The implementation of Electronic Business (Electronic Ordering and Invoicing) influences the strategic position of companies. It enables organizations to communicate faster and more efficient with their trading partners. As such they become valuable partners for medium-sized and large companies that are already trading electronically, as well as for those considering making the leap into e-Business (e-Ordering and e-Invoicing).
Although there are many software solutions and service providers available companies should realize that implementing e-Business is still a considerable endeavor and should not be done 'overnight'.
The implementation of e-Business requires companies to align processes and information flows across inter-enterprise business partners. Therefore a good understanding of these (inter-) enterprise business processes, data exchange standards, communication and integration architectures, and last but not least legal and fiscal regulations is crucial. Furthermore companies should structure their implementation of e-Business as a global project, establish a shared vision on the future e-Business model and agree upon the implementation approach.
Organizations need a proven methodology to guide their implementation project from inception to onboarding. Such an e-business implementation methodology emerged in recent years from acquired knowledge and real lessons learned upon completing e-Business projects. The methodology is a framework that can be applied to all e-Business implementation projects irrespective of the type of business. The focus of the methodology is on creating a series of value-adding successes by taking small manageable steps aimed at enhancing the knowledge and confidence of the organization in e-Business.
The e-Business Implementation Framework consists of 7 stages:
- Vision Study (V.S.)
- Feasibility Study (F.S.)
- Start Up (S.U.)
- Initiate (I.P.)
- Execute (E.P.)
- Close (C.P.)
- Operate
In addition the framework provides ready-to-use project templates and practical guidelines.
Companies can go through the stages and execute the steps that are appropriate with respect to their personal situation. It is advised to go at least through the 7 stages and validate whether the desired deliverables are present in the company.
Vision Study
Before jumping on the bandwagon organizations need a better understanding of the available e-Business distribution models and solutions. Moreover it is imperative for companies to determine a broadly-shared vision on e-business. This vision should reflect the core values and common beliefs of the organization and present the aspirations and strategic direction for the future of the company.
As a first step organizations need to identify and bring together the main decision-makers from all departments and business units. These stakeholders are jointly responsible for defining the vision statement of the company. This task imposes a huge challenge upon participants and demands for an open and collaborative workspace where people are free to express their opinions.
A one-day vision workshop is an excellent way to establish an open and inspiring dialogue between stakeholders. Stakeholders will have to perform a variety of task-oriented activities to arrive at a strong vision statement. The outcome or deliverables of the vision workshop are:
- understanding of e-Business concepts
- overview of core values and common beliefs
- list of preferred e-Business models
- broadly-shared vision statement
The process of building a vision statement starts with learning to know e-Business concepts and understand the difference between business services and exchange services with respect to purchase-to-pay and order-to-cash processes. This knowledge and understanding enables stakeholders to determine their current position and identify their desired future model(s).
Working towards a broadly-shared vision requires stakeholders to align the values and beliefs of different organizational units that have their own identity and behavior. The stakeholders representing these units will have to set aside their differences and come up with one agreed set of core values and common beliefs. These values and beliefs should be formulated in the best interest of the company and its business partners.
During the process participants are encouraged to share the perspectives and experiences of their departments and to elaborate on their thoughts and ambitions. This open minded and collaborative spirit leads to creative and innovative ideas bringing out the best in people resulting in a list of preferred e-Business models.
At the end of the workshop a broadly-shared and sustainable vision naturally emerges from the collective mind-set of all stakeholders. Once the vision statement is formalized the stakeholders should determine the final list of preferred models and solutions, and define the goals (expectations) and objectives of the company with respect to e-Business.
The deliverables from the workshop provide the foundation and direction for the remaining activities in the Vision Study such as analyzing the maturity of the company.
After the Vision Workshop organizations need to get a better understanding of their Enterprise Architecture. This knowledge enables organizations to identify the models and solutions that they find most suitable for their company.
The Enterprise Architecture comprises two important domain areas that require further investigation:
- Business Domain
- ICT Landscape
Some organizations have already a clear view on these domain areas and only need to leverage their available knowledge. Others still have to investigate and describe their Enterprise Architecture.
With respect to e-Business these investigations will be high level with a strong focus on the core capabilities and consist of:
- Desk Research: the available information is studied and questions are prepared for the interview sessions.
- Interviews: architects and managers are interviewed to gather more information about the domain elements.
- Reporting: high level diagrams, process flows and models are assembled.
The core capabilities, called Foundation Capabilities, which form part of each domain, are:
- Business Domain
1) Organization
The organizational entities that operate and are responsible for the business processes, including governance and security. management teams, staff positions, roles, functions, competences, knowledge and skills are important to identify across the enterprise and trading partners, the external business environment.
2) Processes
The Business Processes that generate and support the flow of information and goods or services between two or more partners in a value chain. These are mainly Purchase-to-Pay and Order-to-Cash processes including sub-processes such as transport and tax reporting. Identifying the different processes and procedures as well as responsibilities is important.
3) Locations
The geographical location of business units and organizational entities e.g. Distribution Centers, Sales Offices and Manufacturing Plants.
[4) Governance]
[5) Security]
- ICT Landscape
1) Technology (Infrastructure)
The enabling technology that supports the operation of the processes and applications.
2) Information (Data and Standards)
The information architecture is about data & semantic interoperability. The data that is flowing trough the processes to accomplish the business functions and the standards used to support the information flows.
3) Applications (Systems)
The applications that enable the business processes to operate efficiently and handle the storage and retrieval of information.
The Enterprise studies are all about:
- What (data and entities)
- How (processes or functions)
- Where (locations and networks)
- Who (people)
- When (timing)
- Why (motivation).
Answers on these questions help in establishing a clear view on the maturity of the Enterprise Architecture and form the basis for determining the possible alternatives in which the organization can evolve with regards to e-Business initiatives.
These investigations can be executed by Enterprise Architects or Independent Technology Consultants. In preparation of the Maturity Assessment Workshop they will prepare the findings of the domain studies and draft two or more strategies to present and discuss.
Maturity Assessment Workshop
The Assessment Workshop should result into stakeholders understanding the current position of their organization and agree upon the next steps.
During the workshop all participants have to formalize the maturity level of the company, define and agree upon the improvements they would like to achieve in the domain areas.
Depending on the maturity level of the company and the clarity of the company's position, opposed to their partner’s, different routes are possible.
The stakeholders will have to indicate the routes to be explored more in depth during the Feasibility Study.
Feasibility Study
The decision for going for e-Business is based on the financial gains (benefits) and the costs for implementing the suggested program or solution. Moreover the decision depends on the business rationale for undertaking the project as expressed in the Business Case.
The objectives of the Feasibility Study are to identify the impact of selected business models and solutions on the Enterprise Architecture (Impact Analysis) and to determine the costs and benefits of the different scenario's (Cost & Benefit Analysis). The main deliverable of the Feasibility Study is the Business Case.
The role of the Business Case is that of a communication tool to facilitate proper decision making by the target stakeholders. The Business Case serves as the primary document for decision-making and should provide evidence that the project is a good investment for the company. The format and size of the Business Case are irrelevant, instead brevity and clarity are more important.
The Business Case should justify:
- Why a project should be undertaken ?
- Why a company should invest in the project ?
- Why the project represents a worthy expenditure of the company's funds
The Business Case should be correct, concise and unbiased. The target audience of the Business Case are busy executives. The following elements should be included in a Business Case:
- Executive or Project Summary
- Objectives of the Project
- Stakeholders
- Alternatives and Preferred Approach/Solution
- Expected Benefits
- Costs
- Risk Assessment
- Basic Plan of work and timeline
For e-Business projects a Cost & Benefit Analysis (CBA) is more useful than an ROI Analysis because CBA attempts to quantify both tangible (quantitative) and intangible (qualitative) costs and benefits.
The Business Case for e-Business builds mostly on quantitative savings such as lower costs for printing and mailing, increased data quality and reduction of processing time. These are tangible benefits that people can assess before and after the implementation.
Intangible benefits should be kept separately from tangible benefits and weighed differently. Apart from that one should develop a Business Case taking into account the financial culture of a company. In some companies including intangible benefits in the Business Case is just inappropriate and should not be done.
The costs of e-Business projects depend largely on the chosen e-Business model and the maturity level of the company. The Impact Analysis help organizations shed some light on their maturity and help them in developing their personal roadmap.
The total costs for an e-Business roadmap contains:
- Cost of investigation and studies
- Initial costs for establishing the solution
- Cost of onboarding management
Qualitative benefits from process improvements or compliancy with future external business requirements are hard to translate into financial savings or earnings. However when such benefits are made financially they can play an important decision factor and therefore should be taken into account.
For example:
- Being ready for e-Business, in several trade relations, becomes an obligation. The potential loss can be significant for companies.
- e-Business models can help in strengthen the brand name (digital branding), extend customer experience and increase sales opportunities.
The Project Mandate and the Business Case are the most important deliverables of the Feasibility Study. They will determine the next steps of the project.
In most e-Business projects there are a few options:
1) No valid Business Case (There are no savings at all or the return on investment is too long).
2) Start an R.F.I to obtain more information about available solutions and costs.
3) Start an e-Business integration project with one or more partners
4) Connect to an e-Business network operator.
Starting an R.F.I. is an investigation or consultancy project which eventually leads to an implementation project. The main goals however are to learn more about the available business solutions and providers to be better prepared for defining a roadmap.
Starting up an e-Business project
When starting an e-Business project organizations should first appoint the Project Board Executive (Project Director) and a Project Manager. Both will be responsible for the success of the project and adoption of the results by the organization.
Organizations need to know that managing e-Business projects requires extensive knowledge of inter-enterprise business processes, international standards, business -to-business integration systems, legal and fiscal regulations. Moreover good understanding of supply chain management principles as well as strong communication and collaboration skills are essential.
In many companies sales and client management take the lead in starting these kinds of projects and provide the Project Director. The Project Director is fully accountable and responsible for the success and has the power to make all decisions.
When searching for a Project Manager look for Business Consultants that keep up with the ongoing innovations in the e-Business domain and with the developments at the level of the European Commission and local government. Opt for Business Consultants that have been involved in earlier stages. They already possess extensive knowledge of the processes, data, systems and organization.
As the first step the Project Owner and the Project Manager should carefully identify the senior decision makers to make up the project board. Most of these decision makers will have participated in the vision workshop and are convinced of the necessity of the project. However designing the Project Management Team Structure requires also involving stakeholders that question the need of the project.
Project Managers are advised to set up a Reference Team, which acts as a reference control board and is able to validate the impact of proposed changes on operation. The Reference Team consists of operational team leaders whom will support adoption of the project results. They will also need to take away the doubts of certain stakeholders.
It is also good and beneficial to install a Quality Assurance Team to monitor the quality of deliverables. When the team is headed by the manager accounting and/or human resource management they can also ensure budget and resourcing issues are adequately managed in a timely manner reducing uncertainty and eliminating responsibility discussions. As an example: Negotiations and discussions about availability and rates of resources should not be a task of the Project Manager instead Resource Management should take care of these. However Project Managers may not neglect these because they are responsible for the budget(s).
Based upon above considerations a typical Project Management Team structure looks as follows:
Please stay tuned more will follow in the next coming months after the holidays
Last updated: 26-11-2011
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