Switch to "cloud computing" in order to easily increase into international market and become updated with the latest technology.
Follow all the regulatory compliances in its e-business effort and apply business ethics to be adopted in various countries.
Ensure that the cross-border orders follow security protocols and are safe and secure.
Being delicate to cultural variations in broadening countries and making the change management process steady.
These suggestions will thus help Elemica to efficiently extend its B2B e-business strategy and establish a dominant position on the globe market.
Table of Contents
EXECUTIVE Brief summary 2
Table of Details 3
1. Release 4
2. ENVIRONMENTAL Examination 5
2. 1 COMPANY Examination 5
2. 3 CORE COMPETENCIES 8
2. 4 MAJOR COMPETITOR 8
2. 5 CURRENT BUSINESS MODEL 8
2. 6 MARKET Research AND Tendencies 9
2. 8 INFORMATION AND COMMUNICATION TECHNOLOGY Troubles 11
3. BUSINESS CASE FOR ELEMICA 13
4. PROPOSED PROJECT PLAN 19
4. 1 Job PLANNING AND CHANGE MANAGEMENT 19
5. ASSESSING ONLINE B2B INDUSTRY TRADING HUB 21
5. 2STRATEGY MAP 24
6. Suggestions 26
6. 4 BUSINESS PROCESS REDESIGN AND SYSTEMS INTEGRATION 28
6. 7 SUPPORT SERVICES 29
LIST OF Personal references 31
ANNOTATED BIBLIOGRAPHY 33
This report is aimed at understanding the business enterprise of Elemica and therefore, develops a strategic arrange for the global expansion of e-business at Elemica. As the principle Information Official (CIO) of Elemica, an in-depth examination of the business is shown in the report. It offers environmental evaluation of Elemica's online B2B trading industry hub and also recognizes the prospect of global enlargement of e-business.
The report will assist the business to extend its core activities in the international market. It also highlights the risks associated with broadening the e-business globally. It identifies the target groups, the characterization of focus on groups, and developing value into Elemica's services as desired by its customers, which are crucial for the success of e-commerce (Fellenstein & Real wood 2000). Many inhibiting factors related to culture, security, language, legal rules, cross-border data circulation, ethical regulations etc. which are present in global systems (Laudon & Laudon 2006), have also been discussed. In addition, it evaluates the entire plan by giving a Balanced Score Card to evaluate its efficiency and a strategy map that will ensure the integration of strategy with implementation.
The basic purpose of this job is to determine whether Elemica is going ahead with the global enlargement of its online B2B trading hub or not.
2. ENVIRONMENTAL ANALYSIS
Elemica is a global e-commerce company founded by 22 leading firms in the chemical substance industry which gives web-based order management and offer string applications and services. It offers a single hub which gives companies with a one-stop solution through which companies can buy and sell chemicals to one another through their ERP systems or web choice. It allows companies to link their inner IT systems by way of a neutral system. Elemica is the first e-commerce company in the substance industry which has effectively commercialized its ERP-to-ERP connection. It offers a modular, hosted solution that simplifies sales, procurement and financial techniques; integrate supply string partners in order to diminish communication obstacles; and reduce over head and errors.
2. 1 COMPANY ANALYSIS
Elemica is a privately kept company with 150 employees. It offers 2500 partners in its source string network and $60 billion in twelve-monthly transactions. It is headquartered at Pennsylvania with office buildings in Frankfurt, Amsterdam, Seoul, London, Singapore, Shanghai and Tokyo.
VISION: To be the leading company of supply string integration and optimization services to the companies we serve; tire and rubber, chemical substance, energy and determined manufacturing business. Clients count on Elemica solutions and services to provide IMPORTANT THING Results, Enhanced Source Chain Reliability, Quick and Easy Execution, and Deep Industry Expertise.
(Source: www. elemica. com)
SWOT Examination: It is necessary to carry out a SWOT examination of Elemica in order to develop a competitive gain by figuring out its strengths, weaknesses, opportunities and dangers (Good friend, 2009). It'll enable Elemica to build on its talents, overcome its weaknesses, identify the opportunities available and reduce its exposure to threats.
One of the very most sophisticated technology websites in B2B space
A sole hub for any transactions
One stop means to fix its clients
Addresses e-commerce needs of companies of most sizes
Helps companies automate their businesses
Creates efficiencies and economies of scale
Reduces clients' overhead and errors
Does not buy, sell or own a product
Highly fragmented substance industry with large numbers of companies
Internet is required for the service
Expansion into international markets
Diversifying its industry such as the rubber and tire industry, etc. where B2B e-business is possible
Including reviews and opinions from long term customers so that new companies get attracted
Facility of online auctions
Providing for private collaborative hubs
Non-acceptance of business design in international markets
Outdated technology in some time
Emergence of new competition with better technology
2. 2 VALUE PROPOSITION OF ELEMICA
A solitary hub for all your companies to do almost all their transactions.
Only one interconnection necessary for all trades unlike various other companies offering similar services.
A "super program" which links the ERP systems of all participating companies that allows the firms to electronically communicate with each other also to conduct the orders.
Acts as an intermediary which only links back to you all the firms together and they can conduct private ventures electronically.
Enables a firm that subscribes for its services to perform business with all the current other clients as well as suppliers which can be associated through Elemica.
It offers four modules: procurement, logistics, and customer replenishment (automate inventory replenishment and buying), and order management.
Provides support of Elemica's Professional Services and Execution Team to its new clients. This ensures that the on-boarding process is successful and increases approval of the business enterprise value using its major trading associates.
Addresses e-commerce needs of chemical companies that are of all sizes.
Results in better operational efficiency, reduced costs and a higher ratio of safe and reliable deliveries
2. 3 CORE COMPETENCIES
Providing four modules: procurement, logistics, and customer replenishment (automate inventory replenishment and ordering), and order management.
Single hub for any transactions.
2. 4 MAJOR COMPETITOR
The major rival of Elemica in this space is ChemConnect, which was founded in 1995. It includes services much like Elemica, but it generally does not connect the ERP systems of the individuals. They have 9000 customers and is also spread out in around 150 countries. (Numbers as in 2009 2009).
2. 5 CURRENT BUSINESS MODEL
Elemica offers a one-stop solution to all or any its customers to carry out transactions. It integrates the move of information among the list of trading partners by utilizing a Business Process Network (BPN). Once a customer is connected to Elemica, it gets access to thousands of customers and suppliers. The clients are recharged for the service on the basis of volume of utilization.
When a client is looking for some material, it places up a note on its ERP system.
This message would go to Elemica's platform asking its users for the availability of the material.
Several of Elemica's people react to the subject matter by responding with quotations.
At this point, both the purchaser as well as owner is anonymous.
The client makes a decision from whom to purchase predicated on the quoted prices.
When the shipping is set up, the personal information of the celebrations is unveiled.
When the order is validated, the platform is utilized to paln and co-ordinate delivery, automate invoice and pay one another.
Elemica's profits are generated by charging transaction fees from its clients on the per-transaction basis.
Elemica's business design is sustainable because it combines all the source chain associates, thus lowering the communication and transfer time. The clients have the ability to connect to a big number of purchasers and suppliers on a single platform, with no to buy any organs and circulatory system for themselves. Also, being that they are charged on the exchange basis, the revenues are continuous and lasting and are more efficient than older EDI based solutions which charged based on inter-company ventures. Also, it addresses the needs of chemical substance companies of most sizes. It thus leads to increased functional efficiency, reducing of costs, less inventory, and safe and rapid deliveries. These results customer satisfaction and therefore result in bringing in more clients.
2. 6 MARKET Examination AND TRENDS
With the introduction of internet, there has been a major move in the way companies do business. There has been a high presence of B2C e-commerce, whereas it's the B2B e-commerce which gives a huge amount of current market spending ( Pierfrancesco Manenti, 2010). The full total spending by B2B e-commerce is more than 85% of the total spending of B2X e-commerce all over the world (relating to IDC estimate).
Research shows that B2B e-commerce is more utilized by the businesses in U. S. However, it keeps growing at an easy pace in European countries as well because the makes have become more acceptable to this concept.
It has been discovered that only 4% of the full total turnover in developing sector is made through B2B e-commerce sales (data from Eurostat). Hence, there's a great opportunity for e-commerce to grow in new countries as well as expand their business website, which gives Elemica with a great home based business.
2. 7 EVALUATION OF ELEMICA'S ONLINE B2B INDUSTRY TRADING HUB
The best way to evaluate Elemica's online B2B industry is by using Porter's five causes model. Based on the model, there are 5 forces which have an effect on the industry and the monetary value that gets divided among the list of industry players (Turban, 2007).
Threat of new entrants: Due to continuous improvements in technology, there's always a threat of a fresh company creating a most advanced technology and dominating the market scenario. This may make Elemica outdated. Hence, there's a risky of new entrants getting into the market which makes it inevitable for Elemica to continually improvce it systems and become updated with the latest techniques.
Bargaining Power of Suppliers: The bargaining vitality of suppliers is bound for Elemica because Elemica just offers a platform to allow them to make deals. Also, the suppliers in the chemical substance industry are also customers themselves, and hence are reliant on each other. Also, Elemica provides them with a neutral platform where they can simply transact with intermediate costs and time wastage removed.
Threat of alternative products or services: Threat of substitute products/services coming into the market is high because e-commerce is an extremely powerful business. Any new technology or notion can certainly replace it. Also, physical ventures can also easily become a substitute to online services.
Bargaining Vitality of Purchasers: The bargaining vitality of clients is again limited as a result of interdependence of customers and suppliers on one another. But given that they have a huge number of options available, they can certainly choose from included in this and have the best deals.
Rivalry among Existing Challengers: You can find a large range for e-commerce online industry to develop all together. Also, with limited competitors in this space, there is certainly less of any rivalry and majorly the business providing easy and better services will dominate the marketplace.
2. 8 INFORMATION AND COMMUNICATION TECHNOLOGY CHALLENGES
As the clients will become more and more global, a major chaleenge for Elemica is to control the partnership between potential buyers and suppliers who may belong to different countries and ethnicities. Hence, Elemica must develop a Customer Romantic relationship Management (CRM) system to be able to ensure that the customer relationships are long-term, lasting and add value.
It will also need to be considered as to how Elemica will assimilate the legacy systems that the firms currently use. Instead of linking the ERP systems of the companies to the hub, Elemica can switch to "cloud computing" that will eliminate the need for integration.
In order to maintain with the most advanced technology, Elemica can transition to "cloud computing" that may provide all the network facilities on the network with no need for hooking up the ERP systems of the clients. The companies will have the ability to access their profile at any computer with access to the internet. This will reduce the costs incurred as well as attract more volume of customers globally.
While handling cross-border ventures, Elemica must be extra careful about the security issues and the data transfer protocols and expectations to be adopted. It requires to maintain compliance with the international copyright laws and security criteria.
3. BUSINESS Circumstance FOR ELEMICA
3. 1 OPPORTUNITIES AND OBJECTIVES
Expand its business to other countries and so provide online resource string integration by behaving as a natural platform for all your transactions. The task is to expand the system into other countries and also manage the logistics for distribution.
Adopting latest technologies so the existing technology will not become obsolete. This may add more customers to the e-business and also make the business enterprise model more ecological.
For global growth, Elemica can transfer to "cloud computing". This helps you to save the firms from connecting their ERP systems to central software. The applications had a need to run the business could be stored on servers. This will save the business costs and companies across the globe can easily conduct business simply by logging in to the internet. It will help them connect to anybody and all over the world. Also, the clients can simply collaborate and work on big projects in real time.
Another opportunity in the area of extension for Elemica is the fact that it can allow customers to compare products from different distributors and modify their product requirements from a number of vendors.
Elemica must also start interaction on the list of suppliers wherein they can post their feedback and reviews about its services. This will help attract new customers and also improve the credibility of the company.
3. 2 CRITICAL SUCCESS FACTORS
Need to become more customer oriented in order to be sensitive to social differences and be responsive to their differing needs.
The web interface must also have the local words of the countries where Elemica packages to expand.
Compliancy with international criteria must be looked after before entering into enlargement into international market segments.
The duty implications must be considered for the success of a business far away. It requires to be guaranteed that the business is in compliance with the local tax rules.
Need to be up-to-date with the latest technology so that the business model does not become obsolete and to prevent competition.
3. 3 COSTS AND BENEFITS (ROI)
It is essential to determine the return on investment before taking any business decision to ensure that the profits will be favorable for the business enterprise. It is an instrument which assists with evaluating it and electronic business assets (Turban, 2008). The ROI formula divides the total online benefits (earnings less costs, for each
Year) by the initial cost, resulting in a ratio that actions the ROI for each and every year or a whole period (Turban 2010).
Marketing costs: A marketing strategy needs to be developed in order to attract customers all across the world. Also, advertising costs will be incurred to determine the brand image of Elemica in new countries. This will be a significant cost because the marketing promotions need to be customized regarding to different locations and local markets.
Operating costs: Functioning costs will fluctuate for every country. This includes working out assistance program costs and other support costs to its customers. These costs will change because the money beliefs in each country will vary and the exchange rates also have to be taken into consideration. Also, functioning costs increase because now the hub needs to be custom-made for local marketplaces and more variety of customers means higher maintenance costs.
Employee costs: More variety of employees will be needed to deal with the expanding business. Residents should be recruited to be able to understand the local needs and become attentive to them appropriately.
Administrative costs: Administrative costs will rise with an increasing range of customers.
Opportunity costs: It is the cost associated with not taking an electric commerce effort (Schneider, 2007). If Elemica does not just do it with the enlargement, some costs will be incurred for not going with this plan, called as opportunity costs.
Transaction fees: The customers are priced on a per deal basis. With increased quantity of customers, the number of transactions increase and hence the earnings.
Training fees: The training fees billed for increasing popularity and making the on-boarding smooth will also increase with increasing quantity of members.
3. 4 BENEFITS OF EXPANDING GLOBALLY
It will offset sales drop in the local market, if any. Even if there is not much drop in income in the home market, having a worldwide network will act as a safeguard for future.
It will raise the life cycle of the services because it may be possible that technology gets outdated in the domestic market, but in new markets this may be new.
If Elemica switches into cloud computing, it will attract a large set of new clients, both in the home as well as international market, thus resulting in increased income and higher market talk about.
It will improve its competitive position and help in building itself as a global brand.
3. 5 RISKS ASSOCIATED
Security issues: With data and deals scanning throughout the world, there might be security concerns and different protocols to be implemented in various countries. Also, there might be concerns about the misuse of information that is moved online.
Payment issues: With difference in currencies and exchange rates, it might become difficult to make repayments among the list of collaborating parties, which can result in lack of cross border deals.
Threat of Frauds: Proper system would have to be in location to prevent any deceptive customers to join the network and take undue advantages.
Server accidents: There might be server crashes scheduled to development into remote control areas which might cause the whole system to fail and thus result in huge loss.
Improper integration: Threat of incorrect integration of the hub with ERP systems in distant locations.
Violation of laws: There might be systems which might violate the house country regulations, thus creating troubles for Elemica in future.
Cultural distinctions: The neighborhood people in concentrate on countries is probably not comfortable with the idea of online investing of stock. This might lead to a failure of the entire business model in that country. Hence, an effective understanding of the local culture needs to be developed before getting into expansion.
Changing technology: Elemica needs to be up to time frame with the latest technology so that their services do not become outdated.
Lack of computer infrastructure: It could be possible that some countries might not have appropriate internet infrastructure. This will likely hamper the enlargement of e-business in that country.
4. PROPOSED PROJECT PLAN
4. 1 Job PLANNING AND CHANGE MANAGEMENT
Elemica needs to develop a precise project intend to carry out all the prepared projects, evaluate the various options available, identify specific milestones, allocate requisite resources, and control the projects (Turban et al. 2010).
Planning and job design
Monitoring and managing systems
Elemica will first need to identify a project champion who will ensure that proper time, resources, and attention is given to the project throughout its initiation to execution (Turban, 2008). Then a project team needs to be established who'll develop a in depth project implementation plan. For enlargement strategy, Elemica can pilot test it in some other country, which can only help identify the problems and successes, thus assisting in changing the strategy consequently (Turban, 2008). Consequently, personnel requirements are identified and fulfilled; and training directed at them for the most advanced technology. After the completion of the proposed plan, it should be analyzed at each level to be able to overcome the inefficiencies and loopholes that have been recognized and then continuous monitoring of the project needs to be achieved.
Change management is a significant issue which must be handled by Elemica during its global development because people will resist change. An appropriate communication strategy must be developed that may target at keeping all the employees as well as Elemica's clients up-to-date with the business's strategy and latest happenings. This can help them cope with the changes (Schneider, 2007) and also help them adopt the new changing culture easily. Self-confidence and buy-in must be inculcated within the employees so that their support can be garnered for the task, which is needed for the success of the business.
4. 2 RESOURCE ALLOCATION
The various resources which need to be allocated during Elemica's development will be human resources and IT resources.
Human resources includes business managers, task managers, web site designers, graohic designers, system operators and administrators (Schneider, 2007).
IT resources which will be needed are the hardware and software development and its own maintenance.
5. ASSESSING ONLINE B2B INDUSTRY TRADING HUB
5. 1BALANCED Rating CARD
The most popular system for performance management is the utilization of a well-balanced scorecard (Turban, 2007). It had been designed by Kaplan and Norton in 1996 and it describes a holistic dimension system which flows from the overall strategy of the business and crystallizes into measureable signals (Kaplan & Norton, 1996).
Internal Business Processes
Learning and Growth
Increased market share
1) Upsurge in the amount of clients
2) Upsurge in the revenues
3) Upsurge in the amount of locations where Elemica provides services
Increase in market show can be an important metric in determining whether the global enlargement of the business enterprise has been successful or not. Only if there can be an increase in the marketplace share, it'll indicate that the business enterprise is successful which is attaining more customers.
1) Increase in the number of transactions between clients, hence resulting in increased profits.
2) Upsurge in the amount of customers.
It is important to measure the revenues earned in order to ensure that even if market share may have increased, the income have also increased along with it. Also, it is important to know that the comes back are increasing on the amount of money invested.
Increased customer satisfaction
1) Upsurge in the number of repeat transactions
2) Reduction in the amount of customer complaints
3) Increase in the amount of positive customer reviews
4) Decrease in the response time for resolving customer complaints.
Customer satisfaction is a top concern for the success of any business. Customer satisfaction ratings will reveal if the existing customers are satisfied with the services which in turn will determine the clients getting put into the network.
Increased awareness of Elemica
1) Upsurge in the amount of transactions on Elemica.
2) Increase in the amount of new subscribers.
3) Increased presence among other chemical substance companies.
This will determine whether the new marketing promotions and enlargement strategy has worked or not. Whether it will be able to make more income or not.
3)Interior business processes
Increase in efficiency
1) Upsurge in the quality of service
2) Decrease in the lag time between a complaint and resolving that issue.
3) Increase in the number of transactions that may be handled at a specific time.
4) Increase in the rate of transactions
This can help in providing best service to the clients and will help in continuously improving after the prevailing services.
Better technology and deal security
1) Upsurge in the purchase security even while cross-border transactions happen.
2) Implementing the most advanced technology and making the hub more user-friendly and easy to put into action.
This will need of the security concerns which might arise through the expansion process in different countries. Also, the most advanced technology will keep Elemica inline with the opponents and assist in dominating the marketplace share.
4) Learning & Growth
Better skilled personnel competent to handle latest techniques and varying cultures
1) Upsurge in % of employees who are highly skilled.
2) Develop the competencies in the personnel to work in a active and competitive environment.
A very skilled and competent personnel will ensure that the company progresses and delivers the best to its customers all over the globe.
This will also help in identifying the spaces in the skills of employees and work after them.
Increased organizational learning
1) Increase spending on R&D to increase the technology used, hence delivering better services.
This means that the latest and the best technology can be used and the business is preparing to react to the changing environment all across the world.
5. 2STRATEGY MAP
The strategy map below shows the linkages between the four perspectives of Balanced Rating Card and exactly how they lead to achieving the overall business strategy.
INCREASED SHAREHOLDER VALUE
MORE MARKET SHARE
LEARNING & Expansion PERSPECTIVE
INCREASE IN R&D
HIGHLY SKILLED AND Skilled WORKFORCE
INTERNAL PROCESS PERSPECTIVE
The following suggestions are in order of their concern. Each one will be needing 5-6 weeks to use and can be started concurrently.
6. 1 OUTSOURCING OF ICT INFRASTRUCTURE
In order to strengthen the ICT infrastructure of Elemica, it should adopt cloud computing. It'll hence bring about business process automation. All of the facilities will then be available on the network without the need for hooking up the ERP systems of the customers. This will help in reducing the costs of establishing hardware or software and its maintenance. Clouds are a pool of easily useful as well as accessible virtualized resources such as hardware, development, platforms and/or services' (Vaquero et al. 2009, p. 51).
Cloud computing will allow Elemica's consumers to use applications and its network without assembly or using an ERP system. They will be able to access their account at any computer with access to the internet. This technology, thus results in more efficient usage through centralized storage, data control and maximum usage of bandwidth. The clients will be able to easily collaborate with each other. This may also improve the process of increasing the e-business internationally as location or resources will never be a major matter after implementing cloud processing technology. Adding cloud computing services to the existing hub provides a new income stream at low incremental cost.
Outsourcing of network maintenance and support can be outsourced by Elemica. Matching to a research by McKinsey Global Institute in 2003 (Rajan & Srivastava, 2007), outsourcing has resulted in much cost savings for American companies. Similarly Elemica can adopt this technique and outsource to third world countries, which will lead to cost benefits and higher efficiencies.
6. 2 IT STAFFING REQUIREMENTS
Staffing requirements should be modified as global enlargement of Elemica takes place. Employees with developed skill packages and high level competencies have to be hired. Also, among the available employees, new competencies need to be developed which can only help them in handling international functions and react to the active business environment.
For support and maintenance services, outsourcing is preferred. But also for local offices, local people with the required skill collections must be employed in order that they are culturally very sensitive to the neighborhood needs and have the ability to improve the global business strategy matching to local needs. This is known as "glocalization".
6. 3 HARDWARE & SOFTWARE REQUIREMENTS
If Elemica goes into for cloud computing, then it'll lead to reduced costs to maintain hardware. It'll provide Elemica with infinite computing resources which is on demand. The customers can start small and then develop their hardware relating to needs. This will likely enable companies of most sizes to become listed on Elemica's network. By using cloud computing, Elemica will be able to enjoy greatly simplified software set up and maintenance, and centralized control over the whole network. It will enable companies to increase Elemica's network for a short term through cloud computing (Armbrust et al. 2009). This can help Elemica to establish its business in new countries as well where companies can try their services at first and hence be more suitable to the technology.
6. 4 BUSINESS PROCESS REDESIGN AND SYSTEMS INTEGRATION
It is preferred that Elemica undergoes a small business process reengineering (BPR) during its growth process. This will involve causing changes in corporation structure, culture and the systems and processes (Turban, 2007).
This will help in reviewing the current systems and procedures and also the staffing levels in order to streamline them. BPR It will help in bettering poorly designed operations, and also produce a fit between the systems and operations of varied companies in the B2B network (Turban, 2008).
This will thus bring about better systems integration with other business applications that may allow for successful global expansion.
6. 5 SECURITY AND MARKETING REQUIREMENTS
For marketing purposes, Elemica should provide links to its website on major search engines like Google, Yahoo, etc. Also, it will use social networking sites to promote it business and tap different geographies through them. Additionally, it may identify the cultural variations among various countries and design its marketing strategy customized relating to them. Also, adding customer reviews and word-of mouth publicity in the industry is a better way of getting customers who are mostly suppliers and buyers.
6. 6 INTERNATIONAL LEGAL AND ETHICAL ISSUES
While expanding globally, it's important to follow regulatory conformity in its e-business effort and apply business ethics. Also, it is doubtful in case there is international e-business in regards to what ethical guidelines and laws and regulations apply given the lack of geographic boundaries (Turban, 2008). Hence, another department must be setup to ensure conformity with relevant regulations, standards, insurance policies, and laws of the countries concerned. It will have to establish suggestions to ensure that ethical principles and moral values are designed into its commercial values in doing business in different communal, ethnical and business conditions for its internal and external customers.
6. 7 SUPPORT SERVICES
Interactive systems wherein customers can ask questions and the business can offer them with a remedy in real time.
Knowledge management can be carried out to combine information and data into proper categories.
Provide online training to the firms in order to understand the business model and make sure they are more satisfactory to the idea of online supply string integration.
This is a ongoing process and the level of services will keep on expanding recover of the business enterprise.
Based on the analysis of environmental and success factors, Elemica has the primary competencies, business processes and systems, ICT infrastructure, critical success factors, hardware and software, staffing, support services, and financial and non-financial resources to support its plan to globalize its online B2B trading hub. Remember, the security considerations and cultural differences, Elemica will be easily in a position to grow its business globally and establish a dominant position in the global market.
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