Handbook of Business Strategy 2006, Volume 7, Issu... - (Technology and Processing) PDF

Technology and processing
Adopting new technologies 307

Albert Carneiro
This article looks at how new technologies and their inherent risks have to be considered to
achieve excellence, to enhance productivity, and to strengthen competitiveness. The solution
demands the understanding of the capacities of these technologies, their adequacy to each
business, the possibility of exploring their bene®ts and the effort of acquiring a new
management mentality.
Web accessibility: guidelines for busy administrators 313

Sheryl Burgstahler
The purpose of this article is to guide executives in making their organizations' web sites
accessible to people with disabilities. It summarizes legal issues, access challenges for people
with disabilities, accessibility guidelines and standards, accessibility tests, and steps that can
be taken by administrators to assure that web sites are accessible.
Improving the performance of technology partnerships: a case study in

the Turkish textile industry 319
Dilek Cetindamar, BuÈlent CËatay and O. Serdar Basmaci
Collaboration is an advantageous strategy for technology-based competition. Thus, it is of
high concern to understand mechanisms behind the success of collaborations such as
performance measurement system. This article presents an empirical study conducted in the
Turkish textile industry where performance measures were developed and applied.
Embedded ethics: how to build better IT mousetraps 325

David H. Gleason
Copyright © 2005. Emerald Publishing Limited. All rights reserved.
Ethical decisions are embedded in technology during design and development. Once a
technological system is operating, it repeats those ethics whether or not anyone is watching.
The effects of technology ± its ethics ± are often hard to predict, and are usually irreversible.
This article describes this dynamic and its effects, including how insidious and destructive this
can be to a business's operations and objectives.
Supply chain effectiveness: strategy and integration 331

Brian Leavy
Supply chain effectiveness has never been more important to commercial success, and the
gap between the best and the rest in many sectors continues to widen. Technology alone is
not the answer. Effective supply chain management requires meeting two main challenges, a
strategic challenge and an integration challenge. Deciding what to outsource and when to
partner is at the heart of the ®rst, while the ability to align interests, develop partnership
networks and manage complexity and risk across the extended enterprise is crucial to the
second. This article examines them both.
| HANDBOOK OF BUSINESS STRATEGY

| PAGE 305
Handbook of Business Strategy 2006, Volume 7, Issue 1, edited by Patricia Coate, Emerald Publishing Limited, 2005. ProQuest Ebook Central,
http://ebookcentral.proquest.com/lib/cycu/detail.action?docID=282929.
Created from cycu on 2019-01-22 19:32:06.
Strategic management lessons from e-commerce 337
Maris G. Martinsons
Many ventures all over the world were started with the hope of capitalizing on the
opportunities provided by the internet. Intensive research on the ®rst era of internet-based
enterprises reveals four categories of failures. Each type of failure suggests a speci®c lesson
for strategic management. This article highlights the importance of a sound business idea,
good market knowledge, long-term planning, external relationships, and balanced business
development.
Getting your infrastructure components to work together 341

Renate Rooney
When a company goes through a reorganization or merger, or when it sets a new vision,
many individual new pieces must be set in motion. Where companies often fail is in the
implementation stage, not fully integrating all infrastructure components so they will function in
concert, rather than in isolation. This article offers guidelines for doing this right, i.e. making all
these new pieces ®t so they work together.
Realizing the business bene®ts of enterprise IT 347

Amir M. Sharif
Getting users to adopt enterprise IT/IS systems is notoriously dif®cult to achieve and can
de®ne the success of failure of a project. By understanding characteristic user traits and user
types of such business systems, this article presents a six-stage approach to overcoming this
issue.
PAGE 306
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Adopting new technologies
Alberto Carneiro
Alberto Carneiro, PhD, is Associate Although a signi®cant number of new technologies have been developed, some
Professor in the Department of Engineering organizations have almost completely ignored the need to adopt these technologies
and Technologies at the University of Lisbon.
or they are being too slow to decide and initiate the respective adoption processes.
He can be reached at
albert.carneiro@netcabo.pt Some managers wish to install the best technologies once they are commercially
available, however many others seem to tend to ignore the human and organizational
impacts of these technologies.
The comprehension of new technologies and all its potential abilities can actually
become a source of weakness, because managers cannot use them against
competitors or to pro®t from the opportunities that these technologies can offer. The
solution of this situation demands that one understand the capacities of these
technologies, their adequacy to each business, the possibility of exploring their
bene®ts and the effort of acquiring a new management mentality. At the same time, it
is vital to understand how the new technologies are closely linked to the information
systems and how their security guarantees business continuity.
In order to prevent obsolescence, many small and medium-sized enterprises (SME)

are economically obliged to adopt new technologies, and they should do so by
paying attention to the inherent risks of these technologies and to the security of their
businesses making it possible to continue, even after a severe and unexpected
incident.
Information technology as an innovation

For some decades the value and the importance of information systems (IS) and
information and communication technology (ICT) has become increasingly decisive
This article looks at how new and ubiquitous in organizations' businesses. The rapid deployment of the internet
technologies and their inherent risks and the corporate databases in the 1980s and 1990s accelerated this process of
have to be considered to achieve modi®cations to enterprises' behavior and the scope of their communications with
excellence, to enhance productivity, markets where they operate. At this moment, we already can state that there are
and to strengthen competitiveness. The billions of agents who interact daily with computational devices, on a constant and
solution demands the understanding of largely autonomous basis.
the capacities of these technologies,
their adequacy to each business, the This situation and its possible evolution provide many new challenges to our ability to
possibility of exploring their bene®ts and design and deliver information systems. However, for many organizations, the
the effort of acquiring a new information systems and overall ICT still are an innovation in their ways to operate in
management mentality. the markets and to relate with partners. This means that the adoption process
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HANDBOOK OF BUSINESS STRATEGY 2006, pp. 307-312, # Emerald Group Publishing Limited, ISSN 0894-4318, DOI 10.1108/10775730610618981 PAGE 307
continues to be a possible objective of a decision-making
`` To
process and /or a management issue. prevent obsolescence and
The impetus to innovate arises when decision makers in an death, many small and medium
organization notice a performance gap or perceive that the sized enterprises (SME) are
organization's present course is unsatisfactory. economically obliged to adopt
It is well known that processes and technology improvements
can contribute to meet quality and process-performance
new technologies.
''
objectives. The identi®cation of innovative improvements, that
could increase the organization's quality levels, is a decisive assessment, the diffusion of these technologies still has so little
process to change the process performance. Strategically, the impact within many organizations.
success of most management innovation processes also
In my opinion, this is partly due to the complexity of the forces
depends on a competitive effort, which may include a deep
(such as resistance to change, manager enthusiasm, media
knowledge of technological advances and an adequate
campaigns, client opinion, manufacturers' inducements, and
analysis of networks' bene®ts (Carneiro, 2004; Cohen and
organization developments) that determine the diffusion of new
Levinthal, 1990). In this case, this means managers should pay
technologies and the way that ICT assessment interacts with
attention to the technologies that should be integrated to
them.
generate high knowledge levels and to improve the quality of
offering alternatives. Other limitations
These considerations about the information value should focus In addition to these interacting forces, there are two further
the ICT evaluation made by the organizations (Jones and limitations on the uptake of ICT assessment. The ®rst is
Hughes, 2000). A prior implementation evaluation may precede organizational: the complexity of the internal environment in
the making decision process, that is, before the installation of which technology assessments are to be used and
computational technologies into their IS. After this consequently their relevance to the decision makers at
implementation, organizations can concentrate on a post whom they are targeted. The second limitation relates to
implementation ICT evaluation, that is, the operational use value con¯icts created by the introduction of new technologies,
evaluation of ICT. which may affect the use of traditional methods and
procedures. A clearer understanding of these limitations and
It is well known that many sectors such as ®nancial services,
their mutual interaction will be needed if technologies are to be
information technology (IT), manufacturing, transport, central
optimally managed into the system.
government, consultancy, computer manufacturing, retail/
wholesaling, and publishing are related to operational use It is quite signi®cant to emphasize the importance of
evaluation of IT because they already depend on all the understanding organizational context relative to the diffusion
capacities of IT. However, the evaluation of these abilities and of ICT innovations. We have to consider several factors such as
their respective bene®ts that may be exploited by enterprises is the presence of a changing agent, ®nancial support, and
a complex process and there is no agreement on an ideal way managerial climates, and effective human resource
to evaluate or how to make the evaluation process better management as characteristics of a receptive organizational
(Dabrowska and Cornford, 2001). context for change.
In the ®eld of ICT, the evaluation process is de®ned by What is preventing the adoption of some new
quantitative and/or qualitative means to establish the value of IT technologies?
to the organization (Beynon-Davis et al., 2000); other de®nition Some organizations know that the innovation effort and the
includes the identi®cation and quanti®cation of the costs and adoption of new procedures and new technologies may
the bene®ts of IT investment. Some researchers state that the increase competitiveness (Goel and Rich, 1997). In fact, the
evaluation of IT investment is a process that takes place at innovators can be inventors if they are able to manage research
different points in time or continuously, in search for explicit, and development function (Gilbert, 1995). Moreover,
quantitatively or qualitatively, all the impact of an IT project knowledge workers (human capital) can deal with what
(Farbey et al., 1993, 1999). target market accepts or expects as value, and are able to
defend their organizations against the aggressive movements
To make best use of management resources, the diffusion and
of their competitors.
adoption of new technologies should be linked to evidence
their managerial and cost effectiveness. Yet, despite major Knowledge management (KM) focuses on the people involved
recent developments in the conduct and dissemination of ICT in creating, sharing, and leveraging knowledge among
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PAGE 308 HANDBOOK OF BUSINESS STRATEGY 2006
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functional areas. This involvement is the basis of an Some managers may assume that the sheer complexity of
organizational culture, which regards highly learning, modern enterprise networking is the greatest weakness for
teamwork, knowledge sharing, and innovation. Managers their organizations. However, managers responsible for
can formulate incentive schemes for engaging their evaluating ICT have to understand how these technologies
employees in those knowledge-based roles, activities and interact with existing set-ups, and make sure adequate
processes (Zack and McKenney, 1995). resources are applied to maintaining adequate performance
levels. Undoubtedly, almost any communications service could
Organizations can reach signi®cant bene®ts from a proactive
be perceived as a security risk, because intruders can
KM. This adoption orientation requires a coherent planning of
penetrate the system and secret statements may become
the combination of organization's technical tools, intelligent
public truths. However, vulnerability is not a synonym of
agents, knowledge processing requirements, and KM strategy.
weakness. There are methods and techniques to defend our
However, many medium sized enterprises are not able to adopt patrimonial assets.
rapidly new technologies and this dif®culty and /or reluctance
Adopting new risks and even more protection
should be considered and understood. Some factors are still
hindering the adoption of some new technologies: The innovative efforts include the search for, and the discovery,
experimentation, and development of new technologies, new
J Owners' mentality. Employees do not think like owners and
products and/or services, new production processes, and new
owners' relationship to the business is fundamentally
organizational structures. New management philosophies are
different from theirs. Many owners are managing their
aware that information is the result of knowledge evolution and
own business according to their traditional visions and they
that a solid network between intellectual effort and
are interested neither on innovativeness nor on modern
technological innovations is enlarging.
processes.
According to some works (Harari, 1994; Carrillo, 2002; Bhatt,
J Organizations dimensions. To some SME, it is quite enough
2002), the organizations, which are able to stimulate and to
to keep using the commercialization processes that have
improve the knowledge of their human capital, are much more
been used until now. Moreover, the information about
prepared to face today's rapid changes and to innovate in the
clients (needs, purchase behaviors, and satisfaction levels)
domain where they decide to invest and to compete.
is based on personal relationships.
Managers should recognize that the skills of human resources
J Some users present a signi®cant lack of technical
and the motivation level make possible creative suggestions,
quali®cation. This problem may lead to a de®cient use of
different proposals, and research activities to build up
equipments and applications; consequently, it is not
innovations.
possible to use every potential capacities coming from
computing technologies. Nevertheless, at the same time, organizations are dealing with
some unknown realities, and this means managers have to face
J Resistance to change. Despite of the dissemination speed
risks. According to a risk perspective, we could say that the
of ICT, we still have to face this situation: some employees
probability of a result is a function of the protection degree
do not wish to modify their personal ways of executing their
against the level of risk the organization faces. Managers have
ordinary tasks due two main reasons. First, they do not
to promote security management within their organizations,
want to learn how to deal with new technologies. Second,

®rst, undertaking comprehensive risk assessments.
for some human beings, change may create a feeling of
insecurity. Today's organizations need risk control and, more than ever,
risk mitigation strategy options for controlling risks should be
J The use of new technologies limited to some functional
taken into account. This control process demands risk's clear
areas (ex: production). This limitation can be faced as a
identi®cation, identifying the categories that may be used to
preventing force that hinders the use of new technologies
classify controls. Risk assessment has to be based on the
within an integrated perception of an enterprise
likelihood of occurrence and impact on an organization's
performance.
productivity. It is also important that organizations know from
J The fear of facing new technologies as a source of which sources managers can gather relevant information on
organizations' insecurity: when data are processed security and technical advisement, because they are able to
according to traditional techniques, the information provide advices about security vulnerabilities and methods to
obtained is tangible, it does not disappear, it cannot be remove or reduce the danger of particular vulnerabilities for
destroyed, robbery is much more dif®cult, etc. different computer operating systems.
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HANDBOOK OF BUSINESS STRATEGY 2006 PAGE 309
In what concerns ICT, managers do have to assume a
`` Ifclearly
permanent challenge. In today's business environment, managers of many SME do not
maintaining client con®dence and protecting your business
assume the necessity to
means securing your broadband connection and network.
Our success depends on taking steps to safeguard critical
modernize their organizations,
data. they will not be able to take
advantage of all its resources'
''
When our business grows and we use frequently the internet to
potentialities.
connect of®ces, clients and partners, organizations are
exposing themselves to greater cyber threats. This means
they need a set of reliable internet security solutions. Some
programs deliver proven security to SME with different less time, by planning and generating a contingency plan (CP).
technological solutions. Some of them are exceptionally easy This plan comprises three major components: incident
to set up and manage via browser-based wizards that let response plan, disaster recovery plan, and business
managers secure their networks very easily, for instance, continuity plan.
enabling users to create a virtual private network (VPN) that
Despite the severity of the disaster, the organization needs to
functions like an expensive proprietary network, but uses the
survive and there must be a plan to allow the business to
low-cost internet infrastructure.
continue to function. This plan depends of the identi®cation
Knowledge to maintain information security of critical business functions and the resources to support
To be able to defend and protect their organizations, managers them.
must have a good level of knowledge on the main aspects of Incidents and control
information security, namely:
According to rules and processes of internal control, incidents
J a whole concept and a practical understanding of can be studied internally to gain a better understanding of the
information security;
organization's threats and vulnerabilities. The capability to
J what a viable information security architecture is, what it handle incidents and to foresee their consequences is the
includes, and how it is used; basis to prevent damage from future incidents. The
occurrence of an incident demands a reaction process that
J the adequate manner to maintain risk controls;
includes its identi®cation, the evaluation of its degree of risk
J management's role in the development, maintenance, and and a set of actions and procedures that can lead to recovery.
enforcement of information security policy, standards, For these reasons, the adoption of new technologies, either
practices, procedures, and guidelines; dedicated to production or integrated with information
J threats posed to information security and the more domain, demands an effort to elaborate a disaster recovery
common attacks associated with those threats; plan and its parts.
J how to develop a contingency plan (including incident The purpose of this plan is to prepare all organizations'
response plan, disaster recovery plan, business continuity components (human, technological, materials, and ®nancial) to
plans, and its parts); react adequately to the incident and to enable the business to
continue its normal modes of operation and its relationships

J the need for physical security programs;
with providers, distributors, and clients. However, this plan
J the main problems created by rapid changes and their cannot exist apart, since every business runs in a temporal
potential impact on information security; and dimension. According to this conviction, organizations must
J how to create a full information security maintenance redraw its mentalities and attitudes regarding security to build
program. an adequate business continuity plan.
Is somebody claiming for continuity? Controlling access: identi®cation and authentication
Some technological disasters have a detrimental effect on Physical and environmental security controls are implemented
business and industry, both in time and in costs. A signi®cant to protect the IS, the system resources themselves, and the
percentage of small businesses that experience a disastrous facilities used to support their operation. A security policy and
event never open again. Business and industry can take its consequent program can help to prevent interruptions in
preventive action to limit injuries and damages from computer operations, physical damage, unauthorized
technological disasters and return to normal operations in disclosure of information, loss of control over system
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integrity, and theft. One of the main security risks is physical and more reliably. Therefore, an information security audit
and/or logic access to the system. has to be regularly conducted and an audit report with
adequate recommendations for improving security has to be
To provide security for IS, managers must provide access for
prepared. This adds value for the organization, their
legitimate users but screen out intruders who may be trying to
partners, clients, and ultimately for the networked public
break in. Access control usually requires that the system be
able to identify and differentiate among users. This means that at large.
security features to authenticate all user access to system Conclusions
resources must be considered. `Ìdenti®cation and
authentication'' is a technical measure that prevents Best practices demand for wider vision and solid prudence and
unauthorized people (or unauthorized processes) from strategic management has to be faced as a work that implies risk
entering an ICT system. and daring. However, many times, the risk presents two facets:
with and without, that is, with the adoption of new technologies
To protect its own survival, an organization should restrict or without them, that is, keeping the old processes to run the
access to authentication data. Authentication data should be business. This means that some managers have to modify their
protected with access controls and one-way encryption to
mentalities and to ponder that, without modernization, these will
prevent unauthorized individuals, including system
be dying in a suicide process.
administrators, or hackers from obtaining the data. Some
applications authenticate remote user identities to ensure that If managers of many SME do not clearly assume the necessity to
only authorized people have network access, and encrypt modernize their organizations, they will not be able to take
communications to ensure communications are private and advantage of all its resources' potentialities, not only the
uncorrupted. technological resources, but also of the capacities and
quali®cations of the human resources. Currently, many
Security to continue the business
collaborators have already a speci®c quali®cation in ICT
When managers decide to include their assets' security they domain and can help to open new decisive routes for
have to begin with generally accepted system security enterprise growth.
principles and continue with common practices that are
It is necessary to take into account that every new technology is
being used in securing ICT systems. The system security
always carrying with it new sources of risk. Nevertheless, risks
principles address physical and logic security from a very high-
are not negative and horrible ghosts. They have to be included
level viewpoint and are expressed at a high level,
within the right ways to achieve excellence, to enhance
encompassing broad areas, e.g. accountability, cost
productivity, and to strength competitiveness. J
effectiveness, and integration. It is indispensable that
managers, internal auditors, users, and system developers References
can adopt some orientation perspectives to strength a wide
Beynon-Davies, P., Owens, I. and Lloyd-Williams, M. (2000), `ÌS failure,
understanding of the basic security requirements that most ICT evaluation and organizational learning'', Proceedings of UKAIS 2000
systems should contain. (UK Academy for Information Systems) Conference, Cardiff,
pp. 444-52.
However, it is needed to take care of security management
effectiveness, because expenses that can arise from ineffective Bhatt, G. (2002), ``Management strategies for individual knowledge and
or insuf®cient security may attain signi®cant amounts, since organizational knowledge'', Journal of Knowledge Management, Vol. 6
No. 1, pp. 31-9.
some assets plat important roles in generating revenue or

delivering services. For instance, they can include: Carneiro, A. (2004), ``Learning processes and the role of technological
networks as an innovative challenge'', Proceedings of 6th International
J the cost to rebuild, repair or replace violated systems; Conference on Enterprise Information Systems (ICEIS 2004), Porto,
Vol. 4, 14-17 April, pp. 497-501.
J the compromise or the loss of business assets;
Carrillo, F.J. (2002), ``Capital systems: implications for a global
J the cost of business interruption due to unplanned knowledge agenda'', Journal of Knowledge Management, Vol. 6
downtime; and No. 4, pp. 379-99.
J business erosion due to loss of con®dence from clients, Cohen, W.M. and Levinthal, D.A. (1990), `Àbsorptive capacity: a new
partners, and associates. perspective on learning and innovation'', Administrative Science
Quarterly, Vol. 35, pp. 128-52.
The cost savings derived from the processes of improving
Dabrowska, E.K. and Cornford, T. (2001), `Èvaluation and telehealth ±
ef®ciencies, and improving risk management can express a an interpretative study'', Proceedings of the 34th Annual Hawaii
security assessment's value. Organizations that are able to International Conference on System Sciences (HICSS), Maui, HI,
implement enhanced security technology will perform better January, Computer Society Press of the IEEE, Piscataway, NJ, June.
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Farbey, B., Land, F. and Targett, D. (1993), How to Assess Your IT Harari, O. (1994), ``The brain-based organization'', Management
Investment: A Study of Methods and Practice, Butterworth-Heinemann, Review, Vol. 83 No. 6, pp. 57-60.
London.
Jones, S. and Hughes, J. (2000), `Ùnderstanding IS evaluation as a
Farbey, B., Land, F. and Targett, D. (1999), ``Moving IS evaluation complex social process'', in Chung, H.M. (Ed.), Proceedings of the
forward: learning themes and research issues'', Journal of Strategic 2000 Americas Conference on Information Systems (AMCIS),
Information Systems, Vol. 8, pp. 189-207. Association for Information Systems, Atlanta, Long Beach, CA,
Gilbert, J.T. (1995), ``Pro®ting from innovation: inventors and adopters'', 10-13 August, pp. 1123-7.
IM, July/August, pp. 28-32.
Zack, M.H. and McKenney, J.L. (1995), ``Social context and interaction
Goel, R.K. and Rich, D.P. (1997), `Òn the adoption of new in ongoing computer-supported management groups'', Organization
technologies'', Applied Economics, No. 29, pp. 513-18. Science, Vol. 6 No. 4, pp. 394-422.
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Web accessibility: guidelines for busy
administrators
Sheryl Burgstahler
Sheryl Burgstahler, PhD, is the Director of A growing body of state and national legislation and policies address the accessibility
Accessible Technology Services and of information technology, including web pages. Some take the approach of
Outreach at the University of Washington in
establishing a civil right to technology access; others require that technology
Seattle. She can be reached at
sherylb@u.washington.edu purchased by the government must be accessible; still others require that technology
sold in a speci®c market meet accessibility standards (Section 508, 1998; World
Wide Web Consortium).
In the USA, the Americans with Disabilities Act of 1990 (ADA) (2003) prohibits
discrimination against individuals with disabilities in employment, state and local
government, public accommodations, commercial facilities, transportation, and
telecommunications. The ADA mandates that all ``goods, services, facilities,
privileges, advantages, or accommodations'' of places of public accommodation
be made accessible to people with disabilities, unless doing so would result in undue
hardship. The US government has issued rulings and statements that support the
position that web content is covered by this legislation. For example, in 1996 the US
Department of Justice responded to an inquiry in this way:
Covered entities under the ADA are required to provide effective communication,
regardless of whether they generally communicate through print media, audio media, or
computerized media such as the internet. Covered entities that use the internet for
communications regarding their programs, goods, or services must be prepared to offer

those communications through accessible means as well (Patrick, 1996).
Although there is still some debate about who is considered a ``covered entity'' under
ADA, in the private sector (Jackson-Sandborn and Odess-Harnish, 2001), it is
The purpose of this article is to guide reasonable to assume that when businesses or other organizations put out
executives in making their information on the internet, that information should be made accessible to people
organizations' web sites accessible to with disabilities (Waddell and Thomason, 1998). Lawsuits such as that brought on by
people with disabilities. It summarizes National Federation of the Blind vs America Online (Pressman, 2000), which was
legal issues, access challenges for eventually settled out of court by America Online agreeing to make its services
people with disabilities, accessibility accessible, suggest that we can continue to expect activity in the legal arena.
guidelines and standards, accessibility
tests, and steps that can be taken by Making web sites accessible can also be argued on ethical (`Ìt is only fair that all
administrators to assure that web sites citizens have equal access to information.'') and business (`Òur company strives to
are accessible. provide product information to all potential customers.'') grounds.
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Information on a web site for the public is meant to be viewed
`` Information
by others; it makes sense to assure all visitors can access its on a web site for the
content. However, research on web accessibility documents
public is meant to be viewed by
that much of the content on today's web sites ± in all sectors
and in all countries ± is inaccessible to some people with
others; it makes sense to assure
disabilities (Jackson, 1999; McMullin, 2002; Jackson-
all visitors can access its
Sandborn and Odess-Harnish, 2001; Schmetzke, 2002;
SciVisum 2004; Thompson et al., 2004).
content.
''
How can business and other administrators assure that the
web pages within their organization are accessible to people a wide range of characteristics individuals with disabilities, older
with disabilities? Without depth in technical expertise persons, people for whom English is a second language, and
themselves, how can they direct their staff in this area? This those using outdated hardware and software. They should
article summarizes access challenges for people with routinely think of the broad range of characteristics their site
disabilities, the universal design approach, accessibility visitors might have and design their resources to be accessible
guidelines and standards, and web accessibility tests. It to them. This is the same approach that modern architects take
concludes with steps that can be taken by administrators to in designing buildings; they build in ramps, elevators,
assure that web sites in businesses and other organizations are accessible restrooms, and other features to assure that the
accessible to everyone. facility will be accessible to individuals with a wide range of
abilities and disabilities.
What are web accessibility issues?
It is important to consider that some web site visitors: What are examples of accessible web page design
strategies?
J cannot see graphics because of visual impairments;
To design an accessible web site, Webmasters can either avoid
J cannot hear audio because of hearing impairments; inaccessible data types and features or provide alternative
J use slow internet connections and modems or equipment methods and formats for content access. For example, since
that cannot easily download large ®les; and some portable document format (PDF) ®les can be inaccessible
to people who are blind and using text-to-speech systems,
J have dif®culty navigating sites that are poorly organized with
Webmasters can avoid using PDF ®les can provide text-based
unclear directions because they have learning disabilities,
versions of the content along with the PDF documents. This
speak English as a second language, or are younger than
practice provides bene®ts to non-disabled web site users as
the average user.
well because it allows search capabilities and greater page
People use a variety of technologies to access the web. For access speed.
example, a person who is blind may use a text-to-speech
Applying universal design strategies to web site design is not
system that reads aloud content presented on the screen in
dif®cult, but does require learning about typical access
text format; he/she is blocked from content presented within
graphic images unless the Webmaster provides a text challenges and their solutions. As is similar in the ®eld of
alternative. architecture, though accessibility features can be added to an
exiting web site, it is easier to build in accessibility at early
A person with a mobility impairment may be unable to use a design stages rather than redesign a web site at a later time.
mouse and rely on a keyboard for web browsing; they may use Accessible design is good design. For example, a well-
speech recognition software or an alternative keyboard. A
organized and uncluttered web site facilitates navigation
person who is deaf cannot access the content of video
through the information presented for everyone. A few other
presentations that are not captioned or transcribed. In
simple suggestions include:
summary, people with some types of visual, hearing, or
mobility impairments cannot access web site resources that J Use the most current hypertext markup language (HTML)
require the use of sight, hearing, or the mouse. and other languages and web development tools to create
web pages, as current versions are more likely to address
What is universal design?
accessibility issues.
To create web sites that can be used by the widest spectrum of
J Maintain a consistent page layout throughout the site.
potential visitors rather than an idealized `àverage,''
Webmasters can apply `ùniversal design'' principles. This J Keep backgrounds simple, making sure there is enough
approach requires that they consider the needs of visitors with contrast for those with visual limitations to view the content.
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J Make sure that navigation and information access do not covered entities under Section 508. Some states in the USA as
require distinguishing one color from another so that well as speci®c organizations have adopted Section 508
content is accessible to those who are color-blind. standards, WAI guidelines, or their own guidelines (Georgia
J Institute of Technology, 2005). Although there are similarities to
Include text descriptions for graphical elements so that
individuals who are blind and using text-to-speech systems WAI guidelines, Section 508 standards are less
can access all of the information presented. comprehensive. One approach some organizations take is to
adopt the Section 508 standards as guidelines or standards for
J Make link text descriptive so that it is understood out of their web sites and support the further application of WAI
context so that individuals who are blind can skip from link guidelines to maximize the accessibility of their web sites (e.g.
to link and make appropriate selections without reading the www.washington.edu/computing/accessible/index.html).
surrounding text.
Are accessible web sites ugly and unattractive?
J Use resizable fonts so that individuals can use text sizes
that are most appropriate for their visual abilities. No. Saying that employing standards will create an unappealing
web sites is like saying that a sturdy foundation will result in an
J Provide a ``skip navigation'' link at the top of each page so
unattractive building. Both accessible and inaccessible web
that individuals who are blind and using text-to-speech
sites can be ugly and boring. And, both accessible and
systems and those who cannot use a mouse can easily skip
inaccessible web sites can be attractive and creative in design.
past this content.
Using standards, including accessibility standards, simply
J Provide audio descriptions or transcriptions of video creates a foundation on which high quality, accessible web
content so that those who cannot hear the audio can sites are ef®ciently created and maintained.
access presentation content.
Will complying with standards increase web
It is also a good idea to notify site visitors of the organization's development time?
commitment to universal access and to encourage reports of
accessibility barriers. For example, the DO-IT home page at Experienced web authors employ standards of all sorts ± for
www.washington.edu/doit/ includes the following statement: example, HTML, extended hypertext markup language
(XHTML), and cascading style sheets (CSS). Some time is
The DO-IT pages form a living document and are regularly
needed to select and learn to apply any standards. But,
updated. We strive to make them universally accessible. You will
ultimately, adopting and applying standards can reduce
notice that we minimize the use of graphics and photos, and
provide descriptions of them when they are included. Video clips development time. Standards-compliant web pages can be
are open-captioned, providing access to users who can't hear the more quickly erected and updated and more easily maintained
audio. Suggestions for increasing the accessibility of these pages and expanded by new staff. Standards can ultimately lower
are welcome. development and maintenance costs, increase an
organization's presence on the web, improve an
What accessibility guidelines exist that our
organization's image, and maximize its audience.
organization might adopt?
The World Wide Web Consortium (W3C) (2005) develops and Can my business use a web authoring tool to create
maintains the protocols used on the web to insure accessible web sites?
interoperability and promote universal access. W3C is Yes. Any Web authoring tool (e.g. Dreamweaver, FrontPage)
committed to accessibility. As Tim Berners-Lee, director of can be used to create an accessible web site; it can also be
the W3C puts it: ``The power of the web is in its universality. used to create an inaccessible one. Almost all current web
Access by everyone regardless of disability is an essential authoring tools have built-in accessibility features, but some
aspect.'' The Web Accessibility Guidelines developed by adjustments to the software default settings may be needed to
W3C's Web Accessibility Initiative (WAI) (2005) have been produce compliant code consistently.
adopted by many organizations worldwide.
Can I check the accessibility of my company's web
In 2001 the US Architectural and Transportation Barriers
sites?
Compliance Board (Access Board) developed accessibility
requirements for web pages of US federal agencies, a Many tools exist to determine the accessibility of web sites. A
requirement of Section 508 of the Vocational Rehabilitation thorough check of accessibility requires web development
Act (Of®ce of the Federal Register, 2000; Section 508, 1998). technical expertise. However, there are a few simple tests that
The development and implementation of these standards administrators without technical expertise can employ to test
provides a good model even for organizations that are not for some accessibility features. They include:
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J Turn off the graphics-loading feature of your web browser
`` People
and access your web site (for example, in Explorer select use a variety of
``preferences'' on the tool bar; under ``web browser'' select
technologies to access the
``web content''; unselect ``show pictures''). The content you
see is similar to that which will be read to a person who is
blind by their text-to-speech software. Can you access the
web.
''
content of your web site without the graphics images? On
an accessible site, you can. resources can be found at DO-IT's AccessWeb at
www.washington.edu/doit/Resources/accessWeb.html
J Consider the use of color on your web site. Can all content
presented in color be understood if you could not Does accessible design bene®t people without
distinguish one color from another? On an accessible disabilities?
site, it can.
Yes. People using hand-held display units, individuals in noisy
J Turn the sound off on your computer (for example, in or noiseless environments, those who speak English as a
Internet Explorer select ``preferences'' on the tool bar; second language, people using different web browsers or
under ``web browser'' select ``web content''; unselect ``play screen resolutions, individuals using phone web services, and
sounds''). Can you access all of the content? On an people with different learning styles can bene®t from accessible
accessible site, you can. web design.
J Re-size fonts (for example, in Internet Explorer, under the What steps can I take to assure the accessibility of
``view'' menu, select ``text zoom'' and select a large font the web sites in my organization?
size). Do the font sizes on your web site change? On an
Designing an accessible web site is not dif®cult when
accessible site, they will.
accessibility is routinely considered along with other design
J Unplug your mouse. Can you access all critical content on issues at all stages of web site development. Consider taking
your web site with the keyboard alone? On an accessible the following steps to assure the accessibility of web sites in
site, you can. your organization:
What web accessibility tests and other supports are J Select web accessibility guidelines or standards. If you work
available for my technical staff? for a federal agency or contract with the federal government
or sell to the federal government, Section 508 standards are
Technical staff can begin to test the usability of web sites with:
a good choice. Also consider adopting standards or
J different computer platforms; guidelines of your state (see www.ittatc.org/laws/
stateLawAtGlance.cfm).
J a variety of monitor sizes and screen resolutions,
including a hand-held display units; J Require that web staff document web design standards
that include those for web accessibility. It is probable that
J a variety of web browsers;
the Webmaster(s) in your organization are using standards
J at least one text-based browser (e.g. Lynx) or multi- of various types (e.g. HTML, XML, XHTML, CSS). They can
media browser with graphics-loading features turned be asked to write up a document summarizing these
off; standards, and include accessibility standards among

them. If web development tools are used, require that
J the display color changed to black and white;
designers apply the accessibility features of these tools.
J with the font changed to a different size;
J Disseminate web accessibility policy, guidelines, and
J a browser's sound-loading features turned off; and procedures throughout the organization.
J the keyboard alone. J Provide training and ongoing support. For some
organizations it may be reasonable to provide such
Testing compliance with web accessibility guidelines or
support internally; for others, especially small companies,
standards requires human judgment. However, technical staff
looking to external resources such as discussion lists and
can use accessibility testing software that will point out some web
existing web sites may provide the best approach (e.g. link to
site features that may be inaccessible. A collection of accessibility
www.washington.edu/doit/Resources/accessWeb.html).
evaluation tools can be found on the W3C Web Accessibility
Initiative's web site at www.w3.org/WAI/ER/existingtools.html J Consider developing a plan to phase in accessibility
Information about a discussion group and links to other online compliance for existing web pages, with a date at which
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all web pages will be compliant. Require that all new and Section 508 Guide: Web-Based Intranet and Internet Information and
updated pages meet accessibility standards. A good time Applications, available at: www.access-board.gov/sec508/guide/
1194.22.htm
to make web pages accessible is when they undergo a
signi®cant revision. Another approach is to make minimum Universal Design, available at: www.washington.edu/doit/Brochures/
Programs/ud.html
accessibility updates (for example, put alternative text for
simple graphic images throughout the organization's web Working Together: People with Disabilities and Computer Technology,
pages) for all pages, with a more thorough update at the available at: www.washington.edu/doit/Video/wt_dis.html
time of signi®cant revisions to a speci®c site. World Wide Access: Accessible Web Design, available at:
www.washington.edu/doit/Video/www.html
J Put processes in place to assure regular testing for
accessibility. W3C's Web Accessibility Initiative (WAI), available at: www.w3.org/
WAI/
J Place a statement on your home page that assures visitors
WebAIM (Web Accessibility in Mind), available at: www.Webaim.org/
of your commitment to providing accessible resources and
tells where to report accessibility barriers and request References
accommodations. Americans with Disabilities Act of 1990, 42 U.S.C.A. § 12101 et seq,
available at: www.usdoj.gov/crt/ada/statute.html (accessed
J Develop procedures for responding quickly to requests for
September 1, 2003).
disability-related accommodations and for ®xing
accessibility problems with web pages. DO-IT (Disabilities, Opportunities Internetworking and Technology
(n.d.), University of Washington, Seattle, WA, available at: www.
J If you hire contractors to develop web resources for your washington.edu/doit (accessed May 10, 2005).
organization, require within the contract that web pages Georgia Institute of Technology (2005), Overview of state accessibility
created meet your accessibility standards or guidelines. laws, policies, standards and other resources available on-line, Georgia
Institute of Technology, Atlanta, GA, available at: www.ittatc.org/laws/
Conclusion stateLawAtGlance.cfm (accessed May 10).
Administrators do not need a broad range of technical skills Jackson, A. (1999), ``Web page design: a study of three genres'',
regarding web site design in order to direct staff to make their unpublished Master's dissertation, University of North Carolina, Chapel
web sites accessible and to provide them with the tools and Hill, NC.
guidance they need. What they do need to provide, however, is Jackson-Sandborn, E. and Odess-Harnish, K. (2001), ``Site
leadership. Whether they justify their policies on legal, ethical, accessibility: a study of ADA compliance``, online, available at: http://
ils.unc.edu/ils/research/reports/accessibility.pdf (accessed May 10,
and/or business grounds, demanding that an organizations'
2005).
web sites be designed in an accessible manner is the right thing
to do. McMullin, B. (2002), ``WARP: Web Accessibility Reporting Project Ireland
2002 baseline study'', online, available at: http://eaccess.rince.ie/white-
Resources papers/2002/warp-2002-00/warp-2002-00.html (accessed May 10,
2005).
AccessIT (National Center on Accessible Information Technology in
Education), available at: www.washington.edu/accessit/ Of®ce of the Federal Register, National Archives and Records Service,
General Services Administration (2000), `Èlectronic and information
Americans with Disabilities Act of 1990, available at: www.usdoj.gov/
technology accessibility standards'', The Federal Register, Vol. 65
crt/ada/adahom1.htm
No. 246), December 21, pp. 80499-528.
Checklist of Checkpoints for Authoring Tool Accessibility, available at:
www.w3.org/TR/ATAG10/atag10-chktable.html Patrick, D.L. (1996), correspondence to Senator Tom Harkin,
September 9, 1996, available at: www.usdoj.gov/crt/foia/cltr204.txt,
Creating Video and Multimedia Products that are Accessible to People accessed May 10, 2005).
with Sensory Impairments, available at: www.washington.edu/doit/
Brochures/Technology/vid_sensory.html Pressman, A. (2002), `ÀOL avoids lawsuit from blind users'',
CNN.comNews, online, July 28, available at: www.cnn.com/2000/
DO-IT (Disabilities, Opportunities, Internetworking, and Technology), TECH/computing/07/28/aol.unseen.idg/ (accessed May 10, 2005).
available at: www.washington.edu/doit/
Schmetzke, A. (2002), ``Web site accessibility at 56 North American
EASI (Equal Access to Software and Information), available at:
universities: 2002 survey data on libraries and library schools'', online,
www.rit.edu/~easi/
available at: http://library.uwsp.edu/aschmetz/Accessible/nationwide/
Guide to Section 508 Standards: Video and Multimedia Products, Survey2002/contents2002.htm (accessed May 10, 2005).
available at: www.access-board.gov/sec508/guide/1194.24.htm
SciVisum (2004), `Àccessibility study 2004'', online, SciVisum, available at:
NCAM (National Center for Accessible Media), available at: http:// www.scivisum.co.uk/report/accessibility/200403Survey.htm (accessed
ncam.wgbh.org/ May 10, 2005).
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Section 508 of the Rehabilitation Act of 1973 (1998, amended), 29 Waddell, C.D. and Thomason, K.L. (1998). `Ìs your site ADA-compliant
U.S.C. 794(d), available at: www.access-board.gov/sec508/guide/ . . . or a lawsuit-in-waiting?, The Internet Lawyer, Vol. 4.
act.htm (accessed May 10, 2005).
Web Accessibility Initiative (2005), Web content accessibility guidelines
1.0, oonline, World Wide Web Consortium, available at: www.w3.org/
TR/WCAG (accessed May 10, 2005).
Thompson, T., Burgstahler, S. and Comden, D. (2003), ``Research on
web accessibility in higher education'', Journal of Information World Wide Web Consortium (2005), Policies relating to web
Technology and Disabilities, Vol. 9 No. 2, available at: www.rit.edu/ accessibility, online), available at: www.w3.org/WAI/Policy/ (accessed
%7Eeasi/itd/itdv09n2/thompson.htm (accessed May 10, 2005). May 10).
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Improving the performance of technology
partnerships: a case study in the Turkish
textile industry
Dilek Cetindamar, BuÈlent CËatay and O. Serdar Basmaci
Dilek Cetindamar is an Associate Professor Collaboration has become an established aspect of innovation strategy. Thus, it is of
at the Graduate School of Management,
high concern to understand mechanisms behind the success of collaborations.
Sabanci University, Istanbul, Turkey. She
can be reached at dilek@sabanciuniv.edu
Performance measurement system is one of these mechanisms that help not only to
BuÈlent CËatay is an Assistant Professor at develop but also maintain collaborations. By studying collaboration experiences, it
Faculty of Engineering and Natural Sciences, might become possible to develop and improve management of inter-®rm alliances
Sabanci University, Istanbul, Turkey. He can both in developed and developing countries.
be reached at catay@sabanciuniv.edu
O. Serdar Basmaci has recently received his Performance measurement can be de®ned as the process of quantifying the
MSc degree in Industrial Engineering at ef®ciency and effectiveness of action. In general, performance measures should be
Faculty of Engineering and Natural Sciences,
derived from strategy. In this article, performance measures or metrics will be
Sabanci University, Istanbul, Turkey. He can
be reached at serdarb@su.sabanciuniv.edu developed to quantify the collaborative action in supply chain collaborations (SCC).
Establishing a performance system brings many advantages. By measuring,

companies may observe and ®nd out what they need to do in order to position
and reposition themselves as valued participants within the collaboration.
Performance measures are integral elements of the planning and control cycle.
Performance data can be used not only to inform decision-making but also to
in¯uence behavior of companies by motivating, stimulating learning, and sending

signals.
In addition, non-aligned performance measures might cause problems for SCC.

Such measures lead to con¯icting decision making. The typical result is channel
Collaboration is an advantageous con¯ict and perhaps even the dissolution of the relationship. Poorly aligned measures
strategy for technology-based can also lead to partner dissatisfaction even when the supplier is dedicating
competition. Thus, it is of high concern tremendous resources to meeting the partner needs, since the supplier to emphasize
to understand mechanisms behind the performance that the partner really does not value. Thus, partners need to know what
success of collaborations such as is truly valued and then put the right measure in place.
performance measurement system.
This article presents an empirical study One of the problems with measuring is the performance itself. Given the multifaceted
conducted in the Turkish textile industry objectives of many alliances, performance can be dif®cult to measure with ®nancial
where performance measures were outcomes alone. But another problem arises when multi-scale is used to measure
developed and applied. performance: it becomes complex. Technological partnerships are particularly
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dif®cult in de®ning and measuring performance metrics due to
`` Collaboration
the uncertain and complex nature of knowledge and innovation has become an
developed in collaborations.
established aspect of innovation
Considering the inherent complexity of the supply chain, strategy. Thus, it is of high
selecting appropriate performance measures for SCC is critical. concern to understand mechanisms
Measures need to provide an accurate picture of supply chain behind the success of
''
performance as a whole but also highlight opportunities for
collaborations.
improvement at the overall supply chain levels.
Collaborative effort in Turkish industry

Textile dying technologies (3T) is a collaborative effort in the After two questionnaires were conducted during the period of
Turkish textile dyeing and ®nishing industry that struggles to May and July 2003 and a set of interviews with the managers of
establish a performance measurement system for itself. This 3T and a few partners, a model was developed in six months.
article summarizes its efforts and the results attained from its Then, the results were presented in a board meeting to all
performance measurement. partners of 3T to receive their comments.
The collaboration model of 3T Based on the literature investigation and our interviews, we
pulled together a set of metrics for measuring 3T's
The textile sector continues to be one of the major contributors
performance. In general, our model proposes that the
to the Turkish economy, being one of the fastest growing
performance measures for an alliance should include metrics
sectors in the 1990s with an average 12.2 percent annual
for internal performance, perceptions of partners regarding the
growth, while the Turkish economy had an average growth of
5.2 percent per year. The sector has great signi®cance in terms alliance performance, and the degree of inter-®rm relationship.
of economic development with a share of gross net product Internal performance is measured with productivity, innovation,
above 10 percent, industrial production around 40 percent, and sales. Productivity is measured with a number of indicators
manufacturing labor force around 30 percent, and exports related to product quality, project time, and so on. As 3T is a
around 35 percent. collaboration to develop high value-added products and
3T is a joint venture company owned by six technology technologies, innovation performance becomes a core
supplying and ten dyeing and ®nishing companies with each measure and it is measured with percentage of the number
having an equal share. 3T develops and implements integrated of new products developed.
automation systems (ranging from feasibility studies to after
Sales performance is measured with sales or purchasing
sales services). Dyeing ®rms are medium and large companies
volume generated through 3T partnership that is captured with
ranging between 70 and 1,000 while the partner suppliers are
three different metrics: percentage of dyer project proposals
mainly small ®rms, employing less than 70 employees.
that are accepted by 3T, percentage of 3T projects proposals
3T exposes a collaboration model that is built on technology that are approved by the dyers, and percentage of projects that
development, technology intelligence, and technology diffusion are done for partner dyers.
basis. In order to realize this sharing and diffusion, 3T meets
Perceptions are measured
with its partners regularly. In these meetings, partner dyers
share customer needs and fashion trends they have Perceptions of partners regarding the alliance performance aim
determined with other partners and partner suppliers share at capturing the performance improvements gained in partner
their technological innovations and capabilities. Then, 3T dyers and technology suppliers based on data gathered from
matches these customer needs and fashion trends with the them. These perceptions are measured with comparison of
supplier capabilities and develops new products. In the 3T's performance to other suppliers, the performance
projects, 3T ®rst uses the products of its partner suppliers. contribution of 3T to its partners (about defect rate,
However, for the exact integration of the system, it also uses breakdowns, and production capacity), and low performance
additional foreign and domestic resources for the products that
areas of 3T.
it cannot supply from its partner suppliers.
In this study, communication metric is used to measure
A performance model for 3T performance related to the degree of inter-®rm relationship.
The company was established in 2001 and has planned to Communication metric is derived from the participation rate of
have a performance model since then. In 2003, the company ®rms to meetings as well as the number of collaborating
accepted the authors' offer in preparing one for the company. partners.
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The performance of 3T 3T makes a cost/bene®t and payback analysis of the project
and presents it to the potential customers in their project
Internal performance
proposals. When we analyze the projects proposed in the past
3T aims at increasing the productivity and ef®ciency of the two years, we observe that 3T estimated reductions of 30
dyeing and ®nishing companies through integrated automation percent, 10 percent, and 20 percent in labor, raw material, and
systems to produce innovative and high-tech products. In two energy costs, respectively. The most accurate estimations are
years, 3T has facilitated the development of six new products in seen in the labor costs (in nine out of 11) followed by the energy
17 projects. Although it is a short period of time to observe costs (in seven out of 11). Regarding the raw material and
performance results, 35 percent new product development energy costs, actual reduction is never realized more than the
performance is well in accordance with the company's estimate.
objectives. We also observe that in seven out of 11 projects 3T
In Table I, we observe that 3T has never refused any proposal overestimated the reduction in raw material costs. The
from the dyers in the past two years and it responds to the accuracy of 3T's projections is an important factor for its
reliability and credibility for future projects. Therefore, keeping in
dyers' project proposals in two weeks on the average. On the
mind there is also a learning curve effect, 3T should place more
other hand, dyers approved only 11 percent of the 3T project
care in its cost estimations.
proposals (158 proposals in total). This shows that 3T has been
extensively marketing its services and solutions in an attempt to Perceptions of partners regarding the performance of 3T
create awareness in the industry. It appears that it has been
We used a ®ve-point Likert scale in order to compare 3T's
successful in these attempts since more than half of its project
performance in terms of technical experience, price, quality,
volume (in USD) has been with non-partner dyers (57 percent).
service, and ®nancial support (credit terms, advance payment
This also shows that the partners are more reluctant in doing
amount, etc.) to other suppliers of the partner dyers. The only
projects with 3T compared to other dyers. criterion other suppliers outperform 3T is ``®nancial support.'' In
The average duration of the 3T's projects is six months. Of the terms of ``technical experience'' and ``service'' 77 percent of
projects, 25 percent have been delayed and the delay is about the partner dyers think that 3T is better/much better than other
20 percent of the estimated duration. Considering the fact that suppliers. Also, all of the partner dyers consider other suppliers
3T is a new company with a different collaboration model in the no better than 3T in ``technical experience,'' ``quality,'' and
``service'' criteria.
industry, this is an acceptable ¯aw in the performance. In none
of the project proposals the price offer has been revised. This As the performance contribution of 3T to its partners about
shows that 3T offers realistic and reasonably low prices to the ``launching high quality products and services'' increases, the
dyers. perceptions of the partners about the superiority level of 3T with
Table I Evaluation of 3T regarding innovation, sales, and productivity performance measures

Innovation
Percentage of the number of new products developed (in two years) 35
Sales
Percentage of dyer project proposals that are accepted by 3T 100
Percentage of 3T projects proposals that are approved by the dyers (in two years) 11 (by 15 dyers)
Percentage of projects that are done for partner dyers (in US$) 43
Productivity
Average project time 6 months
Percentage of projects that are completed on time 75
Delay (percent of duration estimate) 20
Average time to respond to dyers' project proposal 2 weeks
Response time of 3T compared with other suppliers in case of breakdowns Same
Frequency of project offers of 3T to the dyers (in two years) 158 projects (to 70 dyers)
Average cost reduction percentage of 3T projects that is suggested by 3T
Labor costs 30
Raw material 10
Energy costs 20
Number of projects for which price proposal has been revised None
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respect to other suppliers in terms of the quality and technical
`` Inthatgeneral,
experience criteria increase as well. our model proposes
In what follows, we will discuss the partners' perception of the the performance measures for
3T's contribution to partner ®rms' defect rates, breakdowns, an alliance should include metrics
production capacity, and product quality. Five of 11 dyers for internal performance,
stated that their defect rate of their products decreased up to 5 perceptions of partners regarding
percent after 3T projects and the remaining six did not see any
the alliance performance, and the
contribution. The reason behind this relatively low performance
might be the different scopes of different projects since the
goals of implementing automation systems may differ from one
degree of inter-®rm relationship.
''
dyer to another.
but the most interesting fact is that 17 percent of the partners
Regarding the contribution of 3T projects to the breakdowns of
stated that they collaborate with between one and ®ve
the machines and automation systems of the dyers, six out of
companies, although 3T has 16 partners. This means that
11 dyers stated that the percentage of breakdown duration of
they do not see all of the partners of 3T as their partners and it
the machines in total production time reduced after the
may be a signi®cant problem for the future of this collaboration
implementation of automation system supplied by 3T. Three
of 11 projects decreased the breakdown percentages by more model.
than 5 percent. This result is not very surprising since 3T The bid evaluation, which is the strategy where the bids are
supplies automation systems to the dyers. Regarding the evaluated only for that single purchasing, has been the most
production capacities, four of the dyers realized an increase of widely used strategy among the dyers in the past. However, the
more than 10 percent while two realized an increase up to 10 technological capabilities of the suppliers and strategic
percent after 3T projects. collaboration appear to gain importance in supplier selection.
Top-performing contributions It may be claimed that the importance of collaboration is well
understood by 3T dyer partners as 90 percent stated that they
In evaluating the performance contribution of 3T, we used a would seek collaborative strategies in the next two years. Thus,
fvie-point Likert scale. ``Launch of high quality products and collaboration is a new but rapidly developing concept for dyeing
services'' and `ìncrease in productivity'' are the top performing
and ®nishing industry in Turkey.
contribution areas as perceived by 67 percent and 58 percent
of the partners, respectively, to achieve big/very big In terms of communication, 3T organizes regular bimonthly
contribution. This is not a surprising result since 3T aims at meetings with its supplier and dyer partners. These meetings
letting its partners to produce high quality and value-added are important for the success of the collaboration since partner
products through technology sharing and increasing their dyers share information about customer requirements while
productivity. However, these percentages seem to be rather partner suppliers share their technological innovations in these
low. The reason might be the fact that 3T has completed a meetings.
small number of projects so far.
Meetings and building trust
Regarding the quality of the products 13 out of 15 respondent
Technology and information sharing are the main infrastructure
partners stated that they have experienced improved quality in
of this collaboration model. Thus, these meetings play a
their products after having initiated collaboration with 3T. This

result has great signi®cance considering the goals of 3T. signi®cant role in facilitating partners building trust on each
other and increasing their understandings about the
The degree of inter-®rm relationship collaboration concept. However, while 3T attends to all
While 32 percent of the companies collaborate with more than meetings, partners do not show such a high performance,
®ve companies 56 percent do not practice any sort of which appears to be a barrier in building high-level trust and
collaboration at all. Collaboration is a new concept for textile sharing information among partners.
industry as it also is for other industries in Turkey. Collaboration We collected data on how frequent the partners participate to
requires high level of trust and information sharing, but it is not the meetings. Only a quarter of the partners ``participate all''
very easy to build such a trustworthy atmosphere in this meetings while another quarter ``participate most of them.''
business environment. So, companies are reluctant to
Actually, the geographic locations of the partners have a
collaborate.
signi®cant effect on this fact. We also observe that the
Of the partners, 83 percent collaborate with more than ®ve attendance of the suppliers to the meetings is more frequent
partners. This may certainly be due to their partnership to 3T, than the attendance of dyers.
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Participants that give high importance to ``willingness to share It is not easy for SCCs such as 3T to measure its performance
information with partners'' as a bridge to effective SCC also and evaluate its partners' performance in a comparative
participate to the most of the regular meetings of 3T. These manner since the examples of such collaboration models are
companies are able to comprehend the importance of the rare, preventing a benchmarking study. However, in order to
meetings for information sharing and building trust among the improve the collaboration structure and to be successful in
partners. Further, as the trust, information sharing, and the today's business environment, the performance of
communication between the partners increase, the collaborations and their partners should be evaluated
performance contribution of collaboration to the partners also continuously.
increases.
Revisions in performance systems
Practical implications for 3T
The continuous evaluations can further bring revisions in
Overall, 3T is a successful venture, creating technologies that performance systems, making it dynamic and ¯exible. For
lead into the production of high value-added products in the example, new performance metrics, especially in the area of
industry. It is a pro®t making joint venture with expansion of new resource sharing, may be included when 3T extends its
partners joining to the SCC. Its success is not limited to the collaboration model to the area of resource sharing in the
creation of new technologies but also it covers the creation of future.
positive perception of partners regarding the 3T's performance.
Benchmarking studies may also be performed in the future to
Even though 3T is successful, there are some potential compare the collaboration levels of different collaboration
improvement areas, particularly in its internal activities and its structures. In addition, the performance of collaborations can
relationship with the partners. Internal performance can be
also be compared with past performances using historical data.
further improved with small changes. For example, 3T should
Thus, a systematic and consistent performance evaluation
improve its performance either in estimating the duration of the
scheme should be developed.
projects more accurately or in completing the projects on time.
It might improve its cost/bene®t and payback analysis in its Conclusion
proposals since it tends to overestimate the reductions in labor
SCC is an advantageous strategy for technology-based
costs, energy costs, and particularly in raw material costs.
competition, so companies must evaluate themselves and
The real bene®t seems to come from the improvement of the examine if there is a good ®t between the value they promise to
degree of inter-®rm relationship, in other words create and the value that is actually created by the supply
communication. Our study shows that as the level of chain.
information sharing and communication among the partners
Companies might further reposition themselves as time passes,
increase the performance and the bene®ts of the collaboration
so it is crucial to evaluate the performance of SCC. However,
also increase. As the degree of inter-®rm relationships affects
the process of developing a performance measurement is not
the performance of SCC at a signi®cant level, 3T should pay
attention to develop its communication capability. an easy task as the example of 3T shows. It requires
considering metrics related to internal performance,
This can be done in two ways. First, we observed that the perceptions of partners regarding the alliance performance,
involvements of the suppliers in the projects are not evenly and the degree of inter-®rm relationship.
distributed. The suppliers that take part in the projects less
Similar to the Turkish textile producers, many ®rms in
frequently may be included in the future projects by extending

the scope of projects. More participation will help 3T build developing countries are faced with the challenge of
better integrated and higher value-added systems for its producing high value-added and innovative products instead
customers. of low quality and cheap products and exporting them to the
world. As 3T is a successful venture in creating new
Second, from the performance measurement analysis, we technologies and products by bringing the resources of
observe that the efforts of each partner to improve the partners together, these collaborations might be a tool for
collaboration are not at the same level. 3T should motivate
®rms in developing countries in order to gain competitiveness in
its partners to improve the collaboration structure of 3T. An
their respective industries at the global level.
appropriate information infrastructure on which partners can
share their demand forecasts, sales information, customer As the case of Turkish textile industry shows, SCC among small
needs, etc. may be built to motivate the partners to share more and large ®rms can be a successful tool in creating and
information. In addition, more frequent attendance of the diffusing innovation. Further, SCC can have long-term goals
partners to the meetings will also improve the communication like continuous product innovation as experienced in 3T and
and information sharing level among the partners. this might increase overall performance of an industry. J
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Embedded ethics: how to build better IT
mousetraps
David H. Gleason
On March 1, 2005, Bank of America reported that it had ``lost'' data tapes containing
account information on 1.2 million federal employees, including US Senators. On
May 2, 2005, Time Warner reported that it had lost tapes with employment data on
600 employees. Contemporary banking would not be possible without information
technology (IT), and yet IT also enables theft of account data.
David Gleason, MA, PMP, is Managing In the past banks would prominently display their vaults, a visual demonstration of
Consultant of Information Ethics, Inc. He can secure deposits. But it was never possible to guarantee 100 percent security then,
be reached at dgleason@info-ethics.com or
nor is it now. The same way banking vaults had embedded ¯aws, so do electronic
www.info-ethics.com
security systems. Since no one can guarantee 100 percent security, some ethical
compromise is inevitable.
As losses inevitably result, stolen personal data ± such as bank account balances,
deposits and payments ± may prove a greater loss to some people than the insured
cash they can usually recover. Ironically, the same technology that allows us to shop
at Amazon.com also allows criminals to buy lists of credit card and Social Security
numbers from the black market. The ethics, or quality of systems, are built-in.
Ethical decisions are embedded into IT during design and development. Once a
system is operating, it repeats those ethics whether or not anyone is watching. The
effects of technology ± its ethics ± are often hard to predict, and are usually
irreversible. As another example, for better and worse, technology has started
producing genetically modi®ed organisms (GMOs). GMO corn produced by
Ethical decisions are embedded in
technology during design and Monsanto reduces the need for chemical pesticides, but new genetic material
development. Once a technological may also express in unexpected and damaging ways, say by promoting a resistant
system is operating, it repeats those pest that then destroys natural crops. Also, once released into the environment,
ethics whether or not anyone is GMOs can cross-fertilize with traditional crops, expanding the local ecosystem in
watching. The effects of technology ± which the crops are planted to affect larger and larger systems. This effect is called
its ethics ± are often hard to predict, ``subsumption'' ± the GMO is subsumed into larger systems and cannot then be
and are usually irreversible. This article removed.
describes this dynamic and its effects,
including how insidious and destructive Because it grows in the environment, GMO technology is out of control by nature.
this can be to a business's operations Though within a ®ctionalized account of what could happen, Michael Chrichton's
and objectives. Jurassic Park demonstrates palpably how living organisms seek their own survival.
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Paying attention to ethics can minimize unintended
`` The
consequences of this dynamic. Tools and methods are effects of technology ± its
available to help businesses to reduce negative impacts,
ethics ± are often hard to predict,
improve outcomes and, indeed, promote market position. In
this article, I will explain the workings of ``subsumption ethics,''
then review systems development in this context. Finally, I
and are usually irreversible.
''
describe tools available to lessen problems.
that changing base components is like moving building
It might be argued that with technology changing so quickly
that it may be impossible to know the breadth of future ethical foundations. It can require changes to entire systems. The
consequences at the time of its invention. But such uncertainty Y2K problem, for example, was a result of subsumed date
only underscores the case for making ethical concerns an processing: no one had thought way back that the systems
integral component of any ``strategic thinking.'' would be around long enough to need four-digit dates.
Subsumption ethics Technology is built over time, and so components ±

``subsumed objects'' ± may cause a major problem only
The full de®nition of subsumption ethics is the process by which much later and under certain circumstances. However, once
decisions become incorporated into the operation of something goes terribly wrong with technology, it usually
technology and subsequently forgotten. Technological
cannot be undone. In the Challenger and Columbia space
systems, by nature, repeat operations, even if those
shuttle disasters, once subsumed errors manifested
operations have unethical impacts. Ethics or not, systems
themselves, lives had already been lost. Retrospective
will continue to execute embedded decisions anyway. Unlike a
analysis often shows the causes of problems, and we learn
human operator, there is no point in the cycle where the
lessons to avoid repeat mistakes. But usually the problems turn
machine pauses to ask, ``Should I do this?''
out to have been subsumed well before their manifestation. In
In most technology, small components are developed and Challenger's case, the booster rockets were designed and
tested, and once they are working reliably, they are subsumed manufactured years before they actually failed.
into larger systems. Subsumption in general is the process of
building larger components from smaller ones. In computer Some failure is inevitable because we are pushing the envelope
systems, small components, like the code that reads data from and dealing with complex, untested technologies ±
disk drives, are developed and tested, and once they are consequences are hard to predict without experience. But
working reliably they are subsumed into larger systems. This is this explanation does not excuse decision-makers from
the enabling technique of object-oriented programming. It is responsibility for harmful outcomes. Indeed, as professionals,
why, in Microsoft Windows, browsing through ®les looks the we are expected to know how technology will amplify our
same from every program. activities.
The larger systems, in turn, are subsumed into still larger Quick judgments become ampli®ed
systems. Once components, subsystems and applications are
In the information age, business decisions reach farther than
operating, the subsumed process becomes invisible and
ever before. Business systems will ¯awlessly execute bad
unavailable to the user, what Dartmouth Professor James
decisions inde®nitely, because those decisions are codi®ed into
Moor calls the `ìnvisibility factor.''
software programs. For example, a poorly designed chart of
From binary storage to the structure of databases to the accounts can cause consistently misstated earnings. Quick
content of web pages, IT components are ``subsumed'' into judgments of line managers, programmers, consultants and
larger and larger systems. Each component is forgotten as it is salespeople can be ampli®ed by technology to monster
subsumed, and requires no further attention unless it fails. proportions.
These components are called subsumed objects.
Technological systems are built from such objects and, as a To be clear, ethics are ``built into'' subsumed objects and also
result, become enormous. describe the human and social implications larger systems.
There are ethical outcomes in both cases. For instance,
More than a set of instructions software that runs medical equipment has an immediate ethical
To the layperson, technology seems as though it should be character. Failure in the moment can even cause death as it did
extremely malleable. People tend to think that changes to in the Therac-25 radiotherapy case: a faulty data entry screen
software should be easy because programming is merely a set ended up giving patients deadly doses of radiation.
of instructions, as opposed to a building made up of hard Furthermore, the company failed to immediately follow-up on
materials. However, the principle of subsumption makes it clear the ®rst reported injuries.
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Though the cause may be a faulty ``subsumed object,'' the The icons are ``subsumed objects.'' They have determinate
ethics of the outcome will be system-wide. Furthermore, the moral value, and they are the responsibility of the people who
``system'' is greater than the machine itself: It includes the designed them. Microsoft countered the Justice Department by
developers, the vendors and the health care providers using it. saying that it would be too complicated to remove internet
Subsumed decisions are cumulative ± objects become Explorer from Windows.
subsumed more and more deeply. If we desire our
Organizational policy drives IT development
technology to have integrity, reliability and maintainability,
then we must consistently make good decisions about how to There is a close relationship between computer systems and
design and build it. This requires a new orientation on the part organizational policy. For example, in the 1990s some state
of all involved, from executive sponsors to engineers, motor vehicle registries sold toll-pass data to private
something not so easy to do! companies which was used for marketing purposes. While IT
The Greek word ethos, from which we derive `èthics,'' can be enables the practice, the policy raises the ethical concerns.
translated as ``habit.'' Habit in general is a subsumption
Policies become subsumed
process. Aristotle pointed out that habits are the result of
accumulated decisions. Good decisions lead to virtuous Because of subsumption ethics, such policies become
character. Therefore, ethos and subsumption are closely subsumed into systems. Here is how it works:
related, and Aristotle's ethics are easily applied to IT.
1 IT enables a function that was not possible before (like
Small design decisions lead to small elements within a system. marketing with detailed commuter data).
These small elements become subsumed into larger system
components, and so on, until the full system operates. 2 A policy decision is made to proceed with the practice (the
data is sold).
Systems development
3 Engineers and managers seek ways to implement the
Design and implementation decisions dictate the structure and
policy ef®ciently.
operation of systems. Systems ultimately operate according to
many such decisions. The decisions become codi®ed into 4 An automated process is set up that implements the policy
programming code and information content. Because of the (commuter data is transmitted automatically to buyers at
`ìnvisibility factor,'' subsumed objects often cannot be regular intervals).
identi®ed retroactively. It is impossible, for example, to look
at code and determine the intent of the programmers. 5 The process runs without user intervention. At this point,
the policy has become a subsumed object, and it would
This does not mean that the system makes ethical judgments,
take work to discontinue the practice. Once the original
or that we can hold computers ethically responsible for their
decision-makers, systems designers and developers move
actions. But it does suggest that:
on to other projects, the subsumed process is largely
J the impact of IT is determined by the operation of its forgotten as a matter of course. The process will be
subsumed objects;
reviewed again only if problems or complaints arise.
J subsumed objects have a determinate moral value, but are
6 The SO gets subsumed into other practices, such as the
invisible to users;
general databases of the registry data purchasers.

J the ethical impact of an IT system is the responsibility of the
7 The process repeats.
people who designed, developed and use it; and
J subsumptive complexity increases over time.
Tools
Inattention to subsumption inevitably leads to ``projects from
Icons have determinant value
Hell.'' This is because bad decisions become subsumed, and
As an example, people tend to buy more items from the ®rst are extremely dif®cult to undo, or even identify, later on. Tools
computer screen that appears. If products, such as airline
are needed at the level of subsumed objects to ensure that they
tickets, are presented alphabetically, then the system has a
are developed to operate ethically within systems. Some of
bias. The US Justice Department sued Microsoft in May 1998
in part because Microsoft insisted that its Windows 98 these tools already exist. At worst these tools prevent
operating system initially display only Microsoft-approved ``spaghetti code'' ± systems whose objects are too
icons ± especially internet Explorer ± strongly encouraging convoluted to maintain. At best they result in high-performing
user bias toward IE and away from (at the time) Netscape. systems.
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Project management
At a basic level, software development should be managed.
Lack of such management leads to failed, unsatisfactory, late
`` Technological systems, by nature,
repeat operations, even if those
and over-budget projects. Because of these negative operations have unethical
consequences, it is unethical to run software development
projects with managing them properly. There are many
impacts.
''
methodologies available for software development.
The capability maturity model (CMM) developers can anticipate unwanted impacts early in the
Once basic project management procedures are established, project, before objects become subsumed and dif®cult to
developers should continuously improve their methodologies, change. In particular, SoDIS seeks early adjudication of issues
knowledge and practices. The Software Engineering Institute's that would require rework of the product after delivery.
CMM describes how companies can build increasing quality
Practical applications
into their development methodologies. It describes ®ve levels of
software development skill in its ``CMM.'' These levels are: Outstanding technology projects ± ones completed on time,
within budget and with positive outcomes ± are the result of
1 Initial (ad hoc).
good management ®rst, technology second. They are
2 Repeatable (stable, controlled, project management). characterized by high-performance teams, rigorous project
management techniques and a focus on the human impacts
3 De®ned (codi®ed processes rigorously followed).
that the technologies will have. Those people and groups with
4 Managed (process measurement, quality targets). an interest in the outcomes, again, are the ``stakeholders'' in a
project.
5 Optimized (continuous process improvement).
Project stakeholders can be broadly de®ned to include those
Codes of ethics
directly and indirectly affected by both the project and its
Codes of ethics provide proactive ethical content to products. They may not have a voice, e.g. members of a
development processes. In 1999, the Association of community in which a facility is located. Nevertheless, the
Computing Machinery and Institute of Electrical and consequences of subsumption in technology development
Electronics Engineers Computer Society adopted a code of should be assessed for each stakeholder.
ethics to guide developers. Their so-called ``Software
Engineering Code of Ethics and Professional Practice'' Professionalism
provides a framework within which to plan and develop In the USA, an embattled atmosphere pervades ICT
subsumed objects. departments. I started working with one company because it
Software development impact statement (SoDIS) has had 100 percent turnover in its IT department for three
years. Management and IT often speak different languages,
The Software Development Research Foundation has a tool, and simply have dif®culty understanding one another.
called the SoDIS. SoDIS is a process that applies ethical criteria
to software project management plans and work breakdown Software failures continue unabated, and the National Institute
structures (WBS) to identify signi®cant issues before software of Standards and Technology (NIST) reported in 2002 that
design is underway. software bugs cost US users a stunning $59.5 billion per year.
As a development project is planned, it is broken down into The costs of subsumed errors in software design and
tasks that are manageable and predictable, known generally as development increase as projects progress. By planning out
a WBS. This minimizes risk and enables scheduling and the impact of activities and deliverables on stakeholders,
estimating. Each of these tasks has a number of data elements unforeseen risks and problems can be identi®ed and mitigated
associated with it, such as due dates, human resources early. Such procedures reduce project risks, allowing limited
required and dependencies on other tasks. resources to be deployed where they are most needed,
improving quality in the long run.
SoDIS adds an impact analysis process to project planning. It
®rst helps the user identify the stakeholders ± people and Even though techniques are available to bring software project
organizations that will be affected by the software ± and asks a management to a level of reliability where expectations and
series of questions for each of the tasks, such as: ``Will this task speci®cations can be consistently met, such as the CMM, most
cause harm to any stakeholder'' and ``Will execution of this task small business software projects today still take place at the ad-
compromise data integrity?'' By running this analysis, hoc level. Once organizations achieve higher levels of the
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CMM, the next change needed for widespread improvement of technological grati®cation. In all of this activity, attention to
project outcomes will be rigorous stakeholder impact analysis. impact analysis is frequently lost.
Conclusion In a 1997 Boston Globe article, Ethicist Rushworth Kidder

pointed out that in three crises ± the Challenger disaster, the
Subsumption ethics pushes ethical considerations into the
Orange County derivatives-induced bankruptcy and the
heart of all technology decisions. The Amish are a community
collapse of Barings Bank ± ``you ®nd one or a handful of
that has taken such questions seriously.
individuals making unethical decisions that get leveraged into
When Amish community member Michael Stoltzfus wanted to immense issues.'' Technology ampli®es the actions of
buy a phone in 1996, he raised a whole series of questions individuals, and subsumption ethics further describes the
about the effect it would have on his community, family and complex impacts of poor judgments in each of these cases.
psyche. Finally, his bishop allowed him to put a phone in a shed
where he could not hear it ring. Writing for Inc., Jerry Useem The Challenger disaster and the Florida ValuJet crash in 1996
reported, ``The Amish feel if they can hear a phone, it will govern are examples of modern systems failures, but they are not
their lives.'' Unlike Corporate America, ``the taboos on easily attributed to an individual or to one particular, bad
technology cultivate a bare-bones approach among the decision. They are instead a result of the subsumption of poor
Amish.'' The Amish, it turns out, care about the ethics of decisions in policy, design and implementation.
even the simplest of machines. Most technology wizards in the Complex systems have always failed. Complexity itself makes
USA feel that if they miss the latest technology release, they will such failures inevitable. And inattention to subsumption ethics
be left behind. In the heart of the high-tech marketplace, they makes them more likely. For those of us whose job it is to be
are certainly correct. Only, it is never enough. As with desire in
technical experts, we must also consider the consequences
general, satisfaction is short-lived.
that our decisions will have on real people. Especially when we
So on to the next conquest. The ``more is better'' mentality are creating complex or self-replicating systems, we need to
dominates, and the question, ``Should I really do this?'' typically begin to pay attention in advance to the effects ± the ethics ± of
falls by the wayside, a casualty of the need for more and more the decisions we are embedding into our technologies. J
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Supply chain effectiveness: strategy and
integration
Brian Leavy
Over the last 20 years, there has been increasing interest in supply chain
management as a potential source of competitiveness and value creation. This
development has come in two waves. First, was the trend toward strategic
outsourcing, as companies sought to become more agile by concentrating on core
activities and contracting out much of the rest. In time, this spawned new multi-tier
con®gurations, as outsourcing moved further back the value chain. In the current
Brian Leavy is AIB Professor of Strategic wave, as supply chains become more elaborate, the ability to manage them
Management at Dublin City University
effectively is increasingly being viewed as a strategic capability in its own right.
Business School. He can be reached at
brian.leavy@dcu.ie In spite of its growing signi®cance, however, supply chain management continues to
fall short of its great promise. According to a recent survey by Booz Allen Hamilton,
the business world is currently investing nearly US$20 billion annually in information
systems designed to improve supply chain performance. Yet, almost 50 percent of
companies continue to be disappointed with the impact (Heckmann et al., 2003).
Technology alone is not the answer. Strategy and management considerations are
also crucial.
Effective supply strategy is largely about resolving two fundamental questions ± what
Supply chain effectiveness has never to outsource, and when to partner.
been more important to commercial What to outsource
success, and the gap between the best
and the rest in many sectors continues Advocates, like Quinn (1999), suggest that any activity should be considered for
to widen. Technology alone is not the possible outsourcing, except parts or processes that are key to a ®rm's differentiation
answer. Effective supply chain and competitive know-how. Companies need to be clear on the potential bene®ts
management requires meeting two and risks.
main challenges, a strategic challenge
In many industries, over the last decade, the reasons in¯uencing outsourcing have
and an integration challenge. Deciding
been shifting as strategic needs have changed. The earliest moves were prompted by
what to outsource and when to partner
the search for lower input costs, as companies sought to farm out low-level
is at the heart of the ®rst, while the
production and services.
ability to align interests, develop
partnership networks and manage More recently, companies have increasingly come to recognize the advantages of
complexity and risk across the greater focus and resource concentration. Many now look to outsourcing strategic
extended enterprise is crucial to the operations, like manufacturing and logistics, to gain access to superior
second. This article examines them competencies, to transfer non-core assets and free up capital, to take advantage
both. of the economies of scale in manufacturing and logistics at demand levels way in
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excess of the ®rm's requirements, and to mitigate the business Core competence, as used by many managers, can be `à
risk in ®xed and working capital by sharing it with strategic dangerously inward-looking notion'', because competitiveness
partners (Chung et al., 2002; Kpoczak and Johnson, 2003). In `ìs far more about doing what customers value than doing what
the information technology (IT) industry, this has resulted in the you think you are good at'' (Christensen and Raynor, 2003,
rapid growth in the electronics contract manufacturing, and p. 162). Knowing the difference is one of the secrets to getting
third-party logistics, sectors over the last decade. outsourcing strategy and timing right.
For some companies, like IBM and Nortel, strategic Overall, too many ®rms continue to take a restricted view of the
outsourcing has been the key to transforming their fortunes. potential bene®ts and risks of outsourcing. More should be
IBM sees its recent strategic alliance with Lenovo as allowing it encouraged to look at opportunities for signi®cant value
to retain personal computing at the heart of its overall innovation, not just cost reduction:
e-business strategy without the former drag on margins
J From potential access to valuable competencies outside
(IBM, 2004), while Nortel's radical move from ``vertical'' to
the ®rm.
``virtual'' was driven by a management `èpiphany'' that the
®rm's traditional business model could no longer scale fast J From opportunities to renew themselves and transform
enough to keep pace with competitors like Cisco (Fisher, their performance through recon®guring their business
2001). models.
However, the decision to outsource carries risks. One of the Companies should also be encouraged to take a more
most important is the risk of losing skills with untold future value strategic view of the potential risks and develop scenarios to
for short-term advantage. Years ago Eastman Kodak came to evaluate them fully. Among the most signi®cant are:
look back at its decision to exit the camcorder market as an
J The opportunity cost of not continuing to develop particular
opportunity lost to develop skills that later were to have much
skills in-house.
wider and more exciting application. In contrast, Canon chose
to remain in the semiconductor business despite failing to J The risk of making the wrong integration versus outsourcing
make much impact in the calculator market, a decision that left (technology versus business model) bet as industry
it well positioned to play in the of®ce products when electronic dynamics change.
imaging later emerged as a key technology.
When to partner
Core competencies are rarely synonymous with discrete
Closely tied to the decision on what to outsource is the
functions or technologies but tend to be deeply embedded
question of when to partner and when to source from the
in the collective know-how that re¯ects their integration
market. Today, supplier partnering is much in vogue.
(Prahalad et al., 2001). This is why many outsourcing
Comparison with the more traditional perspective on the
companies like Nike and Nokia, choose to retain some
buyer-supplier relationship can help to highlight the bene®ts
manufacturing activity and closely tie it to engineering and
and risks inherent in supplier partnership strategy.
marketing to preserve the cross-functional capabilities they see
as key to their future success. The traditional approach to buyer-supplier relations is based on
two main premises. One is that the relationship is best
Most importantly, strategists need to know when and where in
managed through the market mechanism, where suppliers
an industry's evolution the economics favour outsourcing, and
compete with each other for the buyer's custom, buyers shop
where and when they favour integration. According to
around for the best deal, repeat business is not guaranteed, the
disruptive innovation guru, Clay Christensen, most markets
parties communicate with each other at arm's length and
evolve to a stage where the average customer is over-served
market discipline keeps them independently on their toes. The
with features and the product becomes a commodity. When
second premise is that the buyer and supplier are competitors
this happens, the bene®ts of integration migrate further up or
for margin. Within this perspective, company strategists are
back the value chain. The personal computer is a classic
advised to control the power of their suppliers by maintaining
example. Over time, the key driver of differentiation has
multiple sources, avoiding any uniqueness in the relationship
changed from proprietary product features to microchip
that might make the cost of switching high, and widening the
design and customer relationship management.
range of substitutable materials to maintain a downward
Key to success pressure on supplier margins (Porter, 1980).
The trick is to recognize when the key to success changes from In contrast, the partnership approach is premised on the belief
technology to business model. Dell got this right in the personal that the buyer-supplier relationship is better managed through
computer market, and now believes the time is ripe for direct co-operative agreement, where buyers and suppliers
business model superiority to win out again in inkjet printers. seek long-term commitments from each other, and
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communicate directly and deeply, sharing information and
`` Supply
know-how. chain effectiveness has
The supplier is co-opted into the buyer's competitive strategy, never been more important to
with the discipline of the buyer's marketplace keeping the commercial success, and the gap
partnership on its toes. It also views buyer and supplier as between the best and the rest in
partners-in-pro®t, where both can be trusted to seek an many sectors continues to
''
equitable sharing of the gains. It is a strategy that fosters a high
widen.
degree of interdependence between the buyer and a
concentrated network of suppliers, and is pursued in the
belief that it can generate signi®cant economies of cooperation
for both parties, from closer coordination of schedules, sooner or later come to feel held back and restricted? These
concerted effort on cost saving and the sharing of expertise are questions that continue to affect all partnerships as they
in product and process innovation. develop over time, and few have found enduring answers to
date.
The partnership approach insulates the supplier from the full
winds of competition in its own segment of the market chain, Clear bene®ts for both parties
while offering the buyer many of the advantages of vertical
The highly successful 20-year partnership between Hewlett-
integration, with little of the capital investment, bureaucratic
Packard and Canon in LaserJet printers is remarkable for two
mass or administrative overhead normally required (Leavy,
things, its depth and longevity. According to the legendary
1994).
former head of Canon, Ryuzaburo Kaku, clear bene®ts for both
In any given case, the potential bene®ts need to be compelling parties (the ability to ``market laser printers globally on a scale
since effective supplier partnerships can be costly to establish neither one of us could have managed independently''), a level
and maintain. One strategic consideration regarding when to of trust that is deeply organizational not just contractual (``we
partner is the current state of technology in the supply sector. need to know that we can deal with these people on all levels
For many ®rms it makes most sense to look to the market for and that they will be truly trustworthy partners'' ± the original
standard, technologically stable items, and where supplier agreement is a two-page document), and the ability to scale
know-how is of limited value for downstream product or together with the growth in the market, have all been essential
process development. Most bearings and relays for to its overall success (Sandoz, 1997).
automobiles and resistors and capacitors for the IT industry
Relationships remain contingent
tend to fall into this category.
Partnership, even in the light of such shining examples, is not
Cost versus responsiveness always the right option. Canon and Hewlett Packard each have
At the other end of the spectrum, ®rms may prefer to keep their partnerships with other ®rms, but none that work so well. They
options open where the technology is dynamic and clear have also yet to ®nd compelling reasons to expand their
industry standards have yet to emerge. For cases in between, a partnership in LaserJet printers to other opportunities. Such
closer relationship is often preferred. For example, the auto relationships always remain contingent, and the commercial
companies tends to favor partnership for highly customized logic underpinning them is always likely to change as industries
components or integrated subsystems that require strong evolve. At Intel, for example, as the cost of developing each
engineering capability and have dynamic, but predictable, new generation of microprocessor continues to escalate (US$2
technology, like power-steering, suspension, braking and air million in 1980, US$1 billion in 2000), and ever greater volumes
conditioning systems. A related consideration is appropriately are needed to sustain the investment, the company sees itself
matching supply chain emphasis with the predictability of with little choice but to play a more forceful role in driving
demand. According to Fisher (1997), too much value gets downstream markets forward, even if this makes many its own
destroyed when trying to manage supply chains for ef®ciency, strategic partners uncomfortable and keeps them under
where responsiveness should be the priority and vice versa (see pressure.
also Lee, 2002). In general, market sourcing emphasizes cost,
The basic nature of any commercial partnership is well
partnership responsiveness.
captured by the Japanese image of ``same bed, different
All ®rms considering strategic partnership run the risk of dreams''. The relationship is rarely one of economic equals,
hitching their fortunes to the wrong star. Will the partners be and few are the cases where the partners are fully prepared to
able to keep pace with each other, as the partnership grows sink or swim together in times of serious industry downturn or
and develops? Will they continue to trust each other when it loss of market position. Insights from the traditional perspective
comes to sharing the bene®ts? Will one or another party, help keep the buyer and supplier mindful of such underlying
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political realities, especially the more dependent one, even advances in technologies such as extended enterprise
while the partnership continues to ¯ourish. resource planning (eERP) and radio frequency identi®cation
(RFID) hold great promise. Yet, among the experts, ``people
In sum, the partnership approach to supplier relations offers
and relationships'' are still ``the dominant topics of the day'', not
many potential bene®ts, and is particularly worth considering
technology (Kirby, 2003, p. 65).
when:
Designing and aligning for supply chain effectiveness
J there is substantial scope for economies of cooperation;
In spite of all the emphasis on knocking down ``chimneys'' over
J supplier know-how is of signi®cant potential value for
the last decade or more, there is still a lot of value ``trapped'' in
downstream product and process innovation;
too many supply chains due to inadequate cross-functional
J the company's own value proposition emphasises alignment. The quality and timeliness of demand/supply
responsiveness more than cost; and information ¯ows are still rarely what they should be, while
design for manufacturability and for supply chain ef®ciency and
J industry dynamics place a premium on risk sharing.
responsiveness remains less than widely practised.
Costs and risks
The need for such alignment is particularly acute in industries
However, partnership also carries costs and risks. Among the where functionality and/or fashion cycles are short and demand
most signi®cant are: uncertainty is high. In the auto industry, great strides have
already been made to address this challenge, most notably
1 The switching costs associated with relationship speci®c
through the development of collaborative engineering
investments and obligations and the related risks of:
methodologies and the adoption of shared design platforms.
J the relationship holding back the ambitions of individual `Èngineer it once, use it often'' is how Ford COO, Nicholas V.
partners; and Scheele, describes this latest initiative (Welch and Kerwin 2004,
p. 67). This is the kind of approach that has helped Honda to
J any one party becoming over-dependent, wittingly or
become the most ¯exible carmaker in the industry, while many
otherwise.
of the others struggle to catch up. In the telecommunications
2 Potential loss of ef®ciency and strategic ¯exibility as the industry, similar design principles are currently helping Motorola
``visible hand'' of managed relationship replaces the close the gap with Nokia (O'Connor, 2004).
`ìnvisible hand'' of market discipline. In the IT industry, supply chain performance has been
Finally, the balance of advantage between market and considerably enhanced through strategies of mass-
partnership continues ebb and ¯ow over time. Much of the customization. The well-known Dell model is a speci®c
coordination, once achievable only through partnering, can example of ``delayed differentiation'', the basis for which
now be realised through electronic data interchange and rests in both modular design and manufacturing. Modularity
Internet commerce, without the need for supplier development allows products to be assembled in a variety of sequences and
programmes or long term obligations. at a variety of locations. It also allows a high degree of
customization to be offered from a relatively modest range of
In many industries, B2B electronic marketplaces are rapidly basic modules (for example ± two processor options, three
emerging that will reduce transaction costs further, and make memory options and three hard-drive options offers a total of
the cost of switching negligible, while improving supply chain 18 con®gurations from eight modules ± add one more memory
visibility and responsiveness. This trend has already begun to option and one more hard-drive option and the number of
shift the primary bene®t of partnership away from cost toward con®gurations grows to 32 from just ten modules). Planning
value innovation, with some of the biggest payoff likely to come inventory to forecast, with all the uncertainties involved, can be
through the more effective management and integration of con®ned to the lower value, modular level, and the most
supply chains, not just from the strategic choices shaping their differentiated stage of manufacturing delayed until speci®c
con®gurations. customer orders come through.
Management and integration Delayed differentiation

As supply chains become more complex and web-like, their The overall result is more ¯exibility, shorter cycle times, and
effective integration is fast becoming a strategic capability in its lower overall levels of inventory than less modular designs
own right. As William Copacino of Accenture notes, in nearly accommodate. Dell may be the master at delayed
every industry segment the ``performance gap is widening'' differentiation, but the principle is now being used to great
between the best and the rest. The key variables are effect by others in the IT industry, such as Hewlett Packard and
information technology and relationships. Few doubt that Xilinx. It is also gaining traction in the auto industry (Feitzinger
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and Lee, 1997; Brown et al., 2000; Benko and McFarlan, Companies like Intel now tend to think in terms of three main
2003). However, designing for modularity and supply chain categories:
effectiveness is just not possible without effective cross-
1 Transactional relationships for low value, non-critical items.
functional cooperation and a measurement system that
promotes it. 2 Basic partnerships for high value, non-critical items.
Developing and sustaining supplier partnerships 3 Strategic partnerships for high value items that involve
exchange of technology or other competitive capabilities.
Even where partnering is the right strategy, too many
companies today ``leave real money on the table'' as nearly The most effective supply chain integrators recognize that
half of all partnerships fail to realize their true potential, and the these relationships require different metrics, processes, people
reasons are usually rooted in ``very human factors: fear, and mindsets, and manage them accordingly (Kirby, 2003;
mistrust, culture, and power'' (Rudzki, 2004, pp. 45-6). Rudzki, 2004).
Suppliers often worry about having too little in¯uence in the
Managing risk and complexity
relationship and becoming over-dependent on their partners.
Buyers worry about a potential lost of control and ¯exibility, as As the trend toward outsourcing continues to grow, the
well as the inequitable distribution of the commercial risk. demand for more responsiveness at lower and lower cost
Building effective relationships is rarely easy. Sustaining them in continues unabated, and supply chains are becoming
dif®cult times can be very testing (Hand®eld et al., 2000). characterised by increasingly complexity, lower pipeline
inventories and greater exposure to risk.
In the auto industry, for example, Honda and Ford have both
developed tier-one relationships with Tower Automotive, a Supply chain risk comes in a variety of forms. On the supply side,
producer of stamped parts and welded assemblies. Up to now, overseas sourcing can increase the risk of supply disruption, in-
the nature of the two partnerships has been very different. In transit delays, adverse currency ¯uctuation, and intellectual
December 2002, Tower surprised the industry by announcing property leakage. To date, few companies tend to make more
its intention not to re-bid on its contact to supply frames for the than intuitive assessments of these potential risks. Yet, it is
Ford Explorer, because it was no longer prepared to meet its becoming increasingly important for companies to recognize
partner's excessive demands on price. that the lowest cost supply chain may not be the same as the
risk-adjusted lowest cost supply chain (Hauser, 2003). Some
The contrast with Honda could not be more dramatic. Honda
have now begun to draw on the kind of risk assessment tools
typically starts with a product cost goal that re¯ects market
already common in the insurance industry to quantify the level of
conditions, and then negotiates with its suppliers on how to
risk and adopt supply chain policies to deal with it accordingly.
meet this goal, while trying to protect the margins of both
partners. Through its supplier development program it then A related development is the growing use of risk-pooling
helps its partner to ®nd the productivity gains needed to make arrangements, which may be as simple as several ®rms agreeing
this a reality. Honda's suppliers see their partner as demanding, to share safety stock on common items. Many ®rms in the IT and
but fair. A typical example is Honda, early in the relationship, auto industries, such as Dell and Volkswagen, also seek to share
encouraging Tower Automotive to double the productivity of a supply chain risk through the growing use of just-in-time supplier
metal stamping operation, while sending in its own engineers to hubs, located close to the manufacturer's plant where the
help redesign the process (Laseter, 1998). In the best supplier supplier continues to fund the inventory until it is required on the
partnerships, this kind of value transfer is rarely one-way. factory ¯oor, often with the whole incoming logistics operation
Toyota already gets 60 percent of its innovation out of its supply managed by third party specialists (Lee, 2002).
chain (the norm is less than 40 percent), largely because the
One of the most prevalent risks on the demand side is the
company leads the industry in the development of superior
instability generated by the distortion of market information as it
knowledge-sharing processes across its supplier network, a
progresses backwards through the supply chain. This is often
capability that takes much time and investment to develop
referred to as the ``bullwhip'' effect. One common source of
(Dyer and Hatch, 2004; Jackson and Winkler, 2004).
such distortion is temporary market stimulation (from sales
Clearly, all ``partnerships'' are not the same, and the term is promotions and the like) poorly coordinated with production
overused. In the IT industry recently, Cisco began giving special and purchasing. Another is the extensive use of `èconomic
discounts to strategic distribution partners such as IBM and order quantity'', which can translate the smoothest demand
SBC Communications as part of its revival strategy. For many pattern at the market end to very uneven demand signals
of its smaller resellers, greatly affected by this change, Cisco further back the chain. The potential for such distortions
had gone ``from being our best partner in good times to our increases as supply chains become increasingly complex,
worst enemy in bad times'' (Burrows, 2003, p. 47). multi-layered and global in nature.
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Greater `ènd-to-end visibility'' across the supply chain will help Feitzinger, E. and Lee, H.L. (1997), ``Mass customisation at Hewlett-
to mitigate the impact of such distortions. Companies are Packard: the power of postponement'', Harvard Business Review,
January-February, pp. 116-21.
increasingly looking to new Internet-enabled systems to help
provide the kind of visibility and synchronization needed, and the Fisher, M.L. (1997), ``What is the right supply chain for your product?'',
Harvard Business Review, March-April, pp. 105-16.
auto industry is moving the bulk of its supply chain online faster
Fisher, L.M. (2001), ``From vertical to virtual: how Nortel's supplier
than most. Many of the majors already participate in the Covisint
alliances extend the enterprise'', Strategy + Business, Quarter 1, online,
online exchange, presenting suppliers with a common platform available at: www.strategy-business.com
and set of administrative protocols for doing business with them.
Hand®eld, R.B., Krause, D.R., Scannell, T.V. and Monczka, R.M.
Such developments hold great promise, and for some even the (2000), `Àvoid the pitfalls in supplier development'', Sloan Management
Review, Winter, pp. 37-49.
prospect of centralised supply chain optimisation, once these
Internet-enabled systems become powerful enough. Seductive Hauser, L.M. (2003), ``Risk-adjusted supply chain management'',
Supply Chain Management Review, November-December, pp. 64-71.
as this seems, managers should not get too distracted by it.
The political realities of the extended enterprise favor a more Heckmann, P., Shorten, D. and Engel, H. (2003), ``Capturing the value
of supply chain management'', Strategy + Business, Quarter 2, online,
``federalist'' view, where each supply chain partner is seen to be
available at: www.strategy-business.com
`àn independent entity working to maximize its own objectives
IBM (2004), ``Lenovo to acquire IBM Personal Computing Division:
and trade-offs as a `citizen' of multiple supply networks'' (Oliver
creating new leading PC business with global market reach'', IBM
et al., 2001). Three decades of MRP-ERP best practice have Press Release, White Plains, NY, December 7.
taught us that matching demand and capacity is a dynamic Jackson, B. and Winkler, C. (2004), ``Building the advantaged supply
process in which any kind of centralized scheduling will always network'', Strategy+Business, Quarter 3, online, available at:
need to be leavened with a high degree of interactive local www.strategy-business.com
adaptation and control to be fully effective. Kirby, J. (2003), ``Supply chain challenges: building relationships'',
Harvard Business Review, July, pp. 64-73.
Conclusion
Kopczak, L.R. and Johnson, M.E. (2003), ``The supply chain
Supply chain effectiveness has never been more important to management effect'', Sloan Management Review, Spring, pp. 27-34.
commercial success, and the gap between the best and the Laseter, T.M. (1998), ``Balanced sourcing the Honda way'',
rest in many sectors continues to widen. Making supply chain Strategy + Business, Quarter 4, online, available at: www.strategy-
management a competitive advantage requires meeting two business.com
main challenges, the strategic challenge and the integration Leavy, B. (1994), ``Two strategic perspectives on the buyer-supplier
challenge. Developing deeper insight into how to determine relationship'', Production and Inventory Management Journal, Vol. 35
No. 2, pp. 47-51.
what to outsource and when to partner is the key to addressing
the ®rst, and the ability to align interests, develop partnership Lee, H.L. (2002), `Àligning supply chain strategies with product
uncertainties'', California Management Review, Spring, pp. 105-19.
networks and manage complexity and risk across the extended
O'Connor, R. (2004), ``Secrets of the masters'', Supply Chain
enterprise is crucial to meeting the second. Companies that
Management Review, January-February, pp. 42-50.
can rise to both will set themselves apart. J
Oliver, K., Chung, A. and Samanich, N. (2001), ``Beyond utopia:
References the realist's guide to internet-enabled supply chain management'',
Strategy + Business, Quarter 1, online, available at: www.strategy-
Benko, C. and McFarlan, W. (2003), ``Metamorphosis in the auto

business.com
industry'', Strategy & Leadership, Vol. 31 No. 4, pp. 4-8.
Porter, M.E. (1980), Competitive Strategy, Free Press, New York, NY.
Brown, A.O., Lee, H.L. and Petrakian, R. (2000), ``Xilinx improves its
semiconductor supply chain using product and process Prahalad, C.K., Fahey, L. and Randall, R.M. (2001), ``Creating and
postponement'', INTERFACES, July-August, pp. 65-80. leveraging core competencies'', in Fahey, L. and Randall, R.M. (Eds),
The Portable MBA in Strategy, 2nd ed., Wiley, New York, NY.
Burrows, P. (2003), ``Cisco's comeback'', Business Week,
November 24, pp. 42-8. Quinn, J.B. (1999), ``Strategic outsourcing: leveraging knowledge
capabilities'', Sloan Management Review, Summer, pp. 9-21.
Christensen, C.M. and Raynor, M.E. (2003), The Innovator's Solution,
Harvard Business School Press, Boston, MA. Rudzki, R.A. (2004), ``The advantages of partnering well'', Supply Chain
Management Review, March, pp. 44-51.
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Strategy + Business, Quarter 3, online, available at: www.strategy- Sandoz, P. (1997), Canon: Global Responsibilities and Local Decisions,
business.com Penguin, London.
Dyer, J.H. and Hatch, N.W. (2004), `Ùsing supplier networks to learn Welch, D. and Kerwin, K. (2004), ``Detroit tries it the Japanese way'',
faster'', Sloan Management Review, Spring, pp. 57-63. Business Week, January 26, pp. 66-7.
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Strategic management lessons from
e-commerce
Maris G. Martinsons
Maris G. Martinsons is a Professor of The emergence of a new technology typically brings both opportunities and risks.
Management at the City University of Hong With the emergence of the internet, both the opportunities and the risks have been
Kong and Research Director of the Paci®c
enormous for entrepreneurs, business managers, investors, consultants, and others.
Rim Institute for the Studies of Management.
Hundreds of thousands of new enterprises have been started all over the world with
the hope of capitalizing on the opportunities that has emerged from the
commercialization of the internet. A few years ago, there was enormous optimism
about the prospects of these enterprises.
This period of irrational exuberance is now well over. Very few dot-com enterprises
have become consistently pro®table or even have a business model that is
economically sustainable. Many of these enterprises have shut down already while
others are in the midst of a death spiral.
As we enter a new era with more realistic expectations about e-commerce, it is useful
to undertake a systematic review of the recent past. By doing so, we can learn from
experience, and avoid the mistakes that others have made. This article summarizes
my research on the ®rst era of internet-driven ventures, and highlights a number of
important lessons for strategic management. These lessons apply not only to those
managing e-commerce, but also more generally to anyone who is a business
manager.
Research design and method

Many ventures all over the world were Over the last ®ve years, I have conducted several systematic studies of online
started with the hope of capitalizing on business ventures in both North America and East Asia. My studies have employed a
the opportunities provided by the variety of quantitative and qualitative methods to examine over 100 different
internet. Intensive research on the ®rst e-commerce ventures. These ventures sought to generate revenue and pro®t from a
era of internet-based enterprises wide assortment of online business activities, including product sales, services
reveals four categories of failures. Each marketing, and online recreational activities.
type of failure suggests a speci®c
lesson for strategic management. This My research interest was not on the technological aspects of these ventures, but
article highlights the importance of a rather on how and why they were established, and how they were subsequently
sound business idea, good market organized, led, directed, and operated. These questions were typically answered by
knowledge, long-term planning, conducting interviews not only with those who founded and led these ventures, but
external relationships, and balanced also with their former business partners, customers or clients, and other industry
business development. insiders. In most cases, I conducted between three and ®ve interviews with the
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stakeholders of the enterprise or other knowledgeable industry
`` Many
insiders. The interviews in every case were augmented by of the e-commerce ®rms
secondary data from media reports and company documents.
failed because of short-sighted
Consistent pattern management. Their strategic
My cumulative ®ndings reveal a consistent pattern of activities
thinking and planning was
across different industries and independent of start-up size.
This pattern clearly points to basic management shortcomings
inadequate.
''
as the key factor in the demise of most dot-com ®rms. Most
commonly, there was a blatant disregard for the fundamental with dot-com ®rms? I believe they are. Let me explain why and
principles of strategic management. how.
Strategic management seeks to align an organization with its Implications for business
business environment. It includes the major decisions and
Back in the year 2000, the Wharton School at the University of
initiatives that shape the organization and determine its long-
Pennsylvania brashly claimed that it would teach its MBA the
run performance. Long-term business success typically
new rules of business. A major advertising campaign was used
requires the effective coordination and integration of different
to promote this emerging vision. Today, almost everyone
functions like research and development, marketing and sales,
agrees that those new rules simply do not exist.
production, and ®nancial management.
Therefore, it is appropriate to consider the new economy as
Key failure factors
simply the old economy setting up on a new street. The basic
Many of the e-commerce ®rms failed because of shortsighted management skills and tools needed in an e-commerce
management. Their strategic thinking and planning was venture are not that different from those required in a
inadequate. Several of the dot-com ®rms that I studied mundane, low technology enterprise. It is imperative to
would have signi®cantly improved their prospects for success understand the speci®c characteristics of the industry and
if only their top management had taken the time to formulate the key success factors in that context. There is undoubtedly a
and implement an effective business strategy. Perhaps more requirement for online businesses to possess their own
importantly, many of the remaining ventures would never have expertise in the technology of the internet or to contract out
been started, or would have been aborted before large for that expertise. Nevertheless, online retailers and B2B
resource commitments were made, if only their would-be marketplace providers have to follow the same business rules
founders had understood the essential role of strategic as their brick and mortar peers.
management in achieving business success.
In addition, a high failure rate among new ventures is not unique
Less than 20 percent of the dot-com founders in my research to dot-com ®rms. According to historical data available from
had either a long-term vision or a contingency plan for their many sources, such as the US Commerce Department and
business. Fewer than ®ve percent had both a vision and a Industry Canada (a ministry within the national government),
contingency plan. These entrepreneurs had neglected to about 80 percent of all businesses in North America fail within
consider what their existing or potential competitors might their ®rst ®ve years. Even in the East Asian economies that have
do. They also were unsure how the needs and preferences of experienced rapid economic development in recent decades,
their customers might develop over time. As a result, they like Hong Kong, Singapore and Taiwan, the comparable ®gures
lacked the foundation that is needed to make key business are at least 70 percent.
decisions, including how or where to guide the venture beyond
The traditional reasons for the failure of a new venture include
its ®rst few months (Mintzberg and Westley, 2001).
inadequate ®nancing, wasteful use of money, poor
A few dot-com leaders had engaged in some strategic thinking. relationships with customers, suppliers or employees,
Unfortunately, even their decision-making was commonly inappropriate pricing, and taking the competition too lightly.
based on intuition rather than systematic or structured Poor engineering and technology management represents
analysis. Intuition can be effective in business if it is based another important and common factor in the demise of
on a wealth of experience and supported by good judgment technically sophisticated enterprises. However, management-
(Langley, 1995). But, by de®nition, such experience simply did related factors have played an increasingly prominent role in
not exist with emerging phenomena such as the internet. Are business failures over the last two decades. The most common
these research insights helpful to business people and of these management-related causes have been poor
information technology (IT) managers who are not involved organization, the lack of market-speci®c experience,
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inadequate attention to key performance indicators, and J Following someone else is not enough. You must improve
insuf®cient expertise in key functional areas. on their efforts and have the capability to develop your
business over time. Perhaps more importantly, you must
This may be attributed to the growing sophistication of
develop a long-term game plan that considers the various
management tools and techniques. Good management
tactical moves and countermoves that you and your new
practice was once a competitive advantage. Today, it is a
rivals will make as you compete for customers and critical
competitive necessity in almost every industry. As a result, the
resources. This requires a good understanding of the
failures of the internet-based enterprises offer some valuable
market, a viable strategy, and the resources to implement
lessons for managers in general and those managing IT-based that strategy.
businesses in particular. In fact, there is an important lesson to
be learned from each type of dot-com failure. J Relationships remain a key to business success. Even a
company operating in cyberspace must have good working
A typology of failures relationships in the physical world ± with suppliers, ®nancial
My analysis of the e-commerce ventures reveals four types of service ®rms and logistics providers. Most of the successful
failures: online ventures had taken the time to establish solid
relationships with government of®cials, banks, and delivery
1 What were they thinking? ± Many would-be entrepreneurs services. This relationship-based aspect of e-commerce
simply followed their own Field of Dreams, believing that just was more evident in East Asia.
like in the Hollywood movie about baseball, `ìf I build it, they
J Business development is a slow and steady process. As a
will come''. They expected to attract customers by
result, entrepreneurs need to adopt the mindset of a
developing a web site that ®t their personal interests.
marathon runner rather than someone seeking to win a
2 Me, too ± Many other individuals looked around to see what 100-meter sprint. It takes time to develop not only external
others were doing, and then copied them. This type of fast relationships, but also the internal capabilities and
follower strategy can be successful given in some cases. management systems to handle a growing volume of
Unfortunately, the dot-com entrepreneurs in this category business. Different elements of the organization must be
did not study ®rst-movers or their own business developed simultaneously and aligned with each other in
environment. order to avoid a bottleneck to growth. This takes time,
energy and commitment.
3 I don't need any friends ± This category of businesses
neglected the importance of relationships. Putting a good The bottom line
concept on the internet is not enough. The online presence
The recent performance of e-commerce ®rms in both North
must be complemented with supporting systems to ensure
America and East Asia has followed a well-established pattern
reliable supplies, to facilitate payments, to enable
of business success and failure. Correspondence with
distribution, etc.
research and consulting colleagues working in other parts of
4 I have the golden touch ± Quite a few dot-com ®rms were the world, such as Europe and Australia, indicates that my
successful in the short term. However, many of these ®rms research ®ndings are consistent with their own anecdotal or
ultimately failed. Their founders often had a good business case-based evidence. In terms of the bottom line, factors such
idea, but they got greedy or arrogant. Fueled by the media as adequate ®nancing, appropriate knowledge and skills, a
hype about the internet, they expected to become good understanding of customer needs and, perhaps most
millionaires almost overnight. They expanded their market importantly, adhering to the principles of strategic management
reach or their product line much too quickly. remain essential for business success.
Lessons for management In this respect, enterprises with a fundamental reliance on the
internet or other types of IT are not very different from those that
Each type of e-commerce failure suggests a speci®c lesson for do not. It cannot be denied that the internet has resulted in some
management. The management lessons may be summarized very fundamental changes. The internet provides a vast array of
as follows: business opportunities (Martinsons and Martinsons, 2002) even
J Just because you have an idea does not mean that it will be as its expanding use and technological sophistication create
new integration and coordination challenges.
successful. Even a little bit of market research or devil's
advocacy will typically reveal a fatal ¯aw or at least some However, my own research clearly shows that the internet does
weakness in your basic concept. If the basic business idea not change everything. The principles of managing an online
is unattractive or ¯awed, even the greatest managers and venture are fundamentally the same as those for managing a
marketers are unlikely to make it successful. more traditional business.
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This is reassuring to those of us who provide management
`` The
education and related consulting services. It is good to know principles of managing an
that the ideas and principles that we espouse remain relevant
online venture are fundamentally
and potentially very bene®cial, not only to the business
the same as those for managing a
community in general, but particularly to the large number of
enterprises that are trying to capitalize on the potential of the
internet and IT in general. The general value of strategic
more traditional business.
''
management is comforting to all of us who preach it and
practice it. References
At the same time, we can hope that many entrepreneurs and Langley, A. (1995), ``Between `paralysis by analysis' and èxtinction by
managers of IT-enabled enterprises will bene®t from the instinct''', Sloan Management Review, Vol. 36 No. 3, pp. 63-76.
experiences of dot-com ®rms. Learning the lessons that have Martinsons, M.G. and Martinsons, V. (2002), ``Rethinking the value of
been outlined here will undoubtedly reduce the costly trials and IT, again'', Communications of the ACM, Vol. 45 No. 7, pp. 25-8.
errors that are made in starting up and developing IT-enabled Mintzberg, H. and Westley, F. (2001), ``Decision making: it's not what
ventures. J you think'', Sloan Management Review, Vol. 42 No. 3, pp. 89-93.
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Getting your infrastructure components to
work together
Renate Rooney
Yesterday, you had your quarterly call with analysts. This morning, your stock is
down. Why? The analysts say they are concerned that your organization is unable to
execute its strategies.
You have spent countless hours with your leadership team developing a vision and
strategies that you believe will propel your organization to the next level and give you a
Renate Rooney is the President and CEO of signi®cant competitive advantage. Your leadership team has prioritized initiatives and
Renate Chisholm Rooney Associates, LLC, a
created detailed implementation plans. Yet your results are inconsistent. So the
Management and Operations Consulting
®rm. Renate can be reached at 978 456 question you ask is why?
7377, rrooney@rcr-associates.com or
Why aren't you able to deliver on your corporate objectives? Why aren't your strategic
www.rcr-associates.com
initiatives delivering the results you expected? The answer: You haven't aligned your
strategies with your people, processes and technology. According to Fortune
magazine, ``Less than 10 percent of strategies effectively formulated are effectively
executed.''
By learning how a successful company aligns its strategy with its people, processes
and technologies, and discovering how your business can do the same, you will be
on your way to getting your ®rm into the 10 percent that effectively execute their
strategies. But this knowledge is just the ®rst step.
To execute this alignment effectively requires the right culture, speci®c performance
measures and a de®nitive plan for change. Companies that make the commitment to
When a company goes through a do this work will ®nd it worth the effort when their business starts reaping the rewards
reorganization or merger, or when it of successful strategic execution.
sets a new vision, many individual new
pieces must be set in motion. Where Aligning your strategy with your company's people, processes and technology
companies often fail is in the typically requires signi®cant change in several, if not all, areas of the organization. Is
implementation stage, not fully your company open to these changes? Have you planned effectively to ensure that
integrating all infrastructure the changes you want to make are successful? And how will you know how you're
components so they will function in doing along the way?
concert, rather than in isolation. This
article offers guidelines for doing this Before delving into the details of day-to-day operational changes, it is important to
right, i.e. making all these new pieces take the time to plan for change, create the right culture and design a way to measure
®t so they work together. your progress.
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Planning for change You may have a culture that does not accept change easily,
while the same initiative in another organization would be quite
A Wharton-Gartner Survey shows that the number one
successful. Each organization has its unique culture with both
problem that managers face is the inability to manage
change effectively or overcome internal resistance to change. positive and negative drivers. Understanding and managing
Why? Wharton School Professor Lawrence G. Hrebiniak says it those drivers is key to the success of any change initiative.
is because change is dif®cult. It creates resistance. People lose Take the case of an equipment manufacturer based in Idaho.
power, resources and autonomy ± or they perceive that they Its new CEO encountered resistance when he launched a
might lose autonomy. But the real problem, he says, is that reengineering initiative. The organization was distrustful and
people do not lay out a change plan. They do everything at thought the plan was just a ploy to cut staff.
once.
But the CEO demonstrated hands-on involvement,
Implementing change will not happen without a detailed,
commitment and leadership, and employees soon realized
prioritized action plan. Change takes time; you cannot do it all
that staff reductions were not on the agenda ± in fact, the
at once. For a change implementation to be effective, you need
opposite occurred. The CEO conducted town meetings with
to do the following:
employees on a regular basis to lay out his strategy, solicit
1 Establish priorities. Establish up front the organization's feedback/input and acknowledge individual contributions. He
priorities. Trying to do everything at once sets you up for even engaged customers to be part of the sessions.
failure.
By helping to alleviate the inherent fear and distrust within the
2 Develop detailed action plans with accountabilities for each organization, the CEO was able drive a successful
objective. People will be more successful if they understand reengineering effort.
the objective and their accountabilities, deliverables and
timeframes. So it is important to understand your culture ± its strengths and
style ± and its potential to help or hinder your change initiatives.
3 Identify risks and develop contingency plans. Every change
Table I shows a comparison of cultural drivers and cultural
has risk associated with it. As soon as you can identify risk,
barriers. Where does your culture fall?
develop contingency plans. Do not be afraid to execute the
contingencies. Organizations that embrace and implement change readily
have adopted these cultural drivers, while those that resist
4 Conduct stakeholder analysis. Proactively seek the
change and experience less than desired results typically
opinions of those affected by the change. Failing to
experience some of the cultural barriers.
recognize those who in¯uence or are in¯uenced by the
change can have dire consequences to its successful If you ®nd that your organization is entrenched with these
implementation. cultural barriers, then you need to create the environment for
5 Develop a communications strategy. Create a change. Any change to your culture needs to start with the
communications strategy and stick to it! Effective organization's leadership:
communication is key to success. It allows you to gain
buy-in from appropriate stakeholders and keep them Table I
involved throughout the project. Do not assume people
Cultural drivers Cultural barriers

know things. The golden rule ± you can never over-
communicate! Open, honest, multi- Top-down communication,
directional communication passive/aggressive behavior
6 Measure, monitor and control. Establish appropriate
Personal accountability Continually not following
metrics. Whether the news is good or bad, measure the through on commitments
performance and results and act accordingly. Weigh the
Innovation Resistant to change
project priorities, evaluate the risks regularly and implement
contingency plans when necessary. Customer-focused Internally focused
Creating the culture Integrated thinking and Silo thinking and actions
action
The culture of your organization can either enable your strategy
Quality focus Short-term solutions, ``flavor
or work against it to the point of failure. All organizations have of the month initiatives''
an underlying culture that in¯uences a change's success or
Flexible, adaptive to change Stagnant, living in the past
failure.
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1 Set the example. Any changes to the corporate culture will
`` Why
start with you. You must model the behaviors you want aren't you able to deliver on
within the organization. Your leadership and commitment
your corporate objectives? Why
will in¯uence others' behaviors. For example, a high tech
aren't your strategic initiatives
®rm we worked with attempted to change its customer
delivering the results you
service approach. The top of®cers showed the way by
personally demonstrating the speci®c ways the organization
expected? The answer: you
would enhance its service and recognizing those who
haven't aligned your strategies
embraced the new program. with your people, processes and
2 Communicate. Announce the change! Establish two-way-
technology.
''
dialogue with your employees and keep it going.
Establishing communication channels with employees will
provide you and your leadership with insightful information. link data together in ways that produce better information and
decisions across all levels of the organization.
3 Reward the new positive behaviors. On a daily basis,
recognize those that demonstrate the new behaviors with The general manager of a high-tech business unit in the
positive feedback. Make this part of your organization's Northeast used the BSC to deliver his unit's mission and
strategy. strategy. He developed the scorecard with the objective of
creating an aligned, integrated organization. The process
4 Keep it going. Changing your corporate culture is not an
overnight endeavor, it takes time. And while your business involved meeting with executive leaders, middle managers
strategies will change over time, employee behaviors need and employees to establish six measures and corresponding
to remain constant. targets and a reward system that would drive strategy.
Measuring performance Performance linked to and measured against strategy
Many organizations use traditional business metrics, reviewing Performance was maximized through a clear, consistent,
and analyzing them regularly. But often these metrics fail to focused set of metrics that linked individual performance to
provide the business with the information it needs to drive the business unit's strategic objectives. Within a year, the
success. Organizations need to ®nd a clear way to accurately organization met ®ve of the six targets.
measure how their people, processes and technologies are
The four perspectives of the BSC framework include:
measuring up in the effort to execute vision and strategy across
the company: 1 Financial ± how well your company meets shareholder
J Do your business metrics give you the information you need needs.
to measure performance? 2 Customer ± how your customers view you.
J Are you measuring the right things? 3 Business process metrics ± how well your core processes
J Are you communicating the right information to the right produce value.
people?
4 People and knowledge ± how well your company learns and

J How can you balance ®nancial measures with non-®nancial grows.
measures?
The overall framework of the BSC helps to:
Over the last decade, there has been a move toward a more J cascade the strategy down throughout the organization;
balanced measurement process. One process that has
received considerable attention is the balanced scorecard J set expectations and accountabilities at every level of the
(BSC), developed by Drs Robert Kaplan of Harvard University organization;
and David Norton of Balanced Scorecard Collaborative. J support the alignment throughout the organization;
The BSC centers on translating vision and strategy into a set of J achieve an accurate assessment of the progress you have
operational objectives that drive behavior and performance so
made translating strategy into action;
an organization can better implement its strategy. The premise
is that measurement motivates and that measurement must J provide information that leaders and employees can act on;
start with a clearly described strategy. The BSC is designed to and
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J deliver the timely feedback necessary to assess to complete in the next year including outlining how these
performance and adjust and re®ne the organization's projects support the corporate strategies.
strategy over time.
4 Conduct department presentations. Hold a company
Using the BSC framework is a good place to start when meeting to have each department present its plan for
measuring how your business is translating its strategy into what it intends to do in the upcoming year to support the
operational objectives, measures, targets and initiatives. It can company's strategies. This process accomplishes several
help you get a clear picture of how well your people, processes things:
and technology are equipped to execute your business
J it allows for departments to better understand each
strategy.
other's roles and promotes coordination among
Prepare your people departments;
The success of any change initiative, such as introducing new J it allows for executive leadership to identify any
strategic initiatives, depends on preparing your people for it. departments that are not aligned with the corporate
Studies show that up to 90 percent of associates do not strategy; and
understand their company's business strategy and how it J it provides a forum for generating and addressing new
relates to their day-to-day activities. So not only does the
ideas at the corporate level.
enterprise fail to meet its objectives, but its associates are
continually frustrated. Every year a high-tech organization presented its annual
plan and goals to employees. And every year, the
Executive management teams often create company visions
organization missed its goals. In the annual survey,
and strategies with a closed-door approach and then expect
employees responded that they did not know the
employees to execute the plan. This practice results in a lack of
company's strategy and they did not understand how
ownership and high level of distrust.
their jobs related to the strategy. Frustrated, the leadership
Executing a strategy requires that the organization's leaders get team engaged a consulting ®rm to help them understand
employees on board and engaged. How should your why. It was ultimately determined that employees felt no
leadership team engage your employees?: ownership to the organization's strategic goals.
1 Conduct a strategy review session. Review the vision, The planning process was reframed to generate more
strategy, goals and objectives with your employees. Make employee involvement and engage each department to
sure they understand the company's direction. de®ne its goals and objectives in the context of the
organization's goals. Then an overall action plan was
2 Conduct department input session(s). Have each
created and monitored monthly.
department conduct information gathering sessions,
some questions they may consider are: Although not every department met its objectives, the
organization as a whole achieved greater success in
J Who are our customers?
meeting its goals. And employees now owned the strategy.
J What are our customers' needs?
5 Develop the action plan. Create a plan that de®nes the roles
J How do we in¯uence the company's strategies? and responsibilities of each individual position, team,
department and division in executing and supporting the
J Who are our business partners (internal and external)?

company's strategies. The plan should also include a
J What are we doing that we should continue? timeline for implementation and metrics for measuring
success regularly.
J What are we doing that we shouldn't?
6 Review progress regularly. Hold regular company meetings
J What aren't we doing that we should?
to review progress from the company perspective as well as
J What do we need from other departments to the individual departments.
accomplish our goals and objectives?
Executing strategy takes commitment from people at all levels,
J What do other departments need from us to accomplish from executive management on down. Breaking down
their goals and objectives? corporate strategy across the organization so it is directly
relevant at each level ± corporate, department, team and
J What are the department's strengths and weaknesses?
individual ± helps everyone to focus on the organization's key
3 De®ne department goals and objectives. Have each activities. Companies that recognize and embrace this level of
department outline the top three-®ve projects they need collaboration strengthen their chances of success.
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De®ne and integrate key processes
A new sales director at a health bene®ts company had recently
joined the organization and quickly recognized his team's
`` Executive management teams
often create company visions and
dysfunction. Speci®cally, because several directors and strategies with a closed-door
managers had led the group over a period of time, approach and then expect
inconsistencies developed related to the work people did, employees to execute the plan.
the roles they held and the processes and tools they used. The This practice results in a lack of
end result was that customers received different levels of
ownership and high level of
services and products depending on their particular sales
representative. This situation existed not only in the sales group
but across the organization. Each department operated in a silo
distrust.
''
± no one understood how the work they did affected another
group within the company nor how it affected the customer. If you answered no to one or more of these questions, consider
reviewing your processes and implementing improvement
Many companies do not have de®ned, documented processes
that support their strategies. Instead, work evolves informally initiatives. According to literature, 70 percent of business
over time. If employees change, the way that work is executed process improvement initiatives fail. In order to ensure a higher
changes with it. This scenario creates a level of instability that level of success, try the following:
can cripple an organization over time, as the organization's 1 Support process changes at the executive level. Commit
success depends on the work style and approach of the your time and energy to champion the work. Provide the
employees carrying out the work. leadership, guidance and support your team needs.
Without repeatable, measurable processes, a task carried out 2 Create a strong process team. The process team should
today could be done differently by two people doing the same consist of cross-functional subject matter experts who are
job or, even worse, differently by the same person.
high performing, objective, creative and serve as change
Another cause of concern is the lack of process integration. For agents.
example, when sales processes fail to integrate with
3 Identify and concentrate on key processes. To identify
operations, customers are left with a less than satisfying
these core processes of the organization, it is better to view
experience. The lack of integration can cause, errors, rework,
processes from the enterprise level versus vertical business
delays, ®nger-pointing, low morale and, ultimately, the loss of
areas such as operations, ®nance, marketing, etc. These
customers.
processes usually number less than a dozen and in many
Without effective processes, an organization cannot deliver on cases should be identi®ed from the customer's point of
its strategic objectives. How effective are your processes? view. Examples of these processes may include: product
Several questions you may consider as you evaluate your development or order ful®llment.
processes include:
4 De®ne the future desired state of the business. To align
J Do your business processes support your strategy? processes with strategic objectives, a clear picture of the
J Are your processes internally focused or have they been company's vision must be communicated and understood
developed from your customer's perspective? by all.
J Are your processes geared to leverage growth Technology's key role

opportunities or are they primarily oriented to cost
Technology is not the solution but rather a key enabler to
reductions?
aligning your people and processes with your strategies.
J Are your processes built across functional lines? Immediate access to high-quality information is critical to an
J Are your processes and work¯ows documented and organization's success.
controlled with a formal change control methodology? Technology allows you to put the right business information in
J Do your employees understand your processes and the the hands of everyone in the organization, providing everyone
expectations and accountabilities of their speci®c roles? with the ability to make fact-based decisions in a quick manner.
It provides the means for information ¯ow to extend past your
J Does your technology support your processes?
four walls and allow you to better understand the needs of your
J Do your processes meet your customers' needs? customers, suppliers and partners.
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Technology such as data warehouses and analytical reporting J Have you failed to integrate the new IT systems with
applications, allow organizations to access business business operations?
transactions systems (ERP, CRM, supply chain, performance J Has resistance to change been so great that it has
management applications) and ef®ciently facilitate the prevented the initiative from progressing?
deployment of performance metrics throughout the
If you have not realized the business value of your investments,
organization.
now is the time to do so.
Like many companies, your organization may have invested
Your business needs to work in concert with IT to realize the
substantial amounts of money in technology. Ask yourself
value of your technology. Using a disciplined project
these questions to see if it is been worth it: management methodology, develop and implement a
J Have you realized the business value of your investments? solution that meets the needs of the customers and the
business. Once the newly implemented systems are in place,
J Have your technology investments been fully implemented you are ready to maximize the value of the technology.
and integrated into the day-to-day operations of the
The most successful companies are those that have aligned
company?
their people, processes and technology with their strategies.
J Have you underestimated the degree of dif®culty of getting This alignment allows them to create, maintain and sustain a
the technology implemented? competitive advantage. J
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Realizing the business bene®ts of
enterprise IT
Amir M. Sharif
Amir M. Sharif is a Research Fellow in the A question that often arises within many modern organizations these days, is the
School of Information Systems, Computing thorny issue of adoption of new technology ± and speci®cally, adoption of information
and Mathematics at Brunel University, UK.
technology and/or information systems (IT/IS). How do you get people to learn and
He can be reached at amir.sharif@ubs.com
use an IS? CIOs and IT managers are routinely presented with the tricky scenario of
essentially selling computer software or hardware solutions to the ``business'' (i.e. the
core operating component of an enterprise), in order for projects to get off the ground
and succeed. If it were not already enough to convince management to invest in such
endeavors, the IT/IS organization is then faced with overcoming the issue of getting
business professionals who are averse to technology, to own and adopt a technology
solution.
The bene®ts of an IT/IS implementation can either be viewed in terms of tangible or

intangible components. In terms of the former, a technology solution may increase
the productivity of a knowledge worker by reducing the amount of time taken to do a
task ± thus allowing for a de®nitive and quantitative measure of ef®ciency gain. On the
other hand, an IS may also provide and facilitate the ¯ow of tasks within a business
process (such as in a sales order matching process, for example). The bene®t derived
from such a work¯ow process, may not be directly measurable but may be perceived
to be a bene®t in terms on an intangible increase in ease of use.
Balancing the requirements of the organization as a whole with the needs and
expectations of its employees is vital and crucial to ensuring the success of any IT/IS
application. However, when dealing with users of such IT/IS solutions, it readily
becomes apparent that the measurement and tracking of bene®ts in either of these
forms is dif®cult. This is because it requires some level of subjective reasoning about
how the IT/IS has achieved its prescribed goals or not.
Getting users to adopt enterprise IT/IS
People-focused issues
systems is notoriously dif®cult to
achieve and can de®ne the success of In presenting the case for the business bene®t of an IT/IS solution, there are some
failure of a project. By understanding essential people-focused issues to bear in mind, which drive adoption of technology.
characteristic user traits and user types The author believes that for any business or IT/IS-led change, people tend to expect:
of such business systems, this article
J Less change, more innovation: improvement as opposed to replacement.
presents a six-stage approach to
overcoming this issue. J Processes and tools to assist productivity: use the right tools for the job.
| |
J More tightly integrated, yet less cumbersome applications:
`` Balancing
have access to a suite of context-speci®c applications, as the requirements of the
opposed to bolt-on, disparate solutions.
organization as a whole with the
J Feature rich applications: provide users with the ability to needs and expectations of its
innovate and be creative if and when they need to be. employees is vital and crucial to
J Performant, stable and reliable IT/IS: systems should ensuring the success of any IT/IS
J
always be available and reliable.
Less division between the IS organization and the business:

application.
''
is there a ``single voice'' which declares and de®nes the
IT/IS strategy for the company? nominated individual who is a ``reference'' user of an IT/IS
system (i.e. someone who is taken to be a model end user).
J Greater adherence to the needs of end users rather than to
Typical responses from such users are of the form:
convoluted processes/systems: listen to and address user
community needs. J ``This system is ok, but I much prefer the tool I currently
use''.
J Transparency of IT delivery: governance, responsibility and
sponsorship for IT/IS initiatives should be visible. J ``Performance is not so great ± so I don't think I will use
it''.
These factors are further compounded when target users of an
IS either refuse to use or take an inordinate amount of time to J `Ìf I am going to be the only person using it, then what
interact, adopt and/or own a system. Traditional strategic IS bene®t has it got to the rest of the company?''
planning highlights the fact that IT/IS implementations should J `Ìts going to take too long to learn, and I can make do
always be presented in the light of potential realizable bene®ts with what I currently have thank you''.
that can be gained. This is at the expense of organizational,
team and individual change. Nevertheless, it is usually the case 2 The quali®ed Luddite: this type of end-user can be classi®ed
that many users of IT/IS applications, tend not to adopt such as being a senior manager or equivalent, whose contact
technological solutions readily: either as a result of their and use of technology as a whole is extremely limited. In this
expectations not being met; as a result of fear of failure (not instance, the individual has almost made it a point not to
being able or indeed competent enough to use the facilitating use IT/IS within their day to day job, as the effort required in
technology); or as a result of fear of technology (being order to understand and use it would place a far too great
comfortable with existing manual or labor-intensive tasks and demand on their time. A typical example of this type of user,
processes which require little or no machine intervention). would be a manager or senior business sponsor who extols
the virtues of using IT/IS within the organization, but may
Dealing with laggards and Luddite end users not necessarily have a PC on their desk. Furthermore, such
These are, of course, extreme conditions ± but how can the an individual may also be characterized by their preference
CIO or IT manager overcome the barrier of being faced with for drafting e-mails in longhand and giving them to their
laggard and /or Luddite end users? In order to understand this, secretary to be sent out on their behalf. Typical responses
it is perhaps useful to outline the two main forms of user that fall from such users are of the form:
into this category and identify those characteristics that de®ne J `ÌT is vital to this company and we fully recognize the
their relationship with information technologies: bene®ts that such systems can bring to the
organization''.
1 The neophyte Luddite: this type of end-user can also be
classi®ed as being a ``power'' user in the sense that they are J `Ì'm far too busy to get involved with technology ± my
highly pro®cient and adept at their day job. They tend to focus is the business''.
realize and recognize the need for productivity and
J ``Speak to IT about this ± its not really under my remit''.
ef®ciency improvements in what they do (but are usually
too loathed to do anything about it). When presented with In general, both forms of user who are not keen to adopt a
any sort of of®ce automation system (from a simple given IT/IS system, may choose to defer responsibility for their
spreadsheet through to a full-blown enterprise web own actions to ®gures of seniority (or even subordinates), in
application), they will seek to ®nd holes in its existence. In order to avoid having to justify their own decisions and reasons.
general, such a user will be comfortable with technology but Furthermore, as can be seen from the range of responses
will be averse to too much change in their working shown, there can be a dichotomy of views, or even confusion,
practices. A typical example of such a user would be a over how a user perceives their own relationship with
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technology. As such the key drivers for such users can be said information and data, which is available to all individuals
to be their reliance on the following reasons: within an organization. In such a way, individuals within
companies now have the ability to harness and add to such
J Their job and their importance: their role does not
organizational ``wealth'' through mechanisms such as
immediately require them to be a user of the system
intranet portals, knowledge management systems and
(even though they may support and sponsor the initiative at
other information repositories.
large).
These preceding factors, are key to understanding and
J Lack of time: they may not have enough time to learn and
persuading those end-users who are unconvinced of the
appreciate the bene®ts of the system because of their day
bene®ts that IT/IS can bring to organization. In order to
job.
overcome and address the issue of IT/IS system adoption, a
J Productivity gain: a user may insist that because of the lack six-stage approach to bene®ts realization, known as the
of time that they have available, any productivity gain arising acronym, ASSIST is presented:
from using an IT/IS system will be at the expense of
1 Accessibility: provide easy and simple access to the IS
neglecting their daily work.
with a shallow learning curve.
J Lack of integration: power users may be tech-savvy enough
2 Stability: the work environment must be amenable to the
to want ``the world on a plate'' ± i.e. they may require the
evolution of work practices ± and people, processes
capability, for instance, to carry out their work in any place,
and systems should consistently address these needs
at any time, hence requesting IT/IS integration with personal
in terms of support procedures and personnel (i.e.
digital assistants (PDAs); cellular phones etc.; or access to a
available help and training).
multitude of internal and / or external data sources (e.g. MIS
reports, planning and scheduling information, client 3 Simplicity: the aim and goals of any such IT/IS initiative
information). should be easily understood, non-lengthy, and non-
verbose. Communication and documentation should be
Hence, in order to address such potential end-user behavior, it
to the point and re¯ect the organizational imperative and
is useful to outline and present the following fundamental
goals that drive the implementation.
aspects of enterprise IT/IS solutions:
4 Innovation: any IT/IS should provide, as far as possible,
J Ubiquity: IT/IS is now such a vital part of working life in all
the ability to allow the end user to approach and
major organizations in the world, that it cannot be ignored. It
address their work tasks in a novel or productive
also pervades almost all aspects of an organization:
manner: either via process automation or information
®nance, marketing, human resources, management
access.
reporting, manufacturing/production and down to other
subordinate business functions and areas. This is realized 5 Sophistication: any IT/Is which is presented to the types
through systems such enterprise resource planning (ERP), of user de®ned, should at least be an improvement on
customer relationship management (CRM) and supply existing or historical processes and systems
chain management (SCM). (improvements in terms of ef®ciency and productivity).
J Communication: where would many modern businesses be 6 Transparency: there should be a business and / or an IT
without the ability to have e-mail and internet access? sponsor who is accountable, accessible and
Within the space of ten years since the advent of the world responsible for managing not only the IT/IS project
wide web, such technologies have become the vital scope and focus, but also be available to address user
lifeblood of an organization. More recently, the power of needs and on-going expectations.
IT/IS has now lead many organizations into looking into
Noting that the preceding ASSIST steps all ultimately focus on
using internet technologies to carry voice data (so-called
ensuring that people, process and technology issues are fully
Voice over IP, or VOIP). While it is true that few would
encapsulated within any IT/IS implementation, it is therefore
dispute this statement, the fact that such fundamental tools
also important to recognize and connect with speci®c end user
exist, are due to the enormous communication bene®ts
expectations, and manage them accordingly:
they offer ± and the manner by which they have been
realized. J Manage expectations: Be pragmatic about user's roles,
responsibilities and requirements.
J Knowledge: the concept of an organization having the
capability and capacity to learn has long been seen as an J Provide re¯ective feedback and support to individuals
integral component of a modern, agile business. Likewise, impacted by technology: listen ®rst and respond ± be
IT/IS has been well placed to facilitate the management of there to overcome fears.
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J Introduce business process improvement (BPI) concepts
`` The
as early as possible: before any IT/IS concept is discussed,
IT/IS organization is faced
the chance to improve business processes through an
with overcoming the issue of
analysis of existing tasks and procedures, should be
highlighted. As such, IT/IS can facilitate such changes via
getting business professionals
the realization of streamlined and optimized business who are averse to technology, to
process ¯ows. own and adopt a technology
J Identify ``quick wins'': if there is a problem which has an
easy solution, it should be ®xed sooner rather than later,
solution.
''
thereby building trust and showing competency among the
user population.
J Empower users to be more in control of their IT/IS business and IS organizations to the user, where any such
environment: provide accessible conduits for training and initiatives are seen to have a ``single voice'' and point of
build in application functionality for navigability (the ability to responsiveness.
get around the system); and personalization (the ability to
J System availability and business continuity planning: be
customize the view of information based on a speci®c
user's information requirements). focused on ensuring IT/IS applications are stable and
robust, and there are policies and guidelines to deal with
J Identify points of low and high level integration: outline and
business or IT crises: performance of an IS signi®cantly
discuss where and how information can and / or might be
improves trust for it, and therefore, directly encourages
shared between other dependent and independent
enterprise IT systems for the productive bene®t of the adoption.
user (e.g. e-mail, HR systems, CRM systems, MIS reporting Through addressing the needs and understanding motivations
systems). of enterprise IT end-users in such a way, the ASSIST approach
J Remove distinction between business and IT projects: presented provides a powerful method for realizing the
ensure clear lines of communication exist between both business bene®ts of IT. J
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Technology and processing

Adopting new technologies 307

Web accessibility: guidelines for busy administrators 313

Improving the performance of technology partnerships: a case study in

Embedded ethics: how to build better IT mousetraps 325

Supply chain effectiveness: strategy and integration 331

| HANDBOOK OF BUSINESS STRATEGY

Getting your infrastructure components to work together 341

Realizing the business bene®ts of enterprise IT 347

In order to prevent obsolescence, many small and medium-sized enterprises (SME)

Information technology as an innovation

want to learn how to deal with new technologies. Second,

continue its normal modes of operation and its relationships

Is somebody claiming for continuity? Controlling access: identi®cation and authentication

some assets plat important roles in generating revenue or

communications regarding their programs, goods, or services must be prepared to offer

off; standards, and include accessibility standards among

Establishing a performance system brings many advantages. By measuring,

in¯uence behavior of companies by motivating, stimulating learning, and sending

In addition, non-aligned performance measures might cause problems for SCC.

Collaborative effort in Turkish industry

Table I Evaluation of 3T regarding innovation, sales, and productivity performance measures

their products after having initiated collaboration with 3T. This

frequently may be included in the future projects by extending

Subsumption ethics Technology is built over time, and so components ±

general databases of the registry data purchasers.

Conclusion In a 1997 Boston Globe article, Ethicist Rushworth Kidder

Management and integration Delayed differentiation

Benko, C. and McFarlan, W. (2003), ``Metamorphosis in the auto

Research design and method

Cultural drivers Cultural barriers

Measuring performance Performance linked to and measured against strategy

4 People and knowledge ± how well your company learns and

J Who are our business partners (internal and external)?

developed from your customer's perspective? by all.

J Are your processes geared to leverage growth Technology's key role

The bene®ts of an IT/IS implementation can either be viewed in terms of tangible or

Less division between the IS organization and the business:

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