Chp14 Tactical Execution

Mobilizing the Organization: Tactical Execution

Chapter FourteenChapter Fourteen

www.ebstrategy.com- 2 -© e-Business Strategies, Inc.

IntroductionIntroduction

Visionary companies consistently out-execute competition

– GE, Wal-Mart– Combine winning strategy, talent and execution to support

strategy, and integrated transition from old to new ways of doing things

This chapter’s focus: Execution– How, What and When

Fast turnaround of e-business projects will separate winners from also-rans

– Financial costs of delays or mismanagement huge– Lost opportunity costs of being late to market even higher– Kmart and example of bad e-business execution


Roadmap to Tactical ExecutionRoadmap to Tactical Execution

E-Business design and software projects must be closely intertwined

– e-Business requires well integrated processes that are built on software, not traditional foundation of people

– Do the tactical efforts support the business model?

– Do the tactical efforts reflect changes in thinking about the business model?

E-Business Roadmap

Vision & Strategy

Blueprint Planning

Tactical Execution

Adoption Management


E-Business Tactical ExecutionE-Business Tactical Execution

Technology and Application Capabilities

Organizational Capabilities and

Limitations

e-Business Blueprint

Tactical e-Project Management

Architecture and Implementation

Plan

e-Business Infostructure

Adoption Management

e-Business Development

Measurement for Evergreen

Strategy


Tactical e-Project ManagementTactical e-Project Management

•Transition to e-Business needs tightly coordinated approach

– Caveat: Traditional app execution characterized by number of groups working on various aspects of an issue but not talking

•e-Project mgmt to bring order to chaos•Different from traditional project mgmt because of new challenges

– Speed– Resources– Requirements– Release cycles– Technology

•Do the projects reflect changes in thinking about the business model?


Process OverviewProcess Overview

Define and Organize the

Project

Execution and Close Down

Plan the Project

Establish project team

Determine project objective

Assemble the project definition

document

Get project approval

Develop work breakdown structure

Develop project schedule

Gather detailed project

requirements

Analyze resources

Prepare cost analysis

Collect project status data

Complete project closing activities

Planning and Managing Projects

Conduct post project review

Maintain, Monitor and Control


The Intangibles: Continuous Project The Intangibles: Continuous Project CommunicationCommunication

A project communication plan necessary for a project to function like a well-oiled machine

– to keep mgmt, customers, and team members informed of project’s status and milestones at risk of being missed

– Identifies all persons concerned with the project and develops follow-up activities to keep them involved

– Assigns communication responsibilities and process for keeping everyone informed


e-Development Processe-Development Process

Opportunity Generation

Solution Evaluation

Customer Requirements

ResourceMobilization

Scope/Feasibility

Requirements Prototyping

e-Process Redesign

ImplementationMaintenance/

Support


Opportunity Generation: What Customer Opportunity Generation: What Customer Pain Are We Solving?Pain Are We Solving?

Projects must be built around opportunities for addressing customer needs

– Classify: Pain killer or vitamin?– Most significant opportunities also simple: transactions in

everyday life that could be simplified– Opportunities for relieving customer pain may be collected

passively, but firms should also generate opportunities actively

Many ways to identify opportunities– Annual mgmt brainstorming retreat– Let employees develop opportunities– Strategic document outlining opportunities: “slots”– Survey of customers by consulting firm

Few execs take customer’s perspective – Trying to reduce pain for themselves


Solution Evaluation: How Can We Alleviate Solution Evaluation: How Can We Alleviate the Customer Pain?the Customer Pain?

Element Questions

What •Which customer processes are involved?

•What is wrong?

•What is the opportunity in terms of customer problems, competitive pressures, internal inefficiencies, lack of new features in products, or unmanageable complexity in processes?

Where/When •Where do we observe the problem?

•Are there any service or infrastructure implications?

•Under what conditions do we observe the problem?

How big •How big is the problem/opportunity?

•What is the cost of these problems in terms of lost revenue, expenses, speed, or morale?

•How will we measure it?

•Will the solution require the customer to change process or culture?


Getting Detailed Requirements RightGetting Detailed Requirements Right

Successful e-business strategies fueled by deep understanding of the customer processes and pain points

– “Lack of attention at this step will cause problems downstream that result in project derailment.”

Failed strategies fueled by a lack of ability to see below the surface

– Technology changes quickly but underlying customer needs do not

Categories of customer requirements– Strategic, “forward thinking” that market has not asked for

yet– Customer-driven, “requested” requirements– Technology-driven– “Feature complete” requirements to add bells and whistles


DetailedRequirementsSpecifications

Getting Detailed Requirements RightGetting Detailed Requirements Right

Front end Prototyping

To Avoid Surprises

Scope &Priorities

RequirementsPrototyping& Elicitation

CustomerPriorities

Market Trends

Purchase/InteractionOccasion

Competitor Benchmarking

Market Research

Customer Pain

Customer Anger

Buyer Behavior

Functional Needs

Systems Economics


Setting ScopeSetting Scope

Determining scope and narrowing focus first, most important step in project

– Understanding scope essential to managing its development– Requires communication with customer to ensure correct

interpretation of the defined need and unambiguous wording of the responsive requirement

– Scope of many e-business projects fuzzy

Partition big problems into manageable chunks when scope too grandiose to overcome resistance

– Keeps team focused and interested– Achieve early victories to sustain momentum– Realize achievements and internalize at faster rate

Scope can be rigid or flexible


Garnering Resources: Mobilize, Mobilize, Garnering Resources: Mobilize, Mobilize, and Mobilizeand Mobilize

Resource mobilization

– Define project mgmt team, resources, and time line

Step 1: Organize project teams

Step 2: Resource planning and allocation

– Firms allocate resources for upfront activities, as strategy formulation

– But underestimate for downstream activities

InternalStaff &

Consultants

Strategy Formulation

Production Rollout, Maintain, Enhance and Change Effort

Infrastructure(Tools, Apps,

Software)

New Application

Development

Supplier/Partner

Integration

Well-budgeted bymost enterprises

Costs underbudgetedby 20% to 40%

Costs underbudgetedby 50% to 100%

BusinessStrategy

Blueprint Planning & Project

Management

Prototype Implementation


E-process RedesignE-process Redesign

• Identify the major processes (e.g., Order Fulfillment) that provide value. Take the customer viewpoint. • Identify key support processes (e.g., Content Management). • Map processes across functional boundaries.• Ask the “What-If” question (e.g., what if we changed the way we fulfilled the customer order?)

• Identify key points of contact with the customer for each process.• Identify customer pain associated with each key process.• Identify process variations that influence final output (customer expectations).• Ask “Are final outputs relevant? Is the customer looking for something different?”• Ask “What is preventing us from meeting or exceeding customer expectations?”

• Identify the major activities or building blocks of each process.• Identify all key inputs - information, data, or products - of each major activity. Ask “which of these are absolutely critical to the process?”• Identify all key dependencies of each activity. Ask “Is this dependency impacting the smooth flow of the process? What-if we removed/modified it?”• Diagram the entire process into a high-level map.

Identify Core Business Processes

Define Customers & Process Outcomes

Create Detailed

Process Map


Web Development: Prototype Validation and Web Development: Prototype Validation and ImplementationImplementation

• Detailed requirements prototyping

• Detailed architecture design

• Application development

• Quality assurance and testing

• Field testing

• Release management


Managing Outsourced Web Development Managing Outsourced Web Development ProjectsProjects

When choosing development partner, do so wisely

Make sure they align with you in each phase


Application Service ProvidersApplication Service Providers

IT managers seeking development solutions to relieve stress of too few qualified personnel to meet too many development needs

Enter ASPs, ex. Corio, Breakaway, US Internetworking– Provide power of large app frameworks as ERP– Maintain apps themselves– Growth due to better delivery of apps via IP networks– Offer everything from office essentials to massive apps– Large servers host apps in data centers, accessed via VPN

Attractive for companies with rapidly changing IT needs that don’t require highly customized software solutions

– Startup companies– Large corporations because of time-to-market issues, lack of

development resources, and a desire to lower maintenance costs


Infostructure ManagementInfostructure Management

Production infostructure least understood areas of e-business

– How to provide always-on-service and performance?

– Hosted models require emphasis on infostructure mgmt

– Very much like urban planning


Internet Data CentersInternet Data Centers

Internet creates unpredictable load on network services

– Newly introduced software can be ten times as popular as predicted

– New data-driven apps can increase storage system use beyond all projections

Data centers need adequate capacity available for 24x7x365, while minimizing capital outlay

Enter collocation firms– Exodus, Jam Cracker, LoudCloud– Group a company’s apps together on dedicated

servers in state-of-the-art NOCs


Capacity PlanningCapacity Planning

Online customer impatient

Predicting demand levels for network services difficult

Complexity of today’s networks make it difficult to isolate the driving force of demand for a particular service

Continuous, ongoing capacity planning process necessary

– Assess current physical infrastructure’s capacity– Measure and monitor traffic regularly to verify business

model– Use business model for long-range scenario planning

In capacity planning, don’t think just Web transactions– Think about how rich content affects capacity


ScalabilityScalability

• Impacts both the # of simultaneous users that can be supported and the service-level performance that users experience

• Hardware scaling vs. Indirect techniques

• Lot of hardware capacity may not solve problems with rich multimedia content

• Caching and Replication necessary to solve these issues


AvailabilityAvailability

Availability is accessibility of e-business operation: 24 hours a day, 7 days a week, 365 days a year

Techniques for maximum uptime– Clustering and replication– Process and business practices– Monitoring service deployments

Modularity of infostructure critical to attaining continuous availability


Security and Risk ManagementSecurity and Risk Management

Prevention of security threats far easier and less costly than responding

– Yahoo!, CNN, Amazon attacked in early 2000

Execs must pay attention to their companies’ network security

Execs must understand what their firms’ development organizations and hosting vendors are doing to identify and solving potential security problems

Security and disaster recovery plans go hand in hand– Important to think through various disaster scenarios and

have a plan for addressing each one– September 11, 2001


Adoption ManagementAdoption ManagementThree behavioral responses to overcome when introducing changes: Denial, Anger or Acceptance

Successful adoption needs– Communication plan– Transition mgmt plan

• Samsonite had conversion problems when implementing its new financial, manufacturing, and distribution apps

– Key performance indicators

Large projects affect change in three stages– Stage 1: Jobs redefined, new procedures established, apps

fine tuned, and users learn benefits– Stage 2: New skills executed, business structure changes,

processes integrated, add on technologies implemented – State 3: New tools and processes become almost second

nature to users; synergy of people, processes and technology


Measurement for Learning and ImprovementMeasurement for Learning and Improvement

How does a company know it is doing well post implementation?

What are some key measures important to a new e-business process

What should my company measure?– Risk– Financial– Loyalty– Fulfillment– Customer satisfaction


Key Take-AwaysKey Take-Aways

Technology changes, but NOT the fundamentals of economics

and strategy the difficulty of execution the constraints of human

behavior

Automate Transactions

Process Change

Top Line Growth

Bottom Line

Sustainability

E-Business Evolution in Corporations

E-Business E-Business Strategies, Inc.Strategies, Inc.

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Chp14 Tactical Execution