DEVELOPING AN e-BUSINESS STRATEGY
FOR LESS-MATURE ORGANIZATIONS
A Design Research Approach
Tanai Charinsarn
University of New South Wales, Canberra, Australia
Keywords: e-Business, Strategic Planning, Design Research, EBSPS.
Abstract: This research applies a Design Research lens in developing a generic, yet customizable, set of tools to guide
less-mature organizations to start their transformation into e-Business: so called e-Business Strategic
Planning System (EBSPS). The EBSPS was developed through an extensive review of the e-Business and
strategic planning literature that established the parameters for the design of the system specifically for less-
mature organizations. The paper describes the use of the EBSPS in developing an e-Business strategy for a
large Thai commercial printer. The result was successful, with some improvements suggested for the next
round of EBSPS.
1 INTRODUCTION
e-Business is a term developed by IBM in 1990’s for
commercial purposes (Li, 2007). Despite many
definitions of e-Business, it can be simply described
as "all electronically mediated information
exchanges, both within an organization and with
external stakeholders supporting the range of
business processes" (Chaffey, 2002). While interest
in e-Business wound down during the ‘dot-com
crash’ because of the over-expectation of investors,
e-Business is still continues to grow (Li, 2007) and
becomes a way of doing business.
e-Business is a much broader concept than e-
Commerce or even Information Technology (IT)
because e-Commerce focuses only on using the
Internet to carrying out business transactions over
the Internet, and IT strategy focuses upon using IT
to support business processes, but e-Business aims
to transform business process to perform well in the
network economy. E-Business allows organization
to improve their efficiency through ‘speed of light’
value creation from collaboration both internally and
externally to reach potential customers globally at
low cost (Leibold et al, 2005). Also, a new Internet-
based business model could generate additional
revenue (Farhoomand, 2005). New demand can also
be created using a Value Innovation process (Kim et
al, 2005) in which e-Business could be an enabler.
Therefore, the potential for e-Business to generate
business value is huge.
As more people and businesses are connected to
the Internet, the potential of e-Business will be
significant. The survey conducted by
Internetworldstat.com (2008) confirmed that the
Internet population has grown substantially applies a
Design Research lens in developing a generic, yet
customizable, set of tools to guide less-mature
organizations to start their transformation into e-
Business: so called e-Business Strategic Planning
System (EBSPS). The EBSPS was developed
through an extensive review of the e-Business and
strategic planning literature that established the
parameters for the design of the system specifically
for less-mature organizations. The paper describes
the use of the EBSPS in developing an e-Business
strategy for a large Thai commercial printer. The
result was successful, with some improvements
suggested for the next round of EBSPS
.since the
start of the millennium. A similar trend is seen on
the value of e-Commerce not only in the U.S. but
worldwide (UNCTAD, 2002). The future of
business is moving away from the traditional off-line
mode. However, in the Internet world, early adopters
of e-Business, for example, Yahoo!, eBay, and
Google, usually gain a long-term advantage from
brand awareness and a leading position in the early
development of innovation. Therefore, there can be
pressure to become an e-Business quickly and
correctly the first time.
Although e-Business is seen in many
organizations, the development of e-Business
215
Charinsarn T. (2009).
DEVELOPING AN e-BUSINESS STRATEGY FOR LESS-MATURE ORGANIZATIONS - A Design Research Approach.
In Proceedings of the International Conference on e-Business, pages 215-222
DOI: 10.5220/0002190902150222
Copyright
c
SciTePress
strategy is still far from standard. With the rising
cost of mistake made in a highly competitive
business environment, there is a need to develop a
systematic approach to e-Business strategic
planning. Furthermore, as e-Business is indeed a
business transformation exercise, using strategic
planning framework is one approach that could lead
the more successful development of e-Business.
Strategic planning has been a much-interested
management tool since 1950s. While the interest
seemed to decline in the late 1980s because of the
disappointment with the business result (Marx,
1991), its benefits from the ‘strategic thinking’
exercise were clear. Whilst the business landscape is
changing more rapidly, the need for such a planning
exercise to avoid the cost of failure is increasing as
well. As a result, the Bain & Company survey
(2007) found that strategic planning has consistently
been the most used management tool since 1996.
There are different approaches to strategic
planning, such as vision-focused approach (Kaplan
and Norton, 2008), stakeholders-focused approach
(Poister and Streib, 2005; Kenny, 2005; Lewis,
2004), organization-focused approach (Rigsby and
Greco, 2003), fit-focused approach (Thompson et al,
2008), analytical-focused approach (American
Management Association 1995; Lake, 2006;
Wootton et al, 2001), alignment-focused approach
(Reading, 2002). Different approaches can be used
appropriately in different organizations and
situations.
Despite the long development of strategic
planning concept, there is a lack of a unified and
systematic process for developing an e-Business
strategy (Barua et al, 2008) in particular for a less
mature organization (Czuchry and Yasin, 2003).
The following parts of this paper will discuss the
special characteristics of less mature organizations.
Then the Design Research methodology will be
explained and linked into how e-Business Strategic
Planning System (EBSPS) is designed. Each element
of EBSPS will be discussed. A demonstration of
EBSPS in a less mature organization will be
elaborated. The result will be discussed and
compared against suggested Design Research
evaluation criteria. Lastly, conclusion will be drawn.
2 e-BUSINESS IN LESS MATUAL
ORGANIZATIONS
Because of these benefits of e-Business, global trend
of e-Business and relatively low cost of entry, e-
Business has the potential to level the competitive
landscape between large and small players. Despite
the fact that e-Business does not require many
financial resources, it requires e-Business
knowledge, and e-Business strategic planning in
particular, which is still not an established discipline
as there is no unified textbook on this discipline.
Less-mature organizations seem to be at
disadvantage because of their lack of experiences in
e-Business planning. Also, they usually face mixed
recommendations from e-Business vendors that have
biases towards the solutions. Even though they seek
advice from e-Business consulting firms, which is
usually costly, based on author’s years of consulting
experience, they still receive a generic roadmap not
tailor-made to their situation and needs.
3 USE OF DESIGN RESEARCH
Formally known as Design Science, the Design
Research methodology is chosen to develop EBSPS.
As a new discipline in the academic community, the
design research first appeared in ‘The Science of the
Artificial’ by Simon (1996) is providing a new
research perspective complementing positivist and
interpretive perspectives (Vaishnavi and Kuechler,
2004/5).
The design research aims to develop theoretical
knowledge from the action of designing and field
testing an artifact (Hevner et al, 2004; Van Aken,
2005). Artifacts consist of construct, model, method,
instantiation, or better theories (Vaishnavi and
Kuechler, 2004/5). While the discipline of the design
research is young and its community is still small,
design research has been well accepted in the
Information System community, such as Association
of Information System (AIS).
However, there is less interest in design research
in the management discipline (Gregor and Jones,
2007), despite the potential to solve utility problems
of the management system as design research aims
at application of artifact to solve real-world problem.
While most prominent ideas on Design Research are
similar, some would put more emphasis on artifact
and its utility (Hevner et al, 2004) and believe that
the knowledge will be create as a result. Another
would put more emphasis on the research process to
justify the created knowledge is justifiable (Gregor
and Jones, 2007) which can be seen in their
proposed Design Research evaluation guideline. In
this research, the two viewpoints were combined to
satisfy both goals of Design Research.
ICE-B 2009 - International Conference on E-business
216
Table 1: Philosophical Assumptions of Three Research Perspectives.
Source: Vaishnavi, V. S., & Kuechler, W. (2008). Design Science Research Methods and Patterns: Innovation Information and
Communication Technology. Boca Raton, FL: Auerbach Publication.
Table 2: Design Research Rigor Guideline Comparison.
Next, the e-Business strategic planning process was
designed to be appropriate for these parameters. The
tools and techniques were selected according to the
issues and power structure.
Finally, some participants were interviewed after
the workshop to evaluate the EBSPS in the area of
usability, usefulness, and acceptability.
4 DESIGN OF e-BUSINESS
STRATEGIC PLANNING
SYSTEM
EBSPS is designed with the belief that there is no
standard planning system for every organization
under any circumstances. Therefore, the EBSPS
must start by assessing design parameters which is
collected based on the literature review in the area of
strategic planning and e-Business. As design is a
search process (Hevner et al, 2004), design
parameters are selected based on relevance and
importance in the eyes of the designer.
EBSPS design parameters can be divided into
Macro and Micro levels. Macro-design parameters
are factors that describe the environment of the
organization, such as Information and
Communication Technology (ICT) infrastructure,
government policy towards e-Business, and national
culture. Micro-design parameters are factors that
describe the organization, such as organization
maxim, current issues, vision, organization culture,
organization and power structure, organization
readiness for strategic planning, organization
readiness for e-Business, and organization readiness
for changes. Macro-design parameters are used for
designing EBSPS while micro-design parameters are
used for customizing the EBSPS for each
organization.
The architecture of the EBSPS is shown in figure
1 with the following explanation.
Define participants: It is important to identify the
right people who craft strategy as well as execution
people (Reid, 1980; Nagel, 1984). The group size
between five to ten people tends to be effective
(Andrews and Johnson, 2002).
Organizational assessment provides Micro-
parameters for designing EBSPS for each
organization.
Organization Power: It is necessary to
understand the structure and its six basic
components (Mintzberg, 2003), four dimensions of
Research Perspective
Basic
Belief Positivist Interpretive Design
Ontology
A single reality Knowable,
probabilistic
Multiple realities, socially
constructed
Multiple, contextually situated alternative
world-states
Socio-technologically enabled
Epistemology
Objective;dispassionate
Detached observer of truth
Subjective (i.e., values and
knowledge emerge from the
researcher- participant interaction)
Knowing through making: objectively
constrained construction within a context
Iterative circumscription reveals meaning
Methodology
Observation;quantitative,
statistical
Participation; qualitative.
Hermeneutical, dialectical
Understanding:
situated and description
Developmental
Measure artifactual impacts on the
composite system
Axiology
what is
Of value
Truth:
universal and beautiful;
prediction
Understanding:
situated and description
Control; creation;
progress (i.e;
improvement); Understanding
Hevner et al. (2004)
Gregor and Jones (2007)
1. Design as an artifact 1. Purpose and scope
2. Problem Relevance
2. Constructs
3. Design Evaluation 3. Principle of form and
4. Research Contributions function
5. Research Rigor 4. Artifact mutability
6. Design as a Search 5. Testable propositions
Process 6. Justificatory knowledge
7. Communication of (Additional components)
Research 7. Principles of
Implementation
8. Expository instantiation
DEVELOPING AN e-BUSINESS STRATEGY FOR LESS-MATURE ORGANIZATIONS - A Design Research Approach
217
cooperation (Bai et al, 2003) and determine where
the power in the organization is.
Pressure: Organization always faces various
forces, both externally and internally, that would
drive the action (Lewis, 2004). Pressure can also be
described in term of Maxim which is a “short simple
statements of the business’s positions” (Broadbent
and Weill, 1997)
Figure 1: Architecture of EBSPS.
Readiness: Organizations have different level of
readiness. Therefore, the crafted strategy should be
different. Readiness can be viewed as capability to
perform or resistance. Organizational readiness in
aspects related to e-Business strategy will determine
the right strategy which is executable. Three areas
are considered in this research: Strategic Planning
readiness (Russell et al, 2005; Napier et al, 1998), e-
Business readiness (Czuchry and Yasin, 2003;
Ravichandran and Lertwongsatien, 2005), and
Change readiness (Hackbarth and Kettinger, 2000)
Macro parameters are those related to the
environment of the country. It is not company-
specific parameters. While there is an extensive list
of environmental factors to consider, three are
selected: ICT infrastructure, Government policy
(Chen, 2005) and Culture (Aladwani, 2001;
Holdstede, 1980; Komin, 1990)
Planning approach: Planning is one of many
ways to craft strategy (Mintzberg, 1998). Though
most planning approaches would fit into POWER
planning framework (Lewis, 2004), there are distinct
variation in focus and sequence of planning
activities. They can be categorized into six
approaches as mentioned earlier and one approach
will be selected.
Planning tools: Planning tools are used to frame
the content of discussion on certain areas. Extensive
list of planning tools was established as a toolbox to
choose from. Examples of planning tools are SWOT
analysis, Vision development, Corporate governance
model, Strategic issues, Strategic risk, Industry
analysis, Benchmarking, Gap analysis, etc.
Planning techniques: Planning techniques are
used to guide the discussion of the planning tools.
Similar to planning tools, extensive list of planning
techniques with description was established as a
toolbox. Examples of planning techniques are
Brainstorming, Buzz group, Case study (Russell et al
2005), Affinity diagram, and Las Vegas voting
(Napier et al, 1998).
In the cases where the tools and techniques
required pre-work - for example, data gathering - to
improve process efficiency and effectiveness, a pre-
work request was sent to the participants well ahead
of time. Then an agenda for a planning workshop,
built around the chosen techniques, was developed.
Evaluation reflects the performance of the
design, leading to the discovery of knowledge from
the design, and can be used to improve the artifact.
EBSPS, as an artifact, was evaluated on three
dimensions: Usability (Ramanujam et al, 1986),
Usefulness (Grover and Segar, 2003; Wang and Tai,
2003), and Acceptability (Lewis, 2004). The
learning from evaluation was collected and analyzed
in order to improve the EBSPS.
EBSPS would be beneficial to less-mature
organizations in e-Business which are defined as
organizations that have no process to handle e-
Business strategic planning. They may or may not
already have some e-Business applications in their
organizations already, but usually not the process.
EBSPS provides simple guideline to follow with a
small set of only important design parameters, yet
powerful result. It would help a less-mature
organization to start thinking about e-Business in a
systematic way. Even when used by an outside
consultant, EBSPS provides a guideline to tailor-
made the process to each customer easily.
5 A FIELD EXPERIMENT IN A
LARGE THAI COMMERCIAL
PRINTER
A field experiment is an essential part in Design
Research. Not only has it provided a test for
usability of the artifact, but also a feedback for
improvement which will continue to fine-tune the
artifact when many rounds of field experiments are
conducted. Therefore, it is important to expect that
the first field experiment would result in no perfect
result but plenty of areas for improvement.
The first field experiment was conducted on
ICE-B 2009 - International Conference on E-business
218
“Alpha”, which is a large Thai commercial printer
with a reputable brand name in the Thai market.
Alpha was established many decades ago when Thai
printing industry was just started by focusing on
textbook printing. It has grown continuously since
then. Currently, Alpha provides high quality printing
services for major domestic and international clients.
As a second generation organization, Alpha
possessed many old people who do not realize a
need to change. It business started to face quality
problem as well as losing its competitiveness. On e-
Business, Alpha has a limited Information System
(IS) capability as well as supporting financial
resources. However, the Managing Director has a
strong commitment to transform the organization by
applying modern management concepts.
After a series of interview with seven executives
which last between 30-60 minutes, the result
provided the big picture of the organization and the
EBSPS design parameters as follows.
Power structure: The power is centralized at the
Managing Director who is also the owner. The board
of director is his family members who do not have
involvement.
Maxim: Unclear. Its vision of ‘to be one of the
top five most profitable printing companies in
Thailand’ is vague with no specific directions on
how to achieve it. It was also found that determining
a maxim was hard to do by the management team.
Pressure: Organization always faces various
forces, both externally and internally, that would
drive the action (Lewis, 2004)
Organization readiness for strategic planning
Organization readiness Organization readiness
for change for e-Business
Figure 2: Organization readiness for Alpha.
Alpha has low Organization readiness for
strategic planning. It has never done a proper
strategic planning. While it has documented vision,
mission, and strategies, they are formulated from
group discussions among Top Management Teams
(TMT) without strategic analysis. Moreover, most
TMT members have no business management
educational background.
Alpha has low Organization readiness for e-
Business. The Management Information Systems
(MIS) department consists of three people and
mainly supports day-to-day operation of IT
equipment and the printing software. They are not
familiar with IS development work since they hardly
have anything beyond the Alpha website which was
developed by an outsider. Alpha has no experience
in IT outsourcing at all. The MIS team can only
support the existing system. Alpha’s IS
infrastructure is quite old, especially the system that
run the printing software because the version that
Alpha uses requires Window 98, which new
hardware does not support.
Alpha has low Organization readiness for
change. Half of Alpha’s staff are old and have a
tendency to resist change. With a current financial
liquidity issue, which causes a decline in staff
morale, it is hard to provide any incentive for
change. Besides, a cross-functional team to lead
change is not a part of the current work practice.
Based on these input parameters, the EBSPS was
designed for Alpha to use the vision-focused
approach for these three main reasons. First, Alpha’s
vision needs to be clarified before translating into e-
Business strategies. Secondly, as Alpha is a family
business with centralized power, it grows from the
vision of the leader. Once the vision is established,
the alignment should not be a problem. Lastly,
Alpha is not familiar with information gathering for
strategy formulation and not focusing on
competition.
In the workshop design, tools and techniques
were selected to fit with the planning approach and
duration, also considering Alpha strategic planning
readiness and e-Business readiness. For Alpha, five
tools are selected: SWOT analysis, vision
development, e-Business initiative menu,
prioritization, and road mapping. The proposed
again was the first application on EBSPS which
needs to be improved in further rounds of
application in the future.
These tools were used in a workshop with eight
participants and one observer participant for one full
day.
Evaluation was conducted one week after the
workshop by interviewing four selected people,
including the managing director. List of questions
were asked to assess usability, usefulness, and
acceptability. The overall result was satisfactory, as
shown in figure 3.
EBSPS has performed well in the area of
usability and acceptability, while has lower score in
the area of usefulness. Minor concerns, such as lack
LOW
LOW
LOW
DEVELOPING AN e-BUSINESS STRATEGY FOR LESS-MATURE ORGANIZATIONS - A Design Research Approach
219
of action planning and short working time on each
session, were mentioned and would be taken into
account into the next round of field experiment.
Table 3: Alpha’s EBSPS agenda.
Start Topic Duration Finish
8:30 Prep session for MD
on opening
9:00 MD opening 0:10 9:10
9:10 Agenda 0:10 9:20
9:20 SWOT discussion –
post it & round table
0:50 10:10
10:10 SWOT summary 0:10 10:20
10:20 Break 0:15 10:35
10:35 Vision 0:15 10:50
10:50 Vision drawing at
corporate level
0:15 11:05
11:05 Vision sharing and
identify keywords
0:30 11:35
11:35 Craft vision statement 0:25 12:00
12:00 Lunch 1:00 13:00
13:00 Printing industry
situation update
0:15 13:15
13:15 E-business
knowledge sharing
1:00 14:15
14:15 Additional
brainstorming on e-
Business initiatives
0:15 14:30
14:30 Break 0:15 14:45
14:45 Prioritization 0:20 15:05
15:05 Conclude
prioritization
0:10 15:15
15:15 Sequence initiatives 0:20 15:35
15:35 Conclude roadmap 0:10 15:45
15:45 Q & A 0:15 16:00
Figure 3: Results of the evaluation of the EBSPS for
Alpha.
6 CONCLUSIONS
In this research, the EBSPS was developed to assist
less-mature organizations in developing an e-
Business strategy. A simple yet powerful set of
design parameters was used to assess the
organization, so guiding the development of a
suitable process to develop the e-Business strategy.
They were pressures, organizational power, and
readiness. The review of strategic management
tools and techniques also provided a toolbox for
practitioners.
The evaluation of the first organization suggested
that the EBSPS was successful. The success was a
result of excellent corporation from all participants.
Since this project was valued by the Managing
Director and he was the person arranging interviews
and workshop by himself, it shows the important of
top management support in strategic consulting
work.
According to the evaluation criteria, EBSPS was
rated very high in all subcategories within Usability
and Acceptability. However, its Usefulness only was
rated between medium to high. Interview with
selected participants revealed that they preferred to
see Action Plan being developed in the workshop to
enhance confidence and commitment of execution
hence usefulness of EBSPS. From Design Research,
the design of EBSPS has met research rigor criteria
as well.
Another lesson-learned from the organizational
assessment is that Maxim is not easy to describe
while Current Issues have been very useful in both
selection of strategic planning approach as well as
tools and techniques to be used in the workshop.
The learning at Alpha was used to improve the
EBSPS. While this paper being written, the
workshop for the second company, Beta – a large
Thai asset management company and Gamma – a
small Thai engineering consulting firm are
completed and being documented.
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