|Research approach and guidelines for usage|
|ECOMOD, a project funded by the German National Research Foundation (DFG), is aimed at supporting companies, especially small and medium sized companies (SME), with developing successful strategies to exploit the potential offered by the Internet and with implementing a particular strategy on the organisational level. For this purpose, we are adapting MEMO, a method for multi-perspective enterprise modelling. The resulting method, called E-MEMO, guides the development of infrastructures for E-Commerce by two process models. |
|A model of evolutionary stages in E-Commerce|
|An evolutionary model shows a long term path of development into E-Commerce. It includes four prototypical stages. In the first stage, online presence, a company uses the Internet only to present itself on one or more web pages. The following stage, initiation of transactions, requires to present information about products and, optionally, terms and conditions. With respect to procurement, the initiation of transactions can be supported by making use of suppliers' web pages or electronic market places.|
Performing transactions is at the core of E-Commerce. It includes the entire process from initiating a transaction to after-sales service. The level of automation may vary. However, media clashes should be avoided during the order management process. Similar to the previous stage, it applies to both, sales and procurement.
The highest prototypical stage of evolution, cross-organisational value chains, corresponds to the vision of 'Collaborative Planning, Forecasting and Replenishment' (CPFR), propagated by the 'Voluntary Interindustry Commerce Standards Association' (see [VICS98]). It requires not only establishing cross-organisational business processes, which integrate processes and corresponding information systems on buyer and seller sides. In addition to that, it includes the synchronisation of plans, in order to decrease overall cost. If, for instance, a large shipping corporation, orders a part of its trucks a year in advance, the truck producer can decrease its cost by reducing risk. This is also the case for the truck producer's suppliers.
|A micro process for implementing E-Commerce initiatives|
|The long term evolutionary model for E-Commerce is accompanied by a micro process that provides a guideline for individual projects. The process includes five major steps:|
Each stage is described using the following structure: objectives, supporting concepts/artefacts, participants, documentation.
- analysis of strategic options (see working report No. 41),
- design/configuration of a strategy for E-Commerce,
- analysis of organisational options,
- selection/specification of business processes and
- implementation of business processes.
The decision network of strategies presented on this Web site supports the selection of strategies for E-commerce and bridges the gap between a business strategy and its implementation. For this purpose, we will consider a smaller scope of strategic options (as explained below), which are refined in a way that prepares for the following selection/refinement of business processes.The library of reference business processes on this Web site supports the fourth step of the micro process (i.e. selection and specification of business processes) and detailed process descriptions offer guidelines for process implementation.
|Focus of ECOMOD|
|There is an enormous range of possible strategic and organisational settings that some-how make use of E-Commerce. Therefore, feasibility reasons demand to focus on a sub range. Since E-MEMO is intended to be a generic method, we primarily focus on generic patterns of strategic design and their transformation into corresponding organisational settings. This excludes, for instance, strategies that are based on peculiarities of special products or customers.|
Within ECOMOD, the main approach to support the implementation of business strategies is on reference models of business processes. For this reason, our emphasis is on strategies that are being implemented through the (re-) design of business processes. In addition to these considerations, we suggest a focus that is defined by three dimensions (see figure below): generic strategy, evolutionary stage, and internal value chain.
|In his seminal work on strategic planning, Porter differentiates three generic strategies: focus, cost leader and product leader [Port85]. In this dimension, the focus of ECOMOD is on cost leader. This is for two reasons. Firstly, we assume that especially with SME, the potential for cost reduction through Internet technologies is of crucial importance for sustainable competitive advantages. Secondly, we assume that this generic strategy is better suited to find general patterns both for particular strategies for E-Commerce as well as for corresponding business processes. Focus and product leader require taking into account specific peculiarities of customer demands or products.|
With respect to the dimension evolutionary stage, we focus on performing transactions. We assume that this stage is of pivotal relevance for most SME for a number of years to come. Despite its potential, cross-organisational value chain will be too much of a challenge for many SME these days. Finally, there is the internal value chain. Particular aspects of E-Commerce may penetrate the entire value chain. Our focus is on procurement and sales. Note that we use a conceptualisation that is different from the one Porter suggested: procurement includes aspects of inbound logistics, and sales include outbound logistics. We do not take into account operations, such as production, especially because of the tremendous contingency of this activity.
|Integration of Strategies and Business Processes|
|The framework does not only support the stepwise refinement of business strategies. In addition to that, it promotes a tight integration of the strategic and operational level. Within ECOMOD, the operational level is mainly specified through business processes. Hence, there is need to integrate strategy models with business process models.|
|Integrating two systems - or two universes of discourse - implies the existence of common terms. The more specific these terms, or in other words: the more semantics they include, the higher the level of integration. In this context, we consider semantics very much as information content, i. e. the more possible interpretations of an expression are excluded, the higher its semantics. If, for instance, a particular strategy includes the term 'cost reduction' or a proposition like 'substantial cost reduction is mandatory', it leaves a lot of room for interpretation of how this should be realized on the operational level. This would be different with terms such as 'automated contracting within order processing'. However, the borderline between strategic and operational level is not static. The strategic perspective is aimed at concepts or propositions that are regarded to be essential for a successful evolution of a company. At the same time, it should exclude concepts or propositions that are subject to change, which can be replaced by functionally equivalent or better alternatives. Of course, the level of abstraction to choose for strategy design depends on the time frame. Within ECOMOD, the operational level is essentially defined by a set of generic business process models.|
|Hence, strategy design should eventually result in targets, guidelines, or aspects that can directly be used to describe|
- and eventually select - corresponding business process models (see figure below).