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The reference company is the oil giant Chevron. Because there is a growing demand for the development of Internet, intranet, and extranet business-to-business (B2B) transaction capabilities, the Stamford, Connecticut -- based Gartner Group predicts that by the year 2004 more than 50% of all enterprises will use the Internet for more than 80% of their external procurement activities. Meanwhile, almost every company offering products and/or services has developed or is developing Web sites ranging from information-only sites, known in the industry as "brochureware," to sophisticated Web-commerce sites where customers can select and purchase products ranging from music CDs to automobiles.
To make the transition to a successful E-commerce operation, nearly two-thirds (61%) of the 250 IT executives surveyed by Information Week Research say E-business has prompted the reengineering of the IT department. And about three-fifths (59%) say business processes and functions had to be reengineered. Most affected were technological skill requirements, employee training, and cross-functional job descriptions. But employee turnover and job satisfaction also changed as a result of E-business implementation. How successful a company is, centers around its E-business strategy and how well it handles the myriad of changes that E-commerce brings about. According to the Entraprise Group, companies that succeed in E-commerce share a few common traits. They support or re-architect internal business processes, have a measurable business objective, have top-level commitment to the program, and make a long-term investment in operations. They also integrate the initiative with existing sales and customer-support programs.
As an example of the organization overhaul for E-commerce, reference can be made to Chevron. The oil giant discovered the truth of the axiom that in the information technology field, only 25% of the challenge is technology, the other 75% is management. When the Houston company developed a supply chain to link the business, suppliers, and retailers nationwide via the Web, it faced significant management hurdles. Essentially, it was reinventing its business when referring to the automated supply chain and a state-of-the-art call center that the retail alliance had set up. The role of retailers in Chevron's business structure also is being elevated as a result of the new processes.
In terms of a smart business system perspective for an organization overhaul that includes E-commerce, there must be easy-to-use enterprise portals that are tied in with smart business software that is capable of optimizing a company's operations. Because traditional computer systems have been programmed with the exact number of steps required to perform a given task, their output is necessarily prescripted, and they are essentially incapable of doing what is really needed. The required overhaul utilizes a smart business system operating mode that is capable of optimizing functional as well as overall organizational operations, recognizing new patterns in the volumes of data, adapting to new information, knowledge, and intelligence as they arise and examining untapped sources for potential revenue and savings. Although the many optimization techniques have appeared in a number of smart business system software packages, other newer software approaches are coming on the horizon that will be aimed at bringing a new perspective to a typical organization. For example, artificial-neural networks are designed to learn by example and are capable of recognizing any new patterns in large volumes of data as well as adapting to new concepts and knowledge. This technique, like other optimization techniques, requires a new way of thinking about how to run an organization. Hence, an organization overhaul is generally necessary to implement a smart business system operating mode successfully.
Essential Steps to Ensure Ability to Support the Information Technology Needs of Chevron Successfully
Although there is no comprehensive approach nor is one anticipated in the near future to develop and implement smart business systems successfully, there are a number of suggested steps. Underlying all of these steps is the empowerment of a company's customers and employees to have a better understanding and more control over their total operations. The ultimate goal of a smart business system for a typical decision maker is not to do a better job of understanding the company's inner workings, but rather to optimize its operations so that the company is run more effectively as well as efficiently in the short to long run. The first step in developing and implementing one or more smart business systems is to obtain executive sponsorship (i.e., to identify a corporate sponsor). No smart business system will succeed without a strong advocate at the very highest level. Ideally, it should be the number one or two executive in the organization. If top management is not there, the system is not going to go very far. This is like trying to undertake development from a grass-roots perspective. Overall, getting started centers on obtaining the support of the president of a company or, at least, the support of the company's executive vice-president.
Appoint a Chief Information Officer (CIO) to Sponsor the Smart Technology
Additionally, sponsorship must go beyond a corporate executive sponsor and include a day-to-day operating sponsor. Today, this takes the form of a chief information officer (CIO), who makes the initial request for smart business systems and oversees their continuing development over time. Sponsorship means more than sitting back and saying, "I'm for this SBS project and will be its champion throughout the development process," and then delegating all of the work to others. A successful implementation requires a total commitment from the company's chief information officer. This person must equip the organization with the ability to respond to as-yet-unknown forces for change. That is, the chief information officer must question assumptions, learn new technologies, and thrive in the face of uncertainty. As such, the chief information officer must be capable of operating comfortably in either the business or technological areas of an organization (Earl, 1998).
Select an Experienced Team to Develop and Implement the Smart Business System(s)
The third step centers on the need to establish a project team that is capable of carrying out the implementation of smart technology on a corporate-wide basis. The head of the SBS project team should be knowledgeable and receptive to newer computerized systems, have a good understanding of storage for aged and real-time data, be receptive to applying newer smart software packages, and have a good understanding of the latest in computer networking. Ideally, the person should have the time to work on the project full-time, have an excellent understanding of both the organization's and management's decision-making needs, and have priority access to the chief information officer. Overall, the smart technology project head should have the proper credentials to head the team from the information systems department who are knowledgeable about optimization techniques, business intelligence, data mining, data warehousing, computer networking, and security issues, to name some important technologies, need to be recruited. Similarly, business analysts who are knowledgeable about formulating objective functions and constraints for obtaining optimal or near-optimal solutions to a company's problems or opportunities need to be recruited in order to compliment the information systems professionals. Ideally, the business analysts representing the various business/financial areas should be currently providing information, knowledge, and intelligence to the company's managers that focus on the accomplishment of a company's objectives, goals, and strategies.
Select an Effective Smart Business System Design Methodology
Underlying the appropriate methodology to develop a successful smart business system(s) is the consideration of whether to go with a "push" or "pull" philosophy for delivering optimized results to decision makers. If the push approach is utilized, this means that optimization of operations necessary for company employees, managers, or outside parties to do an effective job is relayed to their desktops. That is, optimization of operations, which is produced by the smart business system, is pushed forward to decision makers on a routine basis to assist them in their day-to-day tasks. In contrast, if the pull approach is employed,…[continue]
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