E-Biz Trends and Applicationsppt).pdf · E-Biz Trends and Applications. Syming. Hwang . National ....

2004/102004/10 http://http://www.syming.nccu.edu.twwww.syming.nccu.edu.tw ©© All Rights ReservedAll Rights Reserved 11

EE--Biz Trends and ApplicationsBiz Trends and Applications

SymingSyming Hwang Hwang National National ChengchiChengchi University University

64 Chi64 Chi--Nan Rd. Sec#2Nan Rd. Sec#2Taipei, TaiwanTaipei, Taiwan

[email protected]@nccu.edu.tw

2004 APEC 2004 APEC InformatizationInformatization WorkshopWorkshopfor Small and Medium Enterprisesfor Small and Medium Enterprises

October 11 – 21, 2004Seoul, Republic of Korea

2004/102004/10 22http://http://www.syming.nccu.edu.twwww.syming.nccu.edu.tw ©© All Rights ReservedAll Rights Reserved

SymingSyming HwangHwang

1986/08~1990/071986/08~1990/07Assistant Professor, School of Assistant Professor, School of Management Management

Univ. of Texas at Dallas Univ. of Texas at Dallas

nownowProfessor, Dept. of Business Professor, Dept. of Business AdministrationAdministration

National National ChengchiChengchi Univ., Univ., TaiwanTaiwan

ExperienceExperience

19841984Master of Industrial EngineeringMaster of Industrial EngineeringUniv. of California, BerkeleyUniv. of California, Berkeley

19861986PhD of Business AdministrationPhD of Business AdministrationUniv. of California, BerkeleyUniv. of California, Berkeley

EducationalEducational BackgroundBackground


SymingSyming Hwang Hwang ---- As a Member of As a Member of Advisory/Assessment Committee of Advisory/Assessment Committee of Hundreds of Projects Including:Hundreds of Projects Including:

HuaHua--Nan Venus PlanNan Venus Plan--Global Global eFinancialeFinancial ServicesServicesThe The eBusinesseBusiness Project: for the IT and other Major Manufacturing IndustriesProject: for the IT and other Major Manufacturing Industries (Chair)(Chair)Facilitating CrossFacilitating Cross--Border Paperless Trading and Customs ClearanceBorder Paperless Trading and Customs Clearance

2003 2003 eASIAeASIA Award WinnersAward Winners

Global Supply Chain Community Service Global Supply Chain Community Service –– viaHubviaHub

Vitamin C (cash)Vitamin C (cash)--Supply Chain eSupply Chain e--Financing Project (Chair)Financing Project (Chair)

Pioneering Semiconductor Value Chain Integration TSMCPioneering Semiconductor Value Chain Integration TSMC--ASE eASE e--Supply Chain Supply Chain Project (Chair)Project (Chair)

““On DemandOn Demand”” AA Revolutionary Step in the Paper Manufacturing Industry for the Revolutionary Step in the Paper Manufacturing Industry for the New Century (Chair)New Century (Chair)

2004 2004 eASIAeASIA Award ContestantsAward Contestants


Lecture OutlineLecture Outline

ⅠⅠ IntroductionIntroduction

ⅡⅡ EE--Business Approach to Help Business Approach to Help SMEsSMEs

ⅢⅢ EB Cases of Taiwan EB Cases of Taiwan SMEsSMEs

ⅣⅣ Roadmaps to the Roadmaps to the IInformatizationnformatization

ⅤⅤ DiscussionsDiscussions


ⅠⅠ.. IntroductionIntroduction--EE--Business Business TTrendsrends

--ICT ICT UUsesedd by by SMEsSMEs in Taiwanin Taiwan


EE--Business Business TTrendsrends

ERP & CRMERP & CRMSCM & Global LogisticsSCM & Global LogisticsCPFR (Collaborative Planning Forecasting and CPFR (Collaborative Planning Forecasting and Replenishment) and Collaborative DesignReplenishment) and Collaborative DesignEDI => XMLEDI => XMLRFID (Radio Frequency RFID (Radio Frequency IDentificationIDentification) ) TechnologyTechnology


ICT ICT UUsesedd by by SMEsSMEs in Taiwanin Taiwan

Accounting SystemsAccounting Systems

POSPOS

LAN & InternetLAN & Internet

Simple Function ERPSimple Function ERP

WebsiteWebsite


ⅡⅡ.. EE--Business Approach to Help Business Approach to Help SMEsSMEs

--The GeneticThe Genetic--Code Approach to Identify Code Approach to Identify Needs for EBNeeds for EB

--The Types of EB NeedsThe Types of EB Needs

--The Government Programs to Help The Government Programs to Help SMEsSMEs


The GeneticThe Genetic--Code Approach Code Approach to Identify Needs for EBto Identify Needs for EB

It uses a set of 0It uses a set of 0’’s and 1s and 1’’s to code an s to code an SMESME’’ssmost important business activities.most important business activities.

Pilot studies began in 1999Pilot studies began in 1999

Large scale studies:Large scale studies:640 companies studied in 2002.640 companies studied in 2002.700 companies studied in 2003.700 companies studied in 2003.


ObjectivesObjectives

To find a quick and easy way that help policy To find a quick and easy way that help policy makers identify the most important Emakers identify the most important E--Business Business infrastructure to be constructed. infrastructure to be constructed.

To identify the To identify the SMESME’’ss asas--is and tois and to--be business be business strategy model. strategy model.

To find the common IT requirements for a To find the common IT requirements for a group of group of SMEsSMEs..


The ResultsThe Results

1.1. Ten business activities cover most valueTen business activities cover most value--added activitiesadded activities

J. Customer ServicesE. Manufacturing

I. Sales to ConsumersD. Manufacturing Outsourcing

H. Sales to Intermediaries C. Finished-Product Procurement

G. Sales to ManufacturersB. Material Procurement

F. LogisticsA. Design & Development


The ResultsThe Results2.2. Most Most SMEsSMEs perform OEM/ODM activitiesperform OEM/ODM activities

5652479260287334338166170387257Total

1320144573132210111211Papers

702812507067126821Plastics

3038221111212141619Sporting

Goods

7509071594412285452Toys

64616421610472195544Shoes

268815172418342024Electronics

9047523427524627550Knitting

781972251777107846Hand tools

Sets ofActivitiesJIHGFEDCBA


The ResultsThe Results3.3. Each companyEach company’’s genetic code can be identifieds genetic code can be identified

Manufacture

Outsourcings

Manufacturing

Logistics

Sales to M

anufacturers

Sales to Interm

ediaries

Sales to C

onsumers

Custom

er Services

Design &

D

evelopment

Material

Procurement

Fin-Prod Procurem

ent

JJIIHHGGFFEEDDCCBBAA

0000001111110000110

883311

0


The ResultsThe Results

484875751919222241415555

Number of CompaniesNumber of Companies

Domestic TradersDomestic Traders

ExportersExporters

Suppliers to Lead Suppliers to Lead ManufacturesManufactures

CharacteristicsCharacteristics

094094098098164164364364138138338338

Genetic CodeGenetic Code

4.4. ＭＭany companies share the same genetic codeany companies share the same genetic code5.5. There are typical business models in each industryThere are typical business models in each industry


The Types of EB NeedsThe Types of EB Needs

Most Most SMEsSMEs belong to one of the following belong to one of the following three categoriesthree categories：：

–– SMEsSMEs that are suppliers to lead manufacturesthat are suppliers to lead manufactures

–– SMEsSMEs that are exportersthat are exporters

–– SMEsSMEs that serve domestic consumer marketthat serve domestic consumer market


The Government Programs to The Government Programs to Help Help SMEsSMEs:: SMEsSMEs as Suppliers to Lead as Suppliers to Lead ManufacturersManufacturers

Key to success: closely link to lead Key to success: closely link to lead manufacturers => supply chain functionsmanufacturers => supply chain functions

ⅠⅠ : Purchase Order: Purchase Order ---- Project A & BProject A & BⅡⅡ : Payment & Financing: Payment & Financing ---- Project CProject CⅢⅢ : Logistics: Logistics ---- Project DProject DⅣⅣ : Design: Design ---- Project EProject E


The Government Programs to The Government Programs to Help Help SMEsSMEs:: SMEsSMEs as Exportersas Exporters

Key to success: reach and serve international Key to success: reach and serve international buyers => ebuyers => e--marketing & international supply marketing & international supply chain functionschain functions

ⅠⅠ : Industrial E: Industrial E--Marketplaces Marketplaces ⅡⅡ : Industrial E: Industrial E--Catalog StandardCatalog StandardⅢⅢ : Global Logistics Infrastructure: Global Logistics Infrastructure


The Government Programs to The Government Programs to Help Help SMEsSMEs:: SMEsSMEs as Domestic Tradersas Domestic Traders

Key to success: sales, marketing and services t Key to success: sales, marketing and services t => demand chain and CRM => demand chain and CRM

ⅠⅠ : Collaborative Planning Forecasting and : Collaborative Planning Forecasting and Replenishment (CPFR)Replenishment (CPFR)

ⅡⅡ : RFID infrastructure: RFID infrastructureⅢⅢ : Internet: Internet--based CRM software for based CRM software for SMEsSMEs


ⅢⅢ.. EB Cases of Taiwan EB Cases of Taiwan SMEsSMEs

--Case Case ⅠⅠ : : SMEsSMEs as Suppliers to Lead as Suppliers to Lead ManufacturesManufactures

--Case Case ⅡⅡ : : SMEsSMEs as Exportersas Exporters

--Case Case ⅢⅢ : : SMEsSMEs as Domestic Tradersas Domestic Traders


Case Case ⅠⅠ –– SMEsSMEs as Suppliers as Suppliers to Lead Manufacturesto Lead Manufactures

Project B Project B –– To build up an eTo build up an e--Supply Chain Supply Chain system of domestic IT leading manufacturers system of domestic IT leading manufacturers with their upstream suppliers, 15 domestic ewith their upstream suppliers, 15 domestic e--Supply Chains were constructed.Supply Chains were constructed.

Project C Project C –– To build an electronic financing and To build an electronic financing and cash flow system among the leading IT industry cash flow system among the leading IT industry companies, the suppliers, and the banks.companies, the suppliers, and the banks.

Suppliers

Leading Mfg. Co.

Portal of Leading Mfg. Co.Transaction

Banks

Portal of Banks

Transaction InformationFinancing

Credit

Project BProject C


Performance MeasuresPerformance Measures

Results of Project B by Jun. 2002Results of Project B by Jun. 2002

Improvement of Procurement ProcessImprovement of Procurement ProcessManpower: 40.6%Manpower: 40.6%Lead time: 56.7%Lead time: 56.7%Efficiency: 57.1%Efficiency: 57.1%

Supplier: 4235Supplier: 4235Leading Mfg. Co.: Leading Mfg. Co.: 15 15


Performance MeasuresPerformance Measures

Results of Project C by Jun. 30, 2004Results of Project C by Jun. 30, 2004

AccumAccum. Amount of e. Amount of e--Finance: US$ 1.06BFinance: US$ 1.06B( NT$ 36.2B)( NT$ 36.2B)

Supplier: 4421Supplier: 4421

Leading Mfg. Co. IT Industry: 108Leading Mfg. Co. IT Industry: 108NonNon--IT Industry: 185IT Industry: 185

Bank:Bank: 88


Benefits to Benefits to SMEsSMEs

Online paperless P.O. from lead manufacturesOnline paperless P.O. from lead manufacturesFinancing without collateral is automatically Financing without collateral is automatically available according to the online available according to the online Transaction Transaction InformationInformation, such as P.O., G/R, Inv., , such as P.O., G/R, Inv., A/RA/R…………(Information to replace Risk)(Information to replace Risk)Financing terms are much favorable (usually Financing terms are much favorable (usually 50% off) (Information to reduce Cost)50% off) (Information to reduce Cost)


Case Case ⅡⅡ –– SMEsSMEs as as ExportersExporters

2004 Industrial E2004 Industrial E--Marketplaces Project Marketplaces Project –– Hand Hand Tools, Fasteners, and Forging Car Parts IndustryTools, Fasteners, and Forging Car Parts Industry–– To construct a eTo construct a e--marketplace platform in order to marketplace platform in order to

integrate related industrial associations & buyers integrate related industrial associations & buyers –– To develop industrial standard eTo develop industrial standard e--catalog and catalog and

procurement procedureprocurement procedure–– To promote transactions over the eTo promote transactions over the e--marketplace marketplace

platform and diffuse the synergy of the virtual platform and diffuse the synergy of the virtual industrial clusterindustrial cluster



To lower the sourcing cost & time for buyersTo lower the sourcing cost & time for buyers

To unify eTo unify e--catalog standard and procurement catalog standard and procurement procedure for the industryprocedure for the industry

To promote membersTo promote members’’ interaction within interaction within association and among associations in order to association and among associations in order to create synergycreate synergy

Join marketing but independent virtual storeJoin marketing but independent virtual store


CaseCaseⅢⅢ–– SMEsSMEs as Domestic as Domestic TradersTraders

J.P. Computer Ltd. Collaborative EJ.P. Computer Ltd. Collaborative E--Commerce Commerce Project Project –– Collaborative Planning, Forecasting, and Collaborative Planning, Forecasting, and

Replenishment Mechanism with major SuppliersReplenishment Mechanism with major Suppliers

–– Collaborative Repair Mechanism with SuppliersCollaborative Repair Mechanism with Suppliers

–– To Construct a Procurement Platform for small To Construct a Procurement Platform for small Suppliers Suppliers

J.P. Computer Ltd. Stores

J.P. Computer Ltd. Head Quarter

Major Suppliers

2. Sales Info. - POS

1. Collaborative Planning & Forecasting

Small Suppliers

Procurement Platform

3-1. Inquiry

3-2. Quotation

3-3. P.O.

3-4. P.O. Confirm

4. Goods Delivery

4. Goods Delivery

3. Delivery Notice

3-5. Delivery Notice

5. G/R Info.



To consolidate the relationship with the suppliers To consolidate the relationship with the suppliers Transparent information helps suppliers improve Transparent information helps suppliers improve inventory mgt. & production scheduling inventory mgt. & production scheduling To eliminate procurement operationTo eliminate procurement operationTo increase cash turnover ratioTo increase cash turnover ratioTo lower the inventoryTo lower the inventoryTo lower the risk of short supplyTo lower the risk of short supply


ⅣⅣ.. Roadmaps to theRoadmaps to theiinformatizationnformatization

--The ThreeThe Three--Tier Framework of ETier Framework of E--Business Business ModelModel

--The application of the ThreeThe application of the Three--Tier Tier FrameworkFramework


Electronic Business (Electronic Business (eBusinesseBusiness))

Definition:Definition:–– To transform an enterprise using To transform an enterprise using internetinternet

technologytechnology

Question:Question:–– What is What is transformationtransformation


Four Stages of the Enterprise Four Stages of the Enterprise Transformation by IT Transformation by IT

Term Technical Def. Managerial Def.

Automation Hardware、Machine Job Transformation

Computerization Data Processing Department Process Transformation

Informatization Database Enterprise ProcessTransformation

eBusiness Internet Trans-enterprise Process Transformation


Levels of TransformationLevels of Transformation

StrategicInnovation

OrganizationalRe-engineering

Process Re-engineering

IT Application

eBusiness

Informatization

Computerization

Automation


The ThreeThe Three--Tier FrameworkTier Framework

Business Model

Process Model

IT Model

Strategic Innovation

Organizational Re-eng. Process Re-eng.

IT ApplicationIT Infrastructure


The ThreeThe Three--Tier Framework Tier Framework

Successful Successful eBusinesseBusiness–– The enterprise presenting her Business Model through IT The enterprise presenting her Business Model through IT

Model Model

Process Model transfers the ideal of Business Model Process Model transfers the ideal of Business Model into the routine of IT Modelinto the routine of IT ModelThese three models are an integral wholeThese three models are an integral wholeExample:Example:–– DellDell’’s employees execute the integrate seamless operation s employees execute the integrate seamless operation

processes through processes through the IT systems behind the IT systems behind www.dell.comwww.dell.com, , and bring the and bring the Dell DirectDell Direct to the ultimate in efficiencyto the ultimate in efficiency


Business ModelBusiness Model

Strategic InnovationStrategic Innovation–– To define the enterpriseTo define the enterprise’’s position compared with s position compared with

other companiesother companies–– To deliberate upon ToTo deliberate upon To--be Model from Asbe Model from As--is Model is Model –– To create an innovative value to be shared among To create an innovative value to be shared among

involved participantsinvolved participants


Strategic InnovationStrategic Innovation

AsAs--Is ToIs To--BeBeBusiness Model Business ModelBusiness Model Business Model

To reTo re--think enterprisethink enterprise’’s values value--added activitiesadded activities

How to make multiHow to make multi--win situation?win situation?

+ Internet


Key Issues of Business Model Key Issues of Business Model

a.a. Change of the relationships among enterprisesChange of the relationships among enterprises

b.b. TradeTrade--off and resistanceoff and resistance

c.c. ReRe--engineeringengineering

d.d. Competition advantages and its sustainabilityCompetition advantages and its sustainability

e.e. The level of the project leaderThe level of the project leader


Process ModelProcess Model

To design the operation processes of the toTo design the operation processes of the to--be be business modelbusiness model

The procedures of transforming the asThe procedures of transforming the as--is is process into the toprocess into the to--be processbe process


Process ModelProcess Model

Internet plays a critical roleInternet plays a critical role

The major sources of performances The major sources of performances

Decides the degree of the accomplishment of toDecides the degree of the accomplishment of to--be be business modelbusiness model

The design of toThe design of to--be process, and the choice of Key be process, and the choice of Key Performance Indicators (Performance Indicators (KPIsKPIs) are two major tasks) are two major tasks


Key Issues of Process ModelKey Issues of Process Model

a.a. Change of the relationships among jobsChange of the relationships among jobs

b.b. Change of the job contents Change of the job contents

c.c. Time and costTime and cost

d.d. asas--is process is process v.sv.s. to. to--be processbe process

e.e. KPIsKPIs


IT ModelIT Model

Divided into two levels Divided into two levels -- IT Applications & IT IT Applications & IT InfrastructuresInfrastructures

The profundity of the use of IT Model decides The profundity of the use of IT Model decides the degree of success of the degree of success of eBusinesseBusiness


Key Issues of IT ModelKey Issues of IT Model

a.a. Choice of IT Application SoftwareChoice of IT Application SoftwareApplication Service ProviderApplication Service Provider

b.b. IT implementation and organization learningIT implementation and organization learningconstructing, testing, training, transferringconstructing, testing, training, transferringtraining, learning, guiding, constructingtraining, learning, guiding, constructing

c.c. Contents and prices of outsourcing jobsContents and prices of outsourcing jobs


Integration among TiersIntegration among Tiers

a.a. IT Model & Process ModelIT Model & Process Model

b.b. Process Model & Business modelProcess Model & Business model


The Application of the The Application of the ThreeThree--Tier FrameworkTier Framework

Dell DirectDell Direct

–– ““DirectDirect”” means the relationship between Dell and its means the relationship between Dell and its CustomersCustomers-- form PC individual users to international big form PC individual users to international big companiescompanies

–– In direct model, neither middleman nor retailer will cause In direct model, neither middleman nor retailer will cause unnecessary waste of time or cost, or deprive Dell of unnecessary waste of time or cost, or deprive Dell of opportunity to understand customersopportunity to understand customers’’ expectation.expectation.

–– Internet bring the Internet bring the Dell DirectDell Direct to the ultimate in efficiencyto the ultimate in efficiency


Industrial Value ChainIndustrial Value Chain

ＡＢＣＤＥＦＧＨＩＪ

Ｉ1

Ｉ2

Market D

emand

New

Product D

esign

System

Integration

Mfg. D

esign

Procurement

Manufacturing

Delivery

Marketing

Sale

Distri-bution

Services


Business Model of DellBusiness Model of Dell

Delegate ODM Manufacturer to design and manufacture bare-bone system and parts

Assem

bly

Delivery

Marketing

Sales &

Distribution

Services

Market D

emand


Process Model of DellProcess Model of Dell

End Users

ODM

Dell Demand Forecasting

Production Plan

Material Procurement

Goods Delivery

Module Stock

DellVMI Hub

System Assembly

Module Mfg.

Delivery

Sale Distribution

P.O.


ⅤⅤ.. DiscussionsDiscussions

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