Enterprises As Systems William B. Rouse Overview • Definitions & Examples • Enterprise Challenges • Enterprise Transformation – Perspectives – Approaches – Solutions • Research Issues – Transformation Questions – Best Practices – Methods & Tools – Enterprise Technologies – Organizational Simulation – Investment Valuation – Organizational Culture & Change Enterprise Definitions • Enterprise: A goal-directed organization of resources -- human, information, financial, and physical – and activities, usually of significant operational scope, complication, risk, and duration • Other definitions: – A venture, particularly one of some scope, complication, and risk – A purposeful or industrious undertaking, especially one that requires effort or boldness – Industrious, systematic activity, especially when directed toward profit Statutory Definition Enterprise Examples • Proprietorship – Single Owner, Location • Company – Single Business Unit • Corporation – Multiple Business Units • Supply Chain – Supply, Mfg, Distribution • Market – Competing Supply Chains • Government – Laws, Taxation, Services • Economy -- Markets & Governments Enterprise Challenges • Underlying Phenomena • Strategic Management • Nature of Challenges • Relationships Among Challenges Underlying Phenomena • Most enterprises face similar challenges, although relative importance varies • Success of enterprises, and their leaders, strongly affected by these challenges • Multiple useful ways to address strategic challenges successfully • True nature of strategic challenges not determined by tools chosen to address them Nature of Challenges Enterprise Transformation • Framework • Examples • Perspectives • Approaches Examples • Changing Markets • Changing Offerings • Changing Perceptions • Changing Operations Ends: Changing Markets • Amazon leveraging IT to redefine book buying • DoD adopting effects-based planning & acquisition • e-Bay leveraging IT to redefine the resale market • FedEx defining the overnight mail market • NCR leveraging IT to redefine banking (via ATMs) • Wal-Mart leveraging IT to redefine the retail industry Ends: Changing Offerings • CNN redefining news offerings • GE moving from products to financing • Home Depot redefining hardware store offerings • HP attempting to redefine offerings in the printer market • IBM defining the business PC market (via outsourcing) • Motorola moving from radios to cell phones • Schwab redefining how people buy securities Ends: Changing Perceptions • Dell repositioning computer buying (via build to order) • Interface adopting green practices to reposition carpet buying • Southwest repositioning discount air travel • Starbucks repositioning coffee buying • Victoria’s Secret repositioning lingerie buying Ends: Changing Operations • American Cancer Society consolidating & integrating operations • Lockheed Martin merging three aircraft companies • Newell Rubbermaid resuscitating home products companies • Nucor decreasing the cost of steel making (via mini-mills) • Tennenco resuscitating Pemco Transformation Perspectives • Market and/or technology opportunities – the lure of greater success prompts transformation initiatives • Market and/or technology threats – the danger of pending failure prompts transformation initiatives • Competitors’ initiatives – others’ transformation initiatives prompt recognition that transformation is necessary to continued success • Enterprise crises – steadily declining market performance, cash flow problems, etc. prompt recognition that transformation is necessary to survive Transformation Approaches • Strategy Oriented – Markets Targeted, e.g., Global – Market Channels Employed – Value Proposition, e.g., Solutions – Offerings – Products & Services • Operation Oriented – Supply Chain Restructuring – Outsourcing & Offshoring – Process Standardization – Process Reengineering – Web-Enabled Processes Enterprise Solutions • ERP: Enterprise Resource Planning • MRP: Materials Resource Planning • CRM: Customer Relationship Mgt. • SCM: Supply Chain Management • SFA: Sales Force Automation Research Issues • Transformation Questions • Best Practices • Methods & Tools • Enterprise Technologies • Organizational Simulation • Investment Valuation • Organizational Culture & Change Transformation Questions • What Are the “As Is” and “To Be” Enterprises? • What Are the Drivers and Enablers of Change? • What Will Change Be Like? How Will It Feel? • What Will Change Cost? What Will It Be Worth? • How Will We Implement Change? What Are the Challenges? • Which Practices Are Best? Which Are Worst? Best Practices Research • Identification of Transforming Companies – Dynamic Filtering of Financial Filings – Review of Corporate Case Studies • Comparison of Transformers to Sectors – Financial Performance – Nature of Initiatives • Evaluation of Practices – Best Practices – Worst Practices Methods & Tools • Models – Formal Modeling of Organizations & Workflow • Methods – e.g., Lean, Six Sigma, BPR, TQM • Systems – e.g., ERP, CRM, SCM, SFA • Enterprise Transformation: Understanding and Enabling Fundamental Changes of Business Strategies, Processes, and Cultures Enterprise Technologies • Concepts – Mobile & Virtual Enterprises • Functions – Knowledge Mgt, Collaboration, Identity Mgt • Technologies – Agents, Biometrics, PKI, RFID • Organizational & Policy Implications – Interoperability, Security, Privacy, Cost of Ownership Organizational Simulation • Simulating Organizational Futures – Immersive, Interactive Experiences – Building on Games, Entertainment, Etc. – “Drive the Future Before You Write the Check” • Projects – R&D World – Office World – Infrastructure World – Lion City • Organizational Simulation: From Modeling & Simulation to Games & Entertainment Investment Valuation • “Big Bet” Investments – Science & Technology – Mergers & Acquisitions – Economic Development • Long-Term, Highly Uncertain Returns – Technology Risks – “Market” Risks • Investments as Options – R&D World – New Analytic Models Organizational Change • Understanding Fundamental Change in Context of Other Research Initiatives • Forces & Triggers of Transformation – Intentional Changes – Emergent Changes • Case Studies of Change – Retail Industry – Commodity Industries – Value-Centered R&D Management Enterprise Systems Research Transformation Questions • What Are the “As Is” and “To Be” Enterprises? • What Are the Drivers and Enablers of Change? • What Will Change Be Like? How Will It Feel? • What Will Change Cost? What Will It Be Worth? • How Will We Implement Change? What Are the Challenges? • Which Practices Are Best? Which Are Worst?