 x201 Fax - 67 8-3 3 9-9 793 ... answers to mission-critical questions Growth driven by demand for more competitive intelligence and increases in electronic data capture and storage – Emergence of Internet enabled cost-effective access to and delivery of information to remote users throughout world © e-Business Strategies, Business Analytics (Filtering, Reporting) Data Capture & Datawarehousing Decision Support Systems Push-Based Delivery... get recorded in CRM for contract and warranty validation © e-Business Strategies, Solution – Custom interface Nortel’s interface an example of new breed of apps called connectors or EAI apps EAI apps essential in multivendor setting – When there are different vendors for front- and back-office apps BI, DSS, and KM Apps: Nortel Networks Enable both active and passive delivery of information from large... Inventory higher than needed Solution – Integrated SCM application SCM Apps: Visteon Benefits – Perform scheduling independently over 10 sequential prodn depts – Integrate scheduling with suppliers functions Multi-company SCM becoming a way of life Market Demand Resource & Capacity Constraints Real-Time Scheduling © e-Business Strategies, Supply Chain Management Selling Chain Management Apps: Whirlpool Realization... them accordingly – Traditional sales and pricing processes not prepared for this challenge New cross-functional app cluster called selling chain mgmt necessary © e-Business Strategies, Product Customization Pricing & Contract Management Quote & Proposal Generation Commission Management Promotion Management SellingChain Management e-Procurement Systems Apps: CIBC Realization – Empowering employees by... better deals with suppliers Strategy – Implement e-procurement system Office Supplies Procurement Service Procurement (courier, catering, contract workers) Business Travel Procurement Computer Equipment/Softw are/Networking MRO Procurement © e-Business Strategies, E-Procurement Applications EAI Apps: Nortel Networks Realization – Need better support for global customer service operations, to support... Integrated customer information l Integration of many legacy systems l Existing Legacy Systems l l l l l l l l Proprietary Developed in the 60’s or 70’s Mainframe based Developed in Cobol, Assembler Not real time Missing documentation No integration Lacking customer focus Process integration Slows down change and often impossible to change New Era of Cross-Functional Integrated Apps Successful e-business companies... high quality, consistent and efficient management of information Solution – Buy ERP app suite from SAP for order entry, purchasing, invoicing, and inventory control © e-Business Strategies, ERP Apps: Nestle’ Benefits – Integration of worldwide logistics – Shorter turnaround time from inquiries to delivery – Shift towards demanddriven production Forecasting & Planning Purchasing & Material Management... minefields: system related and organization related © e-Business Strategies, Contd … Organizational barriers – Too much focus on cost cutting and efficiency – Getting business units to understand why they need to use s/w – Rehashing competitors’ ideas – Frequently reorganizing – Placing too much emphasis on outside consultants © e-Business Strategies, System-related barriers Business Trends l l l l l Business . www.ebstrategy. com 13 - © e-Business Strategies, Inc. New Era of Cross-Functional Integrated New Era of Cross-Functional Integrated Apps Apps Successful e-business. business apps www.ebstrategy. com 7 - © e-Business Strategies, Inc. Trends Driving e-Business Architecture Trends Driving e-Business Architecture Velocity