Practical eBusiness - Interactive Digital Media · First published in Ireland in 2002 by Enterprise...

Practical eBusinessCompetitive Advantage Through IT and eBusiness; a Handbook for Irish Managers

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First published in Ireland in 2002 byEnterprise Ireland,Merrion Hall, Strand Road, Dublin 4, Ireland.www.enterprise-ireland.com

ISBN 1-85954-051-1

Copyright © Enterprise Ireland 2002

All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, ortransmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise,without the prior written permission of the publisher. This book is sold subject to the condition that it shallnot, by way of trade or otherwise, be lent, resold, hired out or otherwise circulated without the publisher’sprior consent in any form of binding or cover other than that in which it is published and without a similarcondition including this condition being imposed on the subsequent purchaser.

Enterprise Ireland (EI) is committed to helping Irish companies make the best use of eBusiness/IT and to thisend wish to disseminate the contents of this book to as many Irish companies as possible. Where it wouldbe helpful to the achievement of this objective, EI would be prepared to consider requests to reproduce partsof this book or accompanying CD, without charge but subject to full attribution. Such requests should besubmitted in advance to [email protected]

This book is sold as is, without warranty of any kind, either express or implied. While every precaution hasbeen taken in the preparation of this book, the authors and Enterprise Ireland assume no responsibility fordamages resulting from the use of the information or instructions contained herein. It is further stated thatthe publishers and authors are not responsible for any damage or loss to your data or your equipment thatresults directly or indirectly from your use of this book.

British Library Cataloguing in Publication DataA catalogue record for this book is available from the British Library

Printed in Ireland by Inkspot Ltd, Dublin.

Produced by Inspiration Marketingwww.inspiration.ie

Copywritten by Cathy McGovern, Kathy Foley and Lorcan O’SullivanDesigned and Typeset by Alice DelaneyCD developed by Stephen Barr

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FOREWORD

The eBusiness performance of the IrishEnterprise sector over the next five to tenyears will be a crucial determinant ofIreland’s economic fortunes in the newglobal knowledge economy

Increasingly, individuals, firms andGovernments are conducting a growingspectrum of commercial activities over theInternet. The development of eBusiness isbeing fuelled by a combination of factors -technological, regulatory, economic and social.

The readiness of companies to adapt tothis new environment will have a

significant impact on their future growthand well being.

How quickly they adapt, how well theyadapt, and how flexibly they respond tochanges in technology, in businessrelationships and in consumer behaviourwill determine their success, and indeedtheir ability to survive. In this era in whichIrish firms face an increasingly competitiveenvironment, it is essential that they explorethe eBusiness option. Experience worldwideshows that this is now one of the mosteffective ways open to existing firms toincrease sales, productivity and profits.

This Book is the culmination of the real lifeexperiences of SME’s who availed of theeBusiness Acceleration fund over the pasttwo years and is intended to act as asnapshot of good practice in eBusiness. Eachof the case studies tells a story of how good ebusiness practice was developed in responseto the different challenges and needs ofSME’s. I hope the lessons learned by thesecompanies will help other businesses inmaking that vital leap to e business.

Mary Harney TD

Tánaiste and Minister for Enterprise,

Trade and Employment

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"Used correctly eBusiness and IT can provide significantcompetitive advantage. They offer ever-increasing opportunitiesto cut costs, while providing a better and faster service to awider customer base. It is critically important that the rightapproach is used to save time and money. I believe that thisbook can help Irish managers determine how best to deploythese powerful tools to successfully grow their businesses.”

Dan Flinter,

Chief Executive Officer,

Enterprise Ireland

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Contents

Introduction

Chapter 1. Have a Vision 1

Chapter 2. Develop a Detailed Plan 19

Chapter 3. Think Through the Inhouse/Outsource Options 35

Chapter 4. Choose the Right Suppliers (and use them right) 45

Chapter 5. Involve Your Customers and Trading Partners 63

Chapter 6. Bring Your Staff with You 79

Chapter 7. Implement Your Plan; Be Flexible and Persevere 93

Chapter 8. Maintain Focus After Implementation 107

Conclusion 117

Appendices 119

Appendix 1. Indicative Costs 120

Appendix 2. Glossary of Terms 125

Appendix 3. List of Case Studies 130

Appendix 4. List of “How To” Guides 132

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Introduction

Background

Hello and a very warm welcome!

You may be asking yourself; where did allthis advice come from? You might wonderif the issues and approaches in the bookoriginated from some “Ivory Tower”,untouched by commercial reality.

Rest assured that the advice in this book isbased on the bitter and sweet eBusinessexperiences of a large number of real lifeIrish companies. How did we track downand document the advice? Here’s thebackground.........

Enterprise Ireland ran a grant scheme,called the eBusiness Acceleration Fund.This was one of a range of initiatives takenin support of the Information SocietyAction Plan and was financed by a specialGovernment budget allocation. Thepurpose of the scheme was to supportcompanies that implemented eBusinessprojects, so that other companies wouldalso be encouraged to be pro-active aboutIT investment and eBusiness. EnterpriseIreland must extend its thanks to theDepartment of Finance and the Departmentof Enterprise, Trade and Employment for assistance in securing the funding. We also

want to thank the IDA, Shannon Development and Údarás na Gaeltachta forhelp in running the scheme.

The participating companies agreed toshare their experiences - the good and thebad - for the benefit of others. In the end, over 80 companies proceeded withsignificant eBusiness investment.

To document their experiences and“bank” the knowledge gained for others,we commissioned formal case studies onmany of the companies. The majority ofthese case studies took the form of an in-depth analysis, going into the “nittygritty” with questions such as how theyplanned it, what went right and whatwent wrong, how much it cost etc. Manyof these detailed case studies areaccessible on the CD.

A key element of the research was todocument the advice that these businesspeople would give to others embarking oneBusiness projects. It may surprise youthat much of the advice that transpired wasnot related to technical issues but to themanagement of people and processes.Although some of the advice seems basic,many very well-managed companies stillfailed to observe it.

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As you will see the projects ran very lateand naturally this delayed writing thecase studies - not all made it on to theCD but they will be on the EnterpriseIreland website.

Enterprise Ireland also commissionedconsultants to talk to almost all the non casestudy companies which received funding toderive any additional learning points fromtheir experiences. IT consultants who hadworked on Acceleration Fund projects werealso interviewed.

As if that wasn’t enough, we alsocommissioned the development of a seriesof “How To” Guides on eBusiness topics(these are on the CD and more will be onthe website).

Obviously, Enterprise Ireland itself, alsotalked extensively to Fund participants.

And now to the writing of the book............

Armed with all of this information, awriting team took on the task of pulling thebook together. This team comprised of ajournalist who had worked in an Internetcompany, a small business owner whofeels she has lived and survived (!) manyof the ups & downs shared by the casestudy companies, and an Enterprise Irelandexecutive with an eBusiness relatedMasters degree and more years (decades?)experience than he cares to remember of

dealing with small businesses. None of theteam members are IT professionals butthey did have access to expert advice.

While the Acceleration Fund was focussedon looking at how people could useInternet technologies, we learned that youreally need to look at internal IT systemsand electronics links with customers andsuppliers (internet based or otherwise) in aholistic fashion. Much (although not all) ofthe advice applicable to Internet-orientedeBusiness also applies to internal ITprojects, so this book really covers both.

We do not claim to have all the answers.eBusiness is most certainly not an exactscience - in some case what is valid formost companies may be the wrong thingfor you. You will still have to do a lot ofdeep thinking and make up your ownmind. However, the book should guide youthrough the process and at least help youto address potential issues before theybecome problematic.

Finally, we would like to say a very specialword of thanks to all the companies whohave shared their experiences with us andwith our consultants. They spent a lot oftime answering questions and proofreadingcase studies. We are fortunate that manyhave been remarkably frank about theirproblems and mistakes. Without them, theresearch on which this book is based wouldnot have been possible.

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Summary

As we have already indicated, the issuesthat arose in the implementation of theseeBusiness projects were primarily businessand human ones; not technical challenges(although there were plenty of those). Sothat’s the route we’ve taken. There’s lots ofinformation here about managing people;the project manager, the team, staff,customers, suppliers and more. Here’s theprimary findings...

Imagine the Future

Having a true vision of your business in thefuture - potentially in an entirely differentformat - can guide the way through to a re-invention of the company. Think outside thebox, consider the likely impact oftechnology on your sector and embracechange; to have a clear vision leads theway to success; be there!

Take Time to Plan

Planning transpired as the single mostimportant process for our case studycompanies. Set your objective at theoutset, get senior management buy-in, beflexible and expect the project to cost moreand take longer than you might haveexpected. You have been warned.....

The Choice is Yours

A decision that your company will probablyface is whether to outsource the requiredsupport or to access the expertise inhouse.

It transpired that for most case studycompanies a combination of both was thebest solution. Often external consultantsgive direction to the project that internalstaff cannot offer. On the other hand, whereongoing support is required post-implementation, it can be best to resourcethis inhouse; ideally by training-up amember of staff or else by recruiting-in thenecessary skills.

Choose Consultants Carefully

If you do decide to outsource work to an ITconsultant/supplier, then make sure you“Do Due Diligence”; check C.V.s of thepersonnel that you’ll be working with; findout what the contingency arrangements areto cover illness/absence and talk to theirexisting clients to gain credible references.And when you make your decision, seal itwith legal documentation; a contract ofappointment, a service level agreement etc.Leave nothing to chance as the risk is allyours for the taking but it doesn’t have to be!

Talk to Customers

Many case study companies found itextremely useful to involve customers andtrading partners in the eBusiness projectfrom the outset. This is an important part ofthe process, not least because alienatingcustomers/trading partners can diminishthe entire proposed benefit of your project.Some of the companies studied found thatby involving customers early on in the

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process, they were perceived by thosecustomers as being responsive and pro-active. This improved their relationshipswith customers.

Consult with Staff

Needless to say, nothing can be achievedwithout the pro-active participation of staff.Involving staff at the earliest possible stagein your eBusiness project will facilitateadoption of the new processes. Input at theplanning stage is essential and positivepotential benefits for staff - such aseWorking - should be considered. Alsoallow for staff turnover and back-fill for thestaff allocated to the Project Team; theycannot do two jobs at once!

Make it Happen

Flexibility also turned up as a key tosuccess in the implementation of theseprojects. Many of the issues that transpiredduring the implementation process for thecase study companies could have beenanticipated during the planning phase.However, others that arose simply couldnot have been anticipated in advance, sobe prepared for the occasional surprise.And of course, take time over your testingprocess; it’s essential to do this properly, toavoid staff/supplier/customer resistance.For many companies, the implementationphase was far more demanding thananticipated. It involved many late nights for

staff and managers from various parts ofthe organisation. You may well have thesame experience, so consult all involved assoon as possible.

Keep up the Momentum

Once the Go Live date comes and goes,it’s tempting to sit back and wait for thebenefits to roll in. Don’t do it! Stay on topof the project, make sure that the newwork practices required to make asuccess of your investment are beingadhered to. Think about your marketingoptions; don’t just build a site, forexample, and expect visitors to flood in;be prepared to adopt new marketingtechniques and to integrate these withconventional marketing campaigns. Lookto the future and plan for furtherdevelopments; they will be required.....

A Cut on Costs

Given that available budget restrictions are acentral issue for most small companies, wedidn’t feel that this book would be completewithout indicative costs, so we have includeda section on this as a broad guideline.

Go & Grow

It’s been a fascinating journey for all of us!Make use of the book as you need to andrefer to the CD for more detailed informationwhen you get the chance. Embrace eBusinessand jump ahead of the rest; go for it!

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Have a Vision

1

1. Have a Vision 11/15/02 11:59 AM Page 1

Introduction

Where do you see the company goingin the long run? That’s the question youneed to ask yourself before embarkingon an eBusiness project. Central to thispoint is the fact that the Business Visionshould drive the eBusiness Strategy;not the available technology.Interestingly many of the case studycompanies found that the initialinvestigations on an eBusiness projectacted as a probe that caused change ata strategic level.

Having a clear vision for your businessin the future is essential and the rightvision will vary radically depending onthe business. If the vision is not clearand appropriate, all the technology inthe world will fail to deliver aworthwhile result. In fact, as IT andeBusiness projects require significantinvestment, applying them to thewrong end can be a costly mistake.

The Quick Guide

• Do some soul searching

• eBusiness can be applied in ahuge variety of ways

• Consider a radical change inyour business model

• Your business strategy shoulddrive your eBusiness project

• Consider how IT & eBusinessdevelopments are changingyour marketplace

• Beware of allowing yourcompetitors to get ahead

• Verify your vision withcustomers

• Get your distributors on board

• Share your vision with staff

• Have success criteria in mind

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No doubt every business has felt thesame throughout history, but we areconvinced that this period is a time ofunprecedented and radical change forIrish companies! And change in itself cancause problems, especially when it isaccompanied by the need to makesignificant investment in technologieswhich may be outdated within 12 months.

So take time out to think through whereyour business is at, not just in terms ofwhere the markets lie today rather in termsof where they are likely to go. Recenttechnological developments havedrastically changed the face of manysectors; ask a travel agent aboutRyanair.com!

Dubarry, the footwear manufacturerbased in Galway, spent time clarifyingtheir vision of the company at the outsetof their eBusiness project. MarketingDirector, Michael Walsh, believes that thebasic research carried out at the start ofthe project is what made the difference inthe successful implementation of aneBusiness strategy for Dubarry. “Foranybody about to start the process, thework that we did initially, the soulsearching about understanding our ownbusiness, it’s crucial to do that... looking

back I think all of that was what set us onthe right road.”

Have a clear simple vision. Part of Arklowbased Vitra Tiles’* vision was “To helpextend our marketing activities to a largerportion of the market at a higher speedand lower cost.”

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Do some soul searching

Do’s and Don’ts of Developing your

Vision

Do start with a totally open mind

Do research your vision with allstakeholders

Do consider the way in whichtechnology may change theexisting environment

Do define your business modelclearly

Don’t allow cutting-edgetechnology dictate your vision

Don’t restrict your thinking withexisting limitations

Don’t be afraid to experiment; theresearch will verify the concept

✓✓

✓

✓

✗

✗

✗*Vitra Tiles case study is not on the CD but will be availableshortly on the Enterprise Ireland website.


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When eBusiness first entered ourconsciousness, the benefits were seen asthe facility to buy goods online, to reducedata-inputting costs and to cut out the“middle man”. In our case studies, it wasfound that the focus of most projects layelsewhere and a huge variety of applicationsand opportunities were uncovered.

Most companies used eBusiness/IT to doa better job of supplying broadly thesame markets and product. Their strategywas generally to do the same thing butdo it faster or better or cheaper or acombination of the three.

However, some companies seized theopportunity to follow a radically newbusiness strategy, a strategy notpreviously feasible or economic. Giventhe rapid change in the technologicalenvironment - with enormousincreases in processing power,combined with significant reduction incosts, not to mention improvedconnectivity options - businesses nowface new horizons, with plenty ofopportunity. So keep your mind open;those who realise these opportunitiesat the right timemay be bestplaced to seizethem. Excitingtimes indeed!

eBusiness can be applied in a huge variety of ways

Consider a radical change in your business model

shorter delivery times

greater customisation

smaller batches

better/quicker info for operating staff

more thorough analysis formanagement

Better info 24x7 for distributors andBusiness to Business (B2B) customers.

Improved collaboration for peopleworking in different locations

The facilitation of eWork andlocating staff in customer premises.

Streamlined checking and proofingof literature

Reduced scrappage costs andorder entry errors

✓✓✓✓✓

✓

✓

✓

✓

✓

Some eBusiness Applications


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Case Study - VLM

The digital print business niche is short-run print jobs. Customers typically wantbetween 25 and 200 copies. Becausethe quantity is quite small, so too is thephysical value.

The normal digital print process isoutlined as follows:

This is the same process as used in thetraditional printing services. But in adigital print environment this canrapidly erode margins. For instance, tocall a customer, to let them know thechanges have been made, costs 50¢. Ifthey charge €5 for a job, that’s 10%gone straight away.

VLM recognised the need to develop amore streamlined method for customersto build documents and order online.

At the end of 1999, VLM ManagingDirector Declan Malone and MarketingDirector Gerry Malone decided to

fundamentally change the way that theydid business. They therefore decided tobuild an integrated online printingsystem that would allow customers toquickly build documents and order them,with minimal interaction from VLM staff.

The goal of the project was for VLM tobuild strategic long-term partnershipswith a number of large customers. Eachcustomer would have their own secureweb site, tailored specifically to theirneeds. It would contain customisedtemplates for that customer’s marketingmaterial. The way this system wouldwork is as follows:

1. Customer logs onto secure web site2. Fills out template, e.g. for a new

property that has come on the market3. Inputs number of copies of document

required and the address to whichthey are to be delivered

4. The full-colour printed documentsare delivered and customer is billedelectronically and the whole process is managed automatically

Document sent by post

Customer createsWord document

or by email

Received byVLM operator Inputted into

Quark Xpress

PDF created/modified

PrintedDocument sent

to customer for review

Customer reviews

Customer createsdocument online

Automaticallysent to VLM

VLM operatortransfer to database Documents printed

Barcode scanned

Automaticallysent to VLM

Automaticallyupdates

Automaticallyupdates

Automatically emails customer


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It’s essential that your strategy drivesyour IT/eBusiness investment. Some ofthe companies studied found that theywere influenced by the availabletechnology, rather than focusing on theirspecific requirements. ReprographicsSystems, the largest reprographics(repro) house in Ireland, successfullyimplemented an eBusiness project. Thecompany originally assumed that awebsite would be part of their requiredsolution, however, following internalconsultation and attendance at anEnterprise Ireland Web Strategy andDesign course, it became evident that awebsite would not deliver theirobjectives. In hindsight, this wasconsidered the right decision although itwas made at a time when a corporatewebsite was a “must-have”.

We’ve already indicated the importance ofhaving a clear vision of your business inthe future before you invest in technologyto deliver that vision. However, given therate of technological change, when youdo envisage the future of the business,you need to take into consideration theimpact of IT on your market. How willyour competitors and customers embracenew technologies? Will the dynamic ofthe marketplace change completely?

As the VLM example demonstrates,sometimes new technologies give youthe opportunity to follow a new type ofstrategy. So your vision needs to be

Your business strategy should driveyour eBusiness project

Consider how IT & eBusinessdevelopments are changing

your marketplace

Compare this process with the typicalprint process diagram, and you willnotice there is no interaction from VLM.The customer does the job of buildingthe document and proofing it online.Not only does this speed up theordering process but it also ensuresthat VLM never make a mistake ininterpreting the order.


informed with a view of how customers,suppliers and competitors are likely toembrace technology over time. Forexample, Kingspan, an Irish supplier tothe construction industry, achieved a 15point increase in marketshare by movingahead of competitors through theimplementation of their eBusinessprogramme. Both Kingspan and theircustomers, the structural steelcontractors, have benefited from theeBusiness project as follows: morecompetitive lead times and more accurateorder processing. Obviously, the marketshare gain has been realised at theexpense of competitors, who have beenslower to embrace new technologies.

When formulating their business strategy,these competitors need toconsider how best to respond to themarket changes caused by Kingspan’seBusiness project.

In some cases, it’s the customer whodrives change. Lake Communications, asupplier of voice and data networkingproducts and software technology hadthis experience. British Telecom (BT), theirmost prestigious customer whichaccounted for over 30% of business,requested tighter controls over the supplychain process. This demand became thedriving force in initiating Lake’s eBusinessproject. The subsequent roll-outof the project has guaranteedfuture business with BT.

So taking these two examples, Kingspanand Lake, there can only be one decision:invest in technology or be left behind. It’snot easy but it is clear. As with everythingin business you need to embrace changeor fall away!

Threats & Opportunities

Having said that, embracing change doesnot necessarily mean copying theapproach of others in the market. Forexample, a travel agent who finds thatonline sales through the Ryanair and AerLingus websites have eliminated much oftheir former earnings, should not respondby building a website to sell Ryanair andAer Lingus tickets in competition withthose companies. On top of this, travelagents need to be aware that newoperators, such as Directski andHostelworld are nibblingaway at marketshare.Travel agents are one

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example of wherenew technologies have“cut out the middleman” and theappropriate response in this situation mayor may not involve a technological solution.Each agent will have to consider the bestfuture strategy in the light of eBusinessdriven changes in the market. Similarchanges are likely to happen in othersectors. We cannot anticipate all of these,however, this book may help you to identifypossible future changes in your market.

eBusiness has also opened up massiveopportunities for Irish companies;especially for those that see theopportunity coming. In the ‘dotcom’ era,the chance to operate in new marketswas pushed forward as a massivebenefit of eBusiness. And while thisremains true, Irish businesses havefound many other beneficialapplications. An Irish pre-printpublishing house, for example, has usedremote workers, in a different time-zoneto increase productivity and essentially

create a 24x7 service. Sercom Solutionswas originally a conventional Irishprinting company, which had expandedto meet the fulfilment (delivery) needs ofclients. The company used eBusiness tobecome an efulfilment supplier and tosubsequently transform itself into asupply chain management specialist.

Here’s an example of some of thedynamic changes in the marketplace thatcould affect your business:

Radical Reduction in the cost of Made

to Order Products

Are you managing a small business? Ifso, you will relate to the fact that in thepast, large businesses catered for themass market while smaller companiesoperated in niche markets, offeringspecialist goods and services.eBusiness and IT developments nowmean that organisations designed formass production can also producespecialist goods in a cost-effectivemanner. Take Dell, for example, whichcan process individual orders for madeto order PCs, while still achieving hugeeconomies of scale. As other largercompanies adopt this approach it couldbecome very difficult for smalleroperators to differentiate themselvesand still be price-competitive.As previously mentioned, VLM hasembraced the Dell concept verysuccessfully by producing small, unique

8

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Performance improvement througheBusiness is not an overnight process.Most of the more successful AccelerationFund projects took a number of yearsbefore they created an impact in themarketplace. If a competitor, or a distantcompany which is about to become yourcompetitor, is diligently working awayon an eBusiness and IT project to cutcosts, improve responsiveness anddramatically improve customer service,this may not be immediately apparent.By the time you realise this ishappening, it could take years to catchup. In the meantime, your business willbe squeezed. And no matter how fastyou run, your competitors may stayahead of you. But by getting there first,your business could enjoy all theadvantages of being an early adopter.

Economies of Scale

Once a transactional website is builtand the initial investment recoupedthrough sales, the marginal cost pertransaction is minimal (although don’tforget ongoing maintenance costs). Asa result, companies that achievesignificant levels of online sales fast,can quickly gain a competitiveadvantage on price. The central pointhere is that large businesses that adaptearly to online sales may squeezesmaller companies out of the market.

Customer Relationship Management

(CRM)

As software develops, it is beingharnessed to enable larger businessesto be highly sensitive to individualcustomer requirements. Therefore,while SMEs have previously had anadvantage in being nimble and quick torespond to the needs of individualcustomers, CRM systems are beingengaged by larger companies toachieve the same result, on anautomated basis. SMEs need to thinkabout how their service can adapt tomeet this new challenge. Rememberthat large companies may still retain alltheir other advantages eg. economiesof scale etc.

Beware of allowing your competitors to get ahead

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Connaught Electronics Ltd, an Irishcompany that designs and manufactureselectronic systems, set out their businessobjectives in 1999. The finalimplementation stage of the relatedeBusiness project will be in December2002. Their new systems will put themway ahead of their competition; yearsahead in reality. In your marketplace,who’s moving ahead? Is it your companyor your competitors?

Research your vision with existingcustomers (if they form part of it) and withyour target market. By doing this, you canimmediately identify whether it’s a“runner” without investing significantresources. Getting customers involved atthe early stages has many advantages:

1. Customers will immediately identifythe WIIFM (What’s In It For Me)criteria.

2 Early involvement can makecustomers more committed to theproject.

3. Talking to customers outside ofnormal day-to-day activity haspositive benefits.

4. Customer buy-in helps sell theconcept to your staff.

5. Issues with your vision will be identified and can be explored.

Verify your vision with customers


Case Study - Minch Norton

The Company:

Minch Norton, part of Greencore plc, isbased in Athy Co. Kildare andmanufactures malt for the brewingindustry. It currently employs 109people. The brewing industry isundergoing a process of consolidationand Minch Norton wants to ensure thatit continues to supply the majorinternational brewers.

The Project:

Minch Norton is one of the few maltproducers that has its barley supplieddirectly by farmers on contract, ratherthan purchasing it from grain traders.This means that for a given batch ofmalt, the company has producttraceability back to approximately tenfarmer suppliers. This gives it a uniqueselling point and the idea was tocapitalise on this by offering customersthe facility to use the Web to track themalt they were being supplied withthrough the production and deliverysystems. At the same time one of theexecutives in the company had theidea of establishing a malt tradingportal. This stimulated a debate withinthe company about its future strategyand market positioning.

Consultants were employed to help thecompany to assess its strategy andwhere eBusiness should fit with thisstrategy. It emerged that to be asuccess as a manufacturer of malt,Minch Norton needed to be supplyingthe top 10-15 brewers in the world. Aspart of the feasibility study, thecompany spoke to a sample of itscustomers including ten of the top 20brewers in the world to see what theywould like eBusiness to do for them. Itemerged that customers want todevelop long-term one-to-onepartnerships with suppliers and thatany eBusiness project should aim tofacilitate this, e.g. through reducedadministration, improved customerservice, electronic transactions, withproduct traceability a bonus but not acritical element of the process. The ideaof a malt trading site did not fit in withthis vision.

The eBusiness project was revised toinclude an upgrade of the existingquality control system and productiondata system in order to enable data tobe up-loaded to an interactive web sitethat could be accessed by customers.In discussions with two majorcustomers, it emerged that they did notwant links from a common web sitebecause of concerns over security.Instead separate web sites, customised

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to the needs ofeach customer arebeing developed.The ERP systemsof both companieswill be linked viathese web sites.This will havemajor benefits forMinch Norton as itwill provide secureaccess to demanddata fromcustomers andenable betterplanning of theproductionprocess and stock

holding. In turn, customers will beable to place orders online, drawdown relevant production, deliveryand quality control data and reducestock holding.

A new ERP system for Minch Nortonwas critical to the success of theproject. At the time, the cost ofinstalling a new system wasprohibitive. The solution devisedinvolves linking into the ERP systemof a UK sister company using leasedlines and effectively ‘piggy-backing’on this system. This part of the projectwill be the next phase to beimplemented.

Project Impact:

Even though the project is not yetfully operational, the company hasalready had major benefits from thework completed to date.

Minch Norton is currently in discussionwith two major brewing companies onhow to develop eBusiness partnershipsand the eBusiness project has helpedto develop and cement the relationshipbetween Minch Norton and these twocompanies. The development of a jointweb site along the lines discussedabove is well advanced.

One of the major barriersencountered in the development ofthe project was integration ofexisting systems. The main issuesrelated to deciding what informationto gather and how to digitise it. Thiswas made extremely difficult by thefact that the plant had been added toon a modular basis over the years.The plant operates continuously, sostopping it to install new systemswas not a viable option. Existingsystems had to be modified andupgraded and this took longer andproved to be more difficult thanoriginally anticipated. However, amajor benefit emerged as a result ofthis process. The upgrade of theproduction systems identified

ERPAn ERP system helps

an organisation

manage the important

parts of its business. It

has different modules

to look after areas such

as production planning,

procurement, human

resources and finance.

The implementation of

an ERP system involves

a considerable amount

of process re-

engineering and

employee retraining.

SAP, Peoplesoft and

J.D. Edwards are

among the largest ERP

providers.

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bottlenecks in capacity. By removingthese bottlenecks, the company hasincreased production efficiency andcapacity by 3,000 tonnes per annum.In addition, the project has improvedthe image of Minch Norton withcustomers - it is seen to be modernand innovative and capable ofdiscussing eBusiness from aneducated standpoint. The companynow understands how eBusiness canfit with its strategy and the projectgives it a competitive advantage over competitors.

Minch Norton Learning:

• Ensure that you have a clear strategyand vision of how eBusiness will fitwith this strategy.

• Talk to your customers about theirneeds.

• Prioritise the key technical aspects ofthe project early on, what solutionswill be employed and how they willbe financed.

• Define what you are not going to doas well as what you are going to doand ensure that the project links intothe business strategy and is notsome tangent or side project.

• Take the aspects of eBusiness thathelp you to fulfil your strategy and

ignore the rest - don’t get caught upin the hype - be critical.

• Get the infrastructure right.

• Make sure the Board of Directorsunderstand and are behind theproject.

• Talk to other companies involved ineBusiness - they may have usefulsolutions and learning.

• Be prepared for unanticipatedbenefits: efficiencies can emerge as aresult of a better understanding ofexisting systems gained fromimplementing this type of project.

Get your distributors on board

When transactional websites wereinitially launched by many companies,there was an intention to “cut out themiddleman”. It certainly worked for somecompanies and in some sectors,primarily those driven by price. However,a large majority of online trade isBusiness to Business (B2B). Manyprojects were initiated not to cut outdistributors but to provide them with abetter service and to give the companiesa more efficient distribution process.Distributors add value such as bringingnew lines of business to the table,offering technical support, customerfeedback, installation etc.


One of the fascinating truths that hasarisen from the case study companies isthat rather than eliminate distributionchannels, technology has been employedto reinforce them.

Basta Parsons supply retailers with locksand fittings for doors and windows. Bastadecided to build a Business to Business(B2B) web site. This meant that the sitewould be set up in such a way that onlyshops and similar business customers couldbuy directly from Basta. Consumers couldnot do so and would thus have to continuebuying from the shops. This was importantto them to secure and maintain goodrelations with their business customers.However, Basta also designed the site sothat it would, if necessary, be capable ofselling direct to the end consumer in thefuture. Basta wanted to avoid beingvulnerable to price squeezes by overdominant customers. “If one of our largecustomers started to look for unfair pricediscounts or threaten to take its businesselsewhere, we would be in a goodposition to switch to a consumer model”,explained Peter Norton, MarketingManager. “This form of protectionoffering goods directly to the customercould dissuade our retail customers awayfrom unrealistic bargaining tactics.”

Back at Dubarry, they found a way to selldirect and keep distributors happy. “Whenwe started to talk to our distributors at the

Distributors Conference in May 2000 andwe began to float this idea of moving intoeBusiness, we got a lot of very strongresistance.” Their distributors wereconcerned that Dubarry would sell acrosstheir territories and hence were veryresistant. In order to reassure theirdistributors, they took a policy decision notto sell into markets where they had anexisting presence. If, for example,somebody in France logged onto the website to search for a specific style that theFrench distributor carried, the web sitewould direct him or her to the “Locate aDealer” page. If, on the other hand, thedistributor did not carry the style in

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Some distributor questions to consider

Is my industry sector likely to moveto a direct model, selling online?

Is my ultimate customer loyal to mydistributors?

Can I sell direct and keepdistributors happy? (Dubarry did)

Do my distributors add value to theproduct/service?

What would stop technology fromreplacing my distributors (or mybusiness?)

Q

Q

Q

Q

Q


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Share your vision with staffquestion, the customer would be directedto the “Buy Online” page. To enable this tohappen, from a technical viewpoint, ruleswere built into the web site. These rulesreference the list of styles each country’sdistributor carries, and display theappropriate web page. The lists areupdated periodically to reflect any changes.

Causing nervousness and uncertainty withdistributors can be equally as damagingas treating your customers poorly. So whynot get them on board, sound them outand look at all your options. Or as yourMammy would say: “Don’t cut off yournose to spite your face!”

Have Success Criteria in Mind

There’s no point in having a visionwithout defining the way in which youintend to measure the successfuldelivery of that vision. How will youknow when you’ve arrived?

Not only will specific goals help keepyour eBusiness project on target, they’llalso give you and the Project Team thesatisfaction of knowing you’ve made it.Why deny yourself the pleasure?

It’s critical that all the staff in yourcompany are aware of, and involved in,your vision. You will meet with lessresistance internally if your employeesare onboard from the beginning, and theywill be able to make valuable suggestionsto improve your plans. Kenny’s BookExport Company in Galway ensured thatits staff was involved from the initialstages of itseBusiness projectsand was rewardedwith excellent ideasfrom the shopfloorand few problemsinternally duringthe implementationstage.


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Case Study - Sigma Wireless

Since the appointmentof Joseph Moore as

Managing Director in 1998, SigmaWireless’s strategic direction hassignificantly changed. It’s important tounderstand a number of key changesthat predated the eBusiness projectand led to it being required.

The company in 2002 is about the samesize in terms of revenue as it was in 1998,but the business and product line hasbeen totally transformed. Non-corebusinesses (e.g. mobile accessories andpower supplies) have been exited. Thecompany has moved from its focus onthe Private Mobile Radio (PMR) segmentto developing a 90% market share withinthe TETRA niche (new digital standard forradio communications) and are nowlooking to develop a similarly strongposition in the emerging 3G segment(the forthcoming new generation ofmobile phones). According to Joseph,the problem was that Sigma Wirelesshad become “A Jack of all trades and amaster of none.” The new missionstatement signalled the new and focusedstrategic intent: “To be a World Classdesigner, manufacturer and marketer ofinnovative antenna and antenna-relatedproduct solutions, worldwide.”

The vision statement underlines theambition that drives the mission:“Double our business every two years.”

To achieve this kind of growth, it wascritical for Sigma Wireless to aligntheir internal capabilities to ensuresufficient business capacity. The firststep in this process was kicking off the“Change to Compete” project. Theyemployed a consulting firm whosupplied four consultants to spendnine months working on a completereengineering of all manufacturingprocesses. This involved all themanufacturing staff undertaking cross-training and the development of amulti-skilled workforce. At the sametime they embarked upon installingEnterprise Resource Planning (ERP)software in order to integrate the keybusiness processes and to build uponthe success of the “Change toCompete” project.

Both the “Change to Compete” andERP projects were significant successesbut the eBusiness project was designedto take the company further towardsthe realisation of their strategicobjective of moving up the value chaininto the solution business. In order todeliver ‘solutions’, they needed to offerengineering expertise at a much higherlevel. Joseph Moore commented asfollows: “It’s not a matter of sendingout a data sheet, offering a price andhoping customers select you. It’s a


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matter of being able to go in, identifycustomer’s problems, pick the rightsolution and deliver it.”

This “customer intimacy” businessmodel had been successfullydemonstrated in a couple of keyassignments. For example, Dolphin inthe UK had contracted Sigma Wirelessto supply 100% of its antennae. The keyto success of this project had been closeand deep liaison with the customer’sengineers in order to create a first classsolution. Due to the improvementscreated by the “Change to Compete”project, Sigma Wireless had themanufacturing capacity to double outputwithout increasing overheads. Thechallenge they faced was how to obtaina tenfold increase in customers withoutincurring a tenfold increase in sales andmarketing and R&D costs.

Traditionally the sales team wouldliaise with Sigma Wireless’s engineersin order to get solutions to customersproblems. However, this was provinginefficient for two reasons:

• Knowledge created in thesediscussions was not being effectivelycaptured for reuse across theorganisation.

• Engineers couldn’t concentrate ontheir design work.

The solution was to put in an effectivesystem for knowledge gathering andmanagement information and this wasthe objective of the eBusiness project.

During the business planning process anumber of critical success factors wereestablished:

• Achieve goal of doubling turnoverevery two years

• Establish a new business model tomake Sigma Wireless more effective

• Facilitate a virtual company• Establish Sigma Wireless as a

centre of excellence forengineering, both in terms ofcapability and perception

• Achieve the following marketingpositioning:

“Think 3G Antennae – Think SigmaWireless.”

Available on the attached CDHow To Guide eLogistics: Potential, Strategies and ChallengesLearning Story eBusiness must support company strategyCase Studies Basta Parsons

DubarryKenny’sMinch NortonReprographicsSigma Wireless Technologies


Develop a Detailed Plan

19

2. Develop A Detailed Plan 11/15/02 12:02 PM Page 1

Introduction

Effective planning is at the heart of every successful eBusinessimplementation. A good plan givesdirection and shape to your project.When things go wrong during theimplementation of a project, it can befrustrating and a lot of time can bewasted. The only way to avoid this isto take more time at the outset, workthrough all the potential issues andplan for them before they happen.Without a doubt, this is easier saidthan done!

However, this section will help guideyou through the process. We’ll sharesome of the tips that worked for thecase study companies and give youpractical help on key issues. We’llhighlight the essential elements of agood plan and address the criticalissues of resourcing and supportingyour plan.

If you’re at the planning stage of yourproject, this section is a “must read”.If you really are too busy or are ata different stage in theprocess, check out TheQuick Guide.

The Quick Guide

• Set a clear objective at theoutset

• Preparation pays off

• Let the business drive theproject; not technology

• The plan must have seniormanagement buy in

• One size doesn’t fit all; yoursolution will be unique

• Build flexibility into your plan

• The project team may need tobe relieved of other duties

• The IT department alone doesnot make a project team

• The project may cost morethan expected

• The project will take longerthan expected!

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Unless you have a clear goal at the startof your project, how do you measureyour success? Setting clear objectivesduring the planning stage is a criticalsuccess factor for an eBusiness project.

Many companies learned the hard wayabout the importance of setting a clearobjective at the outset of the project.

Combilift produces forklifts for the localand international market. The companywas open about the fact that its websitewas initially meant to be up in Januarybut didn’t actually get completed untilMarch. The problem was that the site hadto go through a number of designchanges before Combilift was entirelyhappy with it. This related to the fact that

they were notexactly sure whatthey wanted whenthey started out onthe project. Theyadmit that thefailure to planproperly at the start of theproject probablyhindered them in the implementationphase.

The bottom line isthis: set a clearobjective and keepthis as the guidingprinciple throughoutthe life of theproject.

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Set a clear objective at the outset


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Preparation pays off

The first key step in planning your projectis to research your needs and determinethe key requirements of your project.Those companies that conductedextensive research before launching intothe implementation phase said they werepleased with their homework.

The Irish Chocolate Company, one ofIreland’s leading manufacturers ofchocolate, said the importance of writing acomprehensive initial specification cannotbe over-emphasised. It took a consultantone month of investigation and discussionsto complete a 50-page documentdescribing the company’s requirements.

The exercise of building the specificationforced the company to explore everyavenue of the site’s capabilities and drilldown to the nth degree on every detail. Nostone was left unturned.

This diligence paid off by resulting in aclear and comprehensive guide foreveryone to follow, with only a handfulof new additions springing up duringthe project. “It’s fair to everyone todetail your requirements,”recommends Michelle McBride, RetailSales Manager with the Irish ChocolateCompany. “Quoting is more accuratealong with a lack of grey areasappearing during the implementationstage. We were very focused on ourgoals and had a comprehensivedocument to work from.”

Dubarry, the Irish footwear manufacturer,also benefited from good preparation.According to Michael Walsh, theirMarketing Director, the company did flowcharts for everything, “...say the woman inthe UK looking for comfort shoes or theyachtsman in Argentina looking forspecialist footwear... All of that was whatset us on the right road.”


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Those whose research was not asextensive reported that they regrettedbeing less thorough in their preparation.Combilift, the Irish forklift manufacturer,whose delay in going live with its websitewas described earlier, said it has learned“through painful experience” theimportance of planning a timely rollout.The experience of the Combilift projectteam has led them to start the planningprocess early for their next phase ofimplementation, working out what tasksneed to be carried out and what slackmust be placed in the plan in order tocope with unforeseen problems.

This can be a time consuming process,but it is essential to know at the outsetexactly what is required of your plan.First of all, you will need to analyse yourexisting IT systems, business processesand information flows. This sort ofanalysis is hard work but will beworthwhile in the end.

Lotus Automation, one of our in-depthcase study companies, had grownradically during the 1990s. As a result theinfrastructure became increasingly out-of-date. The company set an objective tobuild and establish a MIS that supportedthe size and market position of LotusAutomation going forward. They designeda process to drive out the business andtechnical requirements:

How Lotus Planned its Project

1. They identified their customers’‘wish list’ for how they would like todo business with Lotus

2. They ran a reality check to determinethe feasibility of the ‘wish list’

3. They specified the infrastructurerequired to deliver feasiblecustomer requirements

4. They determined their own ‘wishlist’ for how they wanted toadminister and run their business

5. They ran a reality check todetermine the feasibility of that‘wish list’

6. They specified the infrastructurerequired to deliver feasiblerequirements for Lotus

7. They combined the two lists to isolate the infrastructure that the eBusiness implementation had to deliver.


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One of the lessons learned by Lotuswas that clear objective setting andplanning are key. It is critical to investtime at the earliest stage of the projectin agreeing the objectives and putting awell-structured plan together. Themanagement team considered “gapanalysis” as key at this stage, that is,working out where you are today,working out where you want to get toand isolating what you need to do toget there.

Before deciding to invest in a new systemdesigned to give you additional features,make sure that they don’t already exist orcould not be easily incorporated into yourexisting system. One consultant wasasked by a customer to add a newfunction to their system. When heexplained that this functionality wasalready available, he was asked by the ITManager not to reveal this fact as the ITManager could not admit that he didn’tknow of its existence. The consultant wasasked to confirm by email that this wouldbe delivered within a week! Only for thehonesty of the consultant, the companycould easily have been double-chargedfor this work.

The other point made in relation to thiswas not to over worry if you slip ontimescales. The key is to possessknowledge of where you are and whereyou want to be.

Let the business drive the project;not technology

In some companies, there has been atendency to let technology drive thedirection of the eBusiness project, insteadof focusing on the core businessproposition for customers.

A good example ofthis arose for C&DFoods, the Longfordbased pet foodmanufacturers, whomade the rightdecision to focus onthe needs of theircustomers. Whereasthe initial plan was tomove to Internet-based Electronic Data

Electronic Data

Interchange (EDI)The electronic

exchange of business

documents (for

example, purchase

orders, invoices, and

bills of lading) directly

between applications

executing on different

companies’ computer

systems via

standardised forms. A

precursor of today’s

eBusiness systems.

It’s also critical to prioritise effectivelysince most smaller businesses cannotafford all the features they would like.Fergal Cassidy, Managing Director ofMeasuresoft, an Irish software supplier,said this was one of the major lessons helearned. It is vital to ask yourself thequestion, “In the worst case scenario,what could I live with?” Around 20-50%of the original business requirementswould be typical and anything beyondthat should be seen as a bonus,according to Measuresoft.


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Interchange (EDI), which was the way themarket was moving at the time, it soonbecame apparent that this was a redherring. Terry Carr, the Finance Director,commented as follows “You would not gofor EDI via the internet unless yourcustomers push you that way”. The retailersin the UK had a lot of money invested intheir current EDI systems and were in nohurry to move to an internet-based solution.It was a practical lesson in designing asolution in a customer-focused way ratherthan focusing on “leading edge technology”.

You must also consider the needs of thebusiness in the short term from both astrategic and a tactical point of view. Forexample, it would not make sense to schedule the project so that theheaviest workload coincides with aparticularly busy period for your businessor with the end of the financial year.

Estimating whether the expected benefitsof the various aspects of the project justifythe likely investment interms of cost and time isas important as analysingthe strategic fit of anyeBusiness project. Ideally,you would calculate thereturn on investment (ROI)that the project will deliver.This may not be practical.Prediction of web basedsales or internal efficiency

gains are not easy to measure. Formost companies, lack of previousexperience in IT projects made itdifficult for them to estimate the stagesinvolved in an eBusiness project and toaccurately estimate the effort involvedto complete these.

As a consequence, undertaking aneBusiness project was a ‘leap of faith’ formany companies, based on theassumption that eBusiness wouldcontinue to increase in importance.Nevertheless, when you have worked outa project specification and budget, stopand ask yourself whether you reallybelieve that each element of the plan isworth pursuing.

Do not automatically assume that justbecause you can make informationavailable, that you should. For example, ifyou make pricing information availableon your site, it might give your customersa strong bargaining position or it could

be used by yourcompetitors to gainadvantage. On the otherhand, if you promote a24x7 service and youdon’t include pricing onyour site, for example,then you may need tooffer 24x7 telephonesupport.


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The plan must have seniormanagement buy in

Most of the successful eBusiness projectsstudied had the full support andinvolvement of the company’s seniormanagement. In several of the smallercompanies, the project was managed bythe company’s Managing Director. Oncethe eBusiness project is aligned with theagreed company strategy, buy-in for theproject will be easier to achieve.Developing cost/benefit analysis for theproject can provide compelling evidenceto engage senior management. Anotherimportant facet of senior managementsupport is that most eBusiness projectsaffect all the organisation’s employeesand having a senior person fulfiling therole of Project Champion encouragesacceptance of the changes that the newsystems bring.

Furthermore, a senior manager will havemore influence to overcome any

problems with staff that crop up duringimplementation, particularly if theworkload and priorities of staff arechanging. For example, if a line manageris withholding a key member of staffbecause of workload on another project,a senior manager can step in and requestthat the staff member be freed up to workon the eBusiness project.

Another consideration in making “back-office” information available on your siteis the need to ensure that it is fully up-to-date. If a stock item is no longer availableor the price is wrong, it can causedifficulty with customers. If you can’t becompletely sure that a particular type ofdata will be accurate, think very carefullybefore giving outsiders access to it viathe website.


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One size doesn’t fit all; your solution will be unique

Every business is absolutely unique andeBusiness projects can help to both revealand reinforce this fact. It’s highly unlikelythat any business could transfer an exactrigid solution onto its framework, withoutsome modification. So make sure that yourunique business gets the right solution.

There are a number of different issuesthat need to be addressed.

Which function to computerise?

In order to address this, you need toexamine your existing systems andprocesses and see where automating thoseprocesses could improve your business. If,for example, you sell 10,000 pairs of shoesper week to a large number of shops,automating order entry and invoicingshould serve you well, but if you only sell10 larger machines per week, you may notneed to automate your sales function.However, as each machine is likely to bemade up of a very large number of parts, amachinery manufacturer could, considercomputerising parts ordering.

Available Resources

Take into account the cash, time and skillsavailable to you. If you are working with asmall budget and to a tight deadline, anelaborate top-of-the-range solution is notfor you.

Degree of Integration

Another decision relates to the degree ofintegration. When a company has a fullyintegrated IT system, any piece ofinformation, such as a new order or achange in a customer’s address, only hasto be keyed in once. It can be keyed in byany staff member, from any department.Thereafter, any other staff member willautomatically see the updated version ofthe information next time they look up thatparticular piece of data. Thus, if a customertells the Sales Department that theiraddress has changed, this informationwould automatically be available toAccounts Receivable who would thus sendthe next invoice to the new address.There are different levels of integration


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with the front-end systems. For exampleDrogheda based Porterhouse has nodirect link between its website and itsback office IT system. When the websitereceives an order it sends an email toPorterhouse’s sales department. BastaParsons also has an externally hostedwebsite. Data is transferred between thisand their IT system in periodic batches.Lake Communications, a supplier to thetelecommunications industry have anentirely integrated system.

Full integration may cost more than it isworth. The right level of integration forany particular company will depend onfactors such as their existing IT systemsand the volume and type of informationthey process.

Reliability

No system is 100% reliable. Morepowerful systems, possibly includingredundant (essentially spare) hardware,will reduce the level of breakdowns, but ata cost. This has to be balanced against thecosts associated with IT failures e.g.technical support, time wasted by userstaff, operational problems such asmissed delivery schedules andcommunication breakdowns with clients.Once again, this trade-off ultimatelyrequires a business decision. Do bear inmind, however, that as companies engagein an increasing level of electronicinteraction with clients, IT failures havethe potential to damage credibility and

Build flexibility into your plan

It’s likely that no matter how thorough youare during the planning process,unforeseen circumstances will arise thatrequire your plan to be flexible. These mayinvolve changing technologies, a shift inthe marketplace, a new idea generatedinternally or a change in availableresources. Many of the case studycompanies only understood what could bedone and the wider implications of their

goodwill. Hence many of the case studycompanies found it necessary to investsignificantly in improving the reliability oftheir internal systems.

Degree of Customisation

Almost all smaller companies buystandard software packages. Whileconsiderable efforts should be spent tofind the package that most closely meetstheir needs, there will invariably be someaspects of the company’s businessprocess which differs from that for whichthe package was designed. This leavescompanies with two broad choices:modify/ configure the new system to theirway of working or change the way theywork (although don’t compromise yourbusiness processes to match thesoftware). Generally, companies adopt amixture of the two, but once again theexact approach will be unique to thatcompany.


eBusiness projects during the process ofimplementing the projects. In fact, many ofthem actually implemented differentsolutions to those planned at the outset.Perhaps, this could have been avoided orat least reduced, if the architects of theproject had attended training courses priorto the planning stage.

So it’s essential that you plan to beflexible with your plan! You still need tobe focused on the ultimate goal but youshould consider your plan as a processto achieve this goal rather than a rigidand restrictive structure.

Where possible it’s a good idea to breakyour plan into modular sections. Not onlywill this ensure a smootherimplementation but you should also havesomething new you can use after eachmodule is completed

Whereas your main plan is an overviewof the entire project, there should also bea detailed plan for each deliverable.However, the detailed plan for the latermodules does not have to be completedat the outset. It can be finalised later andcan thus take account of the outcome ofearlier modules, the most recent businessneeds or newly available technology.

For example, Lake Communications,having been through an eBusinessimplementation, would advise companies

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to recognise that eBusiness solutions aredynamic and constantly evolving. Thecompany would also advise others toensure that “your inhouse IT/ISinfrastructure is well thought-out and builtwith fault tolerance and load balancing”.

Although their project was launched inJanuary 2001, as planned, Lakeexperienced some difficulty with theadditional load placed on the IT/IS systems.To rectify these problems, Lake set aboutbuilding fault tolerance and load balancinginto their architecture whilst the systemwas still live. By June 2001, Lake wassatisfied that the eBusiness application was24x7x365 with 99.999% uptime.

So by being flexible with your plan, youare able to respond to any situations thatarise while keeping true to the desiredresult and ultimately delivering your goal.


One of the lessons learned that has comethrough again and again from thesecompanies is that it is likely that theProject Manager and the team will have tobe relieved of their regular duties. Whenplanning a project, it’s essential toaccurately assess the workload ofmanaging an eBusiness Project. Typicallythis is significantly underestimated. Theplan then needs to address this issue byensuring that the proposed ProjectManager is “back-filled” or replaced whilehe/she is dedicated to the project. Obviously the same process needs to beconsidered for each member of the team:

The project team may need to berelieved of other duties

what’s the likely workload and who willtake on existing responsibilities?

Jimmy Dalton, the AdministrationManager of C&D Foods was a keydecision-maker of the eBusiness projectat the company. Jimmy mentioned arecent report he had come across thatrecommended allocating three days ofstaff time to every consulting day youpurchase. C&D Foods did not have theresource in place to do this. It was alsofelt that insufficient internal resourcescould offer suppliers a convenientexcuse for failing to deliver.

Combilift had a similar experience. At thestart, Colin Gray, the IT Manager was notworking full time on the project. Theimplementation took more of his timethan was originally thought. The learningwas that a project like this needs a full-time project manager from the start inorder to ensure successfulimplementation. It is easy tounderestimate the resource requirementand then difficult to make up time later.

So a key part of the planning processinvolves releasing the Project Manager andthe team from existing responsibilities.

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The IT department alone does notmake a project team

There may be a temptation to allocateyour eBusiness Plan to the IT Dept. andthat’s a bad mistake! If the eBusinessproject is worthwhile, it’s fundamental toyour strategy. If it’s that important, andyou’re a business manager - would youentrust your business solely to the ITguys? Let’s put it another way. If you’re atechie - would you allow a bunch ofaccountants loose on your systems?

Non IT staff will contribute to theproject in a variety of ways, including:• identify existing processes• document these in great detail• design new processes where these

processes need to change for theeBusiness implementation

The project will only work if it reflects thefuture vision of the business and the ProjectTeam has to reflect all the departments thatwill exist within that vision.

A good example of this is the casestudy on Porterhouse Ltd. This was acomparatively straight forward project as,unlike many of the other case studycompanies, they did not integrate theback office with the website nor did theycarry out any significant upgrade of theirback office software. The company alsocontracted out all the technical work.Despite this, the project still requiredconsiderable management time. Theinternal Project Team included theManaging Director, the FinancialController (as Project Manager) and anadministrative resource. The timecommitment for each of the internalteam members was considerable:

More elaborate projects can require thecommitment of far more staff time.Clondalkin based Sercom Solutions, forexample, installed a complete newEnterprise Resource Planning (ERP)system and integrated it fully with a new

• Matt Doolan, Managing Director 40%

• Dermot Marron, Financial Controller/Project Manager 60%

• One administration person 100%


As many eBusiness projects are centralto the strategy of the business, they oftenrequire significant investment. Hence it isimportant to prepare a budget. This isn’talways easy. Due to the nature of aneBusiness project, it can be difficult for abusiness manager to assess the truetechnical requirements and the costimplications of these.

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The project may cost more than expected

Software suppliers should be able to givean indication of the hardware resourcesneeded to support their product.However, this is an inexact science. Theproblem is exacerbated by the tendencyof some software suppliers to understatethe required hardware specification, in anattempt to downplay the overall cost oftheir solution.

Furthermore, as Colin Hadden of theAnthony Nicholas Group* pointed out,the number of PCs tends to “grow likeTopsy” as more and more departmentsfind ways of benefiting fromcomputerisation. He indicated that overthe years the company had learnt thebenefits of buying hardware with higherspeeds and more memory than initialestimates might suggest are needed.

web front end. During the implementationphase of the ERP project, SerCom selecteda team representing all departments. Theirnormal roles were back filled and theyworked full time on the project for 7months assisted by 8 external consultants.A change manager was also seconded tothe team. Other staff members had tospend time on training courses, handlingaspect of the changeover to the newsystem, sitting on steering groups etc.While the ERP implementation was themost intensive phase of the project,significant staff time was needed on otheraspects of the project for many monthsbefore and after this phase.

The fundamental message is this: aworthwhile eBusiness project is about thecore issues in your business, not solelyabout technology. So you need a teamthat understands these issues from everyperspective in the company.

*Anthony Nicholas Group case study is not on the CD butwill be available shortly on the Enterprise Ireland website.


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No matter howdetailed your plan isand how dedicatedyou are, yourproject willprobably run overthe expectedtimescale. Of the 86companies thatreceived funding foran eBusinessproject from the

Enterprise Ireland Acceleration Fund,fewer than half had completed theirprojects by the deadline of October 2001.On an 18-month timescale, companieswere typically 6-12 months late reachingcompletion. Some could yet be two yearslate on completion. These delays occurreddespite the fact that the companiesinvolved had a great incentive to finish ontime, as any monies spent on theirprojects after the deadline were at risk ofnot being grant-aided.

The Irish Chocolate Company’s projecttook about four months longer thananticipated. Michelle McBride, RetailSales Manager says “Account for allpossible time delays when launchingsuch an initiative as it’s often impossibleto dedicate 100% of anyone’s time”.

The project will take longer than expected!

Another element of cost which shouldalso be borne in mind is the cost of changing your existing businessprocesses to meet the needs of yournew vision of the business.

To a certain extent, many of the casestudy companies were breaking newground in implementing eBusinessprogrammes in a highly dynamicmarketplace. This has had the effect ofincreasing costs in most instances.Blarney Stone, for example, signed acommercial revenue sharing scheme withNua, who ran www.localireland.com.

However, Nua had very specificrequirements regarding functionalityand design for partner sites hostingweb catalogues. The deal turned sourwhen, after Blarney Stone spent €50kchanging their site to Nua’s specificinstructions, Nua went into liquidation.But rather than admit defeat, Blarneyembarked on another course of action -it was decided that this time they woulddeliver as much of the project aspossible themselves.

In the same way that you need to leavea contingency for extra time, additionalcost is highly likely and an allowance forunforeseen costs should be built intothe plan.


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Available on the attached CD

Case Studies C&D FoodsCombiliftDubarryThe Irish Chocolate Company

Lake Communications

Lotus Automation

Porterhouse

Do clearly define the internal effortrequired for the project

Do allow for flexibility. New ideasmay improve the project but delaythe plan.

Do plan for the loss of key staffinvolved in the project

Don’t over-estimate what can beoutsourced to an IT company

Don’t depend entirely on key staffor consultants; work with a team

Do’s and Don’ts of Developing a Plan

✓

✓

✓

✗

✗

When we discussed some of theselearning points with Andrew Butler ofConnaught Electronics, he said that“taking longer than expected” was aserious understatement. We should bewarning our clients that they are likely totake far longer than expected.

So no matter how brilliant your planseems, make sure you allow extra timefor the unknown. Build a contingency intoyour timescales!

Even something apparently as simple asgetting some extra telephone lines needsto be considered at this stage. If yourplan requires you to have new lines,order them sooner rather than later asmany of the case study companiessuffered months of delay and frustrationin the implementation of their projects,waiting for lines to be installed.


Think Through the Inhouse/

Outsource Options

35

3. Inhouse or Outsource 11/15/02 12:03 PM Page 1

Introduction

Do it inhouse or outsource the work?It’s a tricky question but it’s also theone that every company faces whenconsidering an eBusiness project.Although the case study companieschose a variety of solutions - internal,outsourced, combinations of both - westill don’t have a definitive answer!

The inhouse/outsource decision is notjust a short-term issue. As eBusiness/ITis likely to grow in importance into thefuture, you need to make long termdecisions about what capabilities tobuild inhouse. This will involvedecisions about the mix of recruitment,redeployment and training needed tobuild the desired capabilities.

Looking at the case studies we couldfind no clear correlation betweenproject success and any particularapproach to the inhouse/outsourcedebate. As with so many other aspectsof eBusiness, you are going to have tomake up your own mind based onyour own particular circumstances.

In this chapter, we touch on the keyissues that will help you make theright decision for your business.

The Quick Guide

• Consider inhouse options

• Outsourcing alleviates drainon internal resources

• Be inventive with IT staffrecruitment

• Take account of the uniquetraits of IT staff

• Don’t be too dependent onexternal suppliers for advice

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In the past, taking on additional project workinternally was difficult for many smallercompanies - especially where technologywas involved. Software packages didn’t existto undertake much of the work required, sotasks had to be programmed from scratch.Technical expertise was at a premium andthere was often a lack of understandingbetween the business and technicalemployees.

In today’s environment, however, non-ITemployees can work very effectively tohelp deliver eBusiness projects and thisis a real option for many companies.

To a large extent, the decision maybe influenced by the type of skillsrequired to carry out the work. Withthe case study companies, there werefour areas where the inhouse/outsourcing choice existed:

• Project Management• Formulating Strategy and Scoping

Requirements• IT Development Work • Ongoing technical support,

maintenance, user training, minorimprovement etc.

In the case of Project Management, thevast majority of companies chose to dothis inhouse, although the amount of

time required for the project wasinvariably underestimated. In scopingrequirements, companies used a mix ofsolutions. Some did this inhouse andothers employed an independent

consultant. There’s a section on thistopic in the Planning Chapter.

In a large majority of cases, themain bulk of the IT developmentwork was carried out by externalconsultants. However, even where

this was the case, there was asignificant trend towardsstrengthening the inhouse ITcapabilities either byrecruitment or training ofnon-IT staff or by acombination of both.

There are a number of keyissues to address. For example,

is the learning effort going to begreater for an external IT

consultant to come in and learn aboutyour business processes andrequirements or for an internal employeeto learn the required IT skills?

You can reduce this learning curve forexternal consultants e.g. by using anexisting supplier or one with industryexperience. If you train an internalmember of staff, the learning curve aboutyour business is radically reduced. This

Consider inhouse options

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will save time and money. There is a risk,however, that they will leave to go towork for another company, using theirnew skills. No one solution came out ontop but many companies were happy withthe route they chose for their business.

One compromise that worked for somecompanies was to have an ongoingrelationship with an independent ITconsultant. In effect, what they had was apart-time IT manager who also worked fora number of other small companies. This isvery like the arrangement some companieshave with their external accountant.

Case Study - Franz Design

Although this small furniture andgiftware company had successfullygained expertise in sales and marketing,they had no inhouse experience ineither IT or web design. Their choice,therefore, was to either employsomeone full time or outsource thedevelopment of the site. The companybelieved that a full time staff memberwould be too costly and were morecomfortable employing the services ofan external agency. “When you are notfamiliar with the technology, it isdifficult to ensure that you are going to

get the right person for the job in hand”,explained Franz Caffrey, the owner. “Welooked at different options and basedour decision on having the peace ofmind of using a reputable company withthe right expertise. In addition, theinterim costs were lower.”

Franz selected their web developmentcompany for two reasons. Firstly, theirinput into the list of requirements wasinvaluable. “Upon initial contact theyquickly grasped the concepts and ideaswe were pushing for”, Caffrey explained.“They were positive with their approachand came up with constructive andimaginative solutions”. Secondly, theweb development company quoted avery competitive price to build andmaintain the ‘web store’ - €12,700. Aspart of the deal, the site was hosted inDublin. This made sense due to the lackof inhouse IT expertise to install andmaintain the system and the lack ofresources to purchase costly serversand network connections.

Despite the complexities of the site, thedevelopment work took only twomonths to complete. The sitefunctionality featured:• an online catalogue displaying

selected products• the choice of five different currencies• information on individual product

lines such as expected delivery time• individual user account summaries

“We looked at different options and based

our decision on having the peace of mind

of using a reputable company with the

right expertise. In addition, the interim

costs were lower .”


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CASE STUDY UPDATE - Franz Design

Since the above case study was firstwritten, there has been a developmentthat illustrates one of the potentialproblems of outsourcing. Franz Caffreyhas advised us that as a result of aproblem with the web developmentcompany the website is “off the air” andso is their e-mail. We can only imaginethe disruption and stress this hascaused. However, following intensivediscussions with the web hostingcompany, they expect to get both theweb site and e-mail up and runningshortly at the old address.

Do I have internal IT people capableof doing this?

Will the extra workload be longterm or short term?

Do I have employees keen to betrained up for it?

Can I recruit staff with the rightskills?

Will there be ongoing workinvolved in the future?

Could an existing supplier, who knowsmy business, take on the project?

Is there an external supplier withexperience in my sector?

Which option will cost me more?

A few questions on the

Inhouse/Outsource issue

Q

Q

Q

Q

Q

Q

Q

Q

One company that decided to retrain amember of staff and outsource the moretechnical requirements was Tecpro. Priorto beginning this project, Tecpro had noeBusiness skills or experience. TheManaging Director, James Neary, led theproject and began by carrying out anevaluation of the available software,

enabling users to view previousorders and modify account details

• real-time updates indicating whichstage a user has reached during thebuying process

• a database constantly recording allrelevant transactions

Franz was a relative newcomer to theworld of technology, but their webdeveloper worked hand in hand withthem every step of the way. All issueswere discussed and addressed until thesite was completed. This partnershipapproach was best demonstrated duringthe promotion phase. The developmentcompany ensured all Irish home interiorspublications were informed about the siteresulting in a number of them carryingreviews of the site.


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looking for a product capable ofproducing A3 spreadsheets. Intactsoftware was recommended by a friendof the company and this was eventuallychosen as the basis for the new system.An IT company customised the softwareto meet the needs of Tecpro, installed thesystem and continues to provide serviceand support.

This mix of inhouse and outsourcedskills has been successful for Tecpro.The company is well on its waytowards becoming a paperless office. Ithas reduced its paper filing by over90% through this project and hasreduced their administrative staffheadcount by one.

Measuresoft specialises in thedevelopment and integration ofinformation systems. The companydecided to scope and develop theirrequirements internally. As a technologycompany, Measuresoft had the basecapabilities to tackle this challenge andthey wanted to internalise some of theskills acquired during the developmentand the deployment in order to utilisethem on future customer engagements.Managing Director Fergal Cassidy wasclear, however, that companies that donot operate in the technology sectorshould look externally for the right skillsand support.

Do take time to clearly define and agree theobjectives with the consultants

Do outsource the things that drain yourtime

Do treat external suppliers as part of theproject team

Do implement a service level agreement

Do document your requirements clearly

Don’t leave staff out of the loop. Explainthe role of the supplier

Don’t forget to have regular formalmeetings to track progress

Don’t sign off on work until it’s fully tested

The Do’s and Don’ts of

Outsourcing

✓

✓

✓

✓✓

✗

✗

✗

Outsourcing alleviates drain on internal resources

Don’t underestimate the value of beingable to delegate work to an externalsupplier. In the chapter on planning, weexplored the fact that many companiestotally underestimated the amount oftime required to manage and implementan eBusiness project. A key learning


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point that arose was the need to “back-fill” staff involved in the project, i.e. toallocate some of the individual’s duties toother employees.

If you are involved in a business, it can bevery difficult to “let go” of yourresponsibilities. Even if you do manage toallocate your responsibilities to others,once you are on the premises, day-to-daywork will inevitably come your way.We’ve all experienced that!

Another option is to outsource the work.By doing this, you can stay focused onthe important role you play in thebusiness without delaying theimplementation of the project.

When the board at Blarney Stone, acompany which produces various giftideas manufactured from blarney stone,decided to outsource the projectmanagement of the implementation oftheir eBusiness project, they employedthe services of a project manager withinSolomon Solutions. The initial role was toset up the servers and databases andsubsequently project manage the designprocess and the roll-out of the site. Inreturn Solomon Solutions received equityin the company. Their experience in suchroles proved invaluable to the project.Specifically, Solomon Solutions was ableto draw up a plan detailing the siterequirements and timescales. It managed

the development and roll-out process ona daily basis, spending time on themanagement of details that DeclanFearon, the business owner, didn’tpersonally have time to oversee.

Meanwhile, back at Lotus, a provider ofindustrial automation products andservices, considerable time was investedin scoping the requirements of theirproject. The company also employed anexternal consultant to help in the design ofthe process and in choosing the righttechnology to deliver on the requirements.

In fact, this consultant then went on tojoin the company. This allowed thecompany to internalise his knowledgeand skill set and it strengthened thecompany’s IT capability. Despite thisunexpected advantage, one of thelessons learned by the company was thatthey would have outsourced a lot more ifthey had known the pressure onmanagement time.


Blarney Stone, the gift manufacturer,looked at outsourcing their whole project,from management through to design,hosting, telesales and fulfilment. As eachelement was explored, the projectedcosts started to rise dramatically. Facedwith these daunting numbers, thecompany concluded that the only way tobring this project to successful fruitionwould be to do the majority of the workinhouse. The first money saving idea wasto employ the services of a group ofsoftware engineers known personally tothe founder, Declan Fearon from his timeat the University of Glasgow.

A unique deal was struck whereby theengineers would come to Dublin to workon the project. During weekends they werehoused, fed and watered in Temple Barand during the week they worked for free.Both parties enjoyed working and playinghard, so this deal was a win-win situationfor all involved. The techies got to spendthe weekend in the vibrant Temple Bardistrict and Blarney Stone got the servicesof some very high calibre softwaredevelopers to build and test their site. Avery ingenious arrangement indeed!

As you can see, both of these companieswere able to recruit the right staff, at theright cost, by taking time to “think outsidethe box”. That’s your challenge!

The process of recruiting IT staff was apainful one for many of our companies.Most of the case study eBusinessimplementations took place during thedotcom era and IT staff were difficult tofind and very expensive.

Having looked at its options, onecompany found that custom-building itsown system was a better option, asspecialist off-the-shelf software wasexpensive. However, the custom-buildoption was highly dependent uponinvesting in people with the right IT skillsand a good understanding of theirindustry. The company’s attempts torecruit an IT manager and programmer inIreland proved unsuccessful. (This was2000 and the peak of the dotcom frenzy).Eventually two new staff with IT skills andexperience in their industry were recruitedfrom India, making use of the IrishGovernment’s scheme (now closed) foroverseas recruitment in specialist areas.

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Be inventive with IT staff recruitment


While the layperson may see IT as ahomogeneous profession, it is made upof many specialities. A databasespecialist, for example, who has spenthis or her entire career in largeorganisations may have virtually noexperience of websites or networks.

It is not just a question of differingtechnical specialities. A person who isbrilliant at technical work may not bethe best at ensuring vendors meet theircommitments or at persuading users toobserve proper security disciplines or atsmoothing feathers ruffled by ITenabled changes.

Hence, a small company that can onlyafford one or two IT people may have toprioritise the skills that are most importantto it. You may have to plan on hiringsomeone who is weak in some of the areasthat are least important to you, then

upskillingthem in thoseareas. It mayalso benecessary tocall inexternalspecialisthelp for themore difficult

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Take account of the unique traits of IT staff

tasks in the disciplines where they areweak. You may also have to arrange for amanager from another function to workwith them on “political” issues such asmanaging vendors or promoting userdiscipline.

Computer users are often unable toexplain clearly technical problems theyencounter, while the ‘techies’ may find itdifficult to convey technical issues inlayman’s language. In a large organisation,a business-focused IT manager can helpfacilitate communication between themand bridge the gap. That approach doesnot work if the ‘techie’ is the only ITperson in the company.

In these circumstances the potential ITrecruit’s interpersonal skills and businessawareness assume greater importancethan would be the case if they were beingrecruited into a large IT team. Post-recruitment, it may be worthwhile puttingsome effort into developing theirknowledge and interest in the business.

IT people traditionally are more mobilethan staff from many other disciplines.Good HR practices may help retain them.However, you should also plan for thepossibility that they will leave. You shouldinsist that the IT person keeps proper


records of their activities, for example,that they properly document any softwarechanges they make. You might alsoconsider assigning a senior manager tothe task of staying briefed on thecompany’s IT developments and issues.

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The company that supplies and installs asoftware package often continues toprovide technical support and upgrades,for a fee, for many years. Clientcompanies without internal IT staff oftencome to rely totally on such consultantsfor all their computer advice. In theabsence of any inhouse IT expertise, theyhave little choice but to accept that advice.It is a cosy arrangement, particularly forthe IT supplier, but may not be in the bestlong-term interests of the client.

Effectively, a monopoly supplier is tellingthem what they need to buy and thenselling it to them at prices set by thesupplier. At the very least, consider

learning enough about IT so that you arein a position to ask probing questions andto critically assess the responses.

One of the negatives of the successfulrelationship that C&D Foods has builtover the years with Task (its external ITconsultants) has been an over-reliance onTask for all their IT development. TerryCarr, Finance Director, expressed regretregarding this and suggested C&D Foodsshould have developed a greater depth ofinternal IT capability over the years. Thishas hampered them to some extent in thecurrent implementation. They would havebeen better able to evaluate a number ofdecisions if they had that depth ofinternal technical capability. Both Terryand Jimmy Dalton, the AdministrationManager, maintained that firms looking atoutsourcing of their IT function shouldconsider the downsides of losing depth ofexpertise inhouse.

If you do decide to outsource, you needto stay informed, so that you canadequately manage the process.

Don’t be too dependent on externalsuppliers for advice


How To Guides How to Choose an eBusiness Vendor

Case Studies Blarney StoneC&D FoodsFranz DesignMeasuresoftTecpro


Choose the Right Suppliers

(and Use Them Right)

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4. ChoosetheRightSuppliers 11/15/02 12:05 PM Page 1

Introduction

When a business manager has tochoose an IT supplier, it can presentmany difficulties. How can you tell ifthe proposed solution is appropriate ifthe IT Consultant seems to be talkingin a different language? You couldbring in the IT Manager to do theselection (if you have one) but doeshe/she really understand the cut andthrust of your business?

The good news is that this is an areawhere the contents of the CD can helpout! The case study companies havelots of advice to share with you on thischallenge. In fact this chapter could becalled “The Agony and The Ecstasy...”

Given the level of investment requiredin your eBusiness project, this sectionof the book is essential reading foranyone considering outsourcingeBusiness-related work or buying insoftware - don’t skip it! In themeantime, The Quick Guide will giveyou the lowdown...

The Quick Guide

• Consider using anindependent consultant atthe outset

• Cost doesn’t always equalquality

• Different projects better suitdifferent consultants

• Do due diligence!

• Pro-actively manage therelationship

• Implement a service levelagreement

• Check who owns thecopyright

• Get more from your InternetService Provider (ISP) andTelecommunicationsCompany (Telco)

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Most IT consultants only work withcertain specific software packages, orhave ties to particular vendors. Indeed,some of the “consultants” you meetinitially, are effectively sales people forparticular products. This poses adilemma, if you do not have the inhouseexpertise to work out your exactrequirements or to compare the technicalclaims of competing potential suppliers.

Some consultants have no links to anyvendors or products. This means youhave a choice: you can ask potentialsuppliers to suggest what IT capabilitiesyou need or alternatively, you can payan independent expert to clearly defineyour needs before you approachpotential vendors. If you opt to use anindependent IT consultant they couldalso help you in your dealings withsuppliers, including assessing eachoption and recommending the bestsolution which may be a combination ofproducts and/or IT providers.

Our experience has been that many of thecase study companies just couldn’ttolerate the thought of paying anindependent consultant to select the rightsolution. We don’t blame them – whatsmall company wants to pay one

Consider using an independentconsultant at the outset

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consultant to hire another consultant? Onthe other hand, experience hasshown that the companies, whichemployed independent consultants, aregenerally convinced that it was the rightthing to do. Obviously havingknowledgeable, independent advice atthe outset could ultimately save timeand money and therefore its definitelyworth considering this approach.


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Having said that, employing anindependent consultant, may not alwayslead to the best overall compromisebetween cost/complexity on the one handand the features you would ideally like tohave on the other. If you went directly to avendor, without first drawing up aspecification, they would draw up atechnical proposal which took accountboth of your business needs and of thecapabilities of their own packagedsoftware. An independent consultant,unlike a vendor, may not be as familiarwith the capabilities of individual packagesand the cost implications of addingspecific features to them. Someindependent consultants, having drawn upan “ideal” technical specification, may beover rigid in sticking to it and could thusleave you with a solution which, whiletheoretically appropriate, is much moreexpensive or complex than it needs to be.

Case Study -Digisource

DigiSource prints user manuals for thetelecommunications, computersoftware, hardware and other markets.The company works with itscustomers to reduce their printing andassociated costs through JITdocument delivery.

eBusiness Objective

To develop acentralised ITSystem from itsheadquarters inDublin, givingvisibility andcontrol over all itsIT systems globally.

The eBusinessmodel was to bebased on the factthat EnterpriseResource Planning

(ERP) and Customer RelationshipManagement (CRM) packages aremerging to become powerfuleBusiness suites.

Implementation

Initially the company looked at buildingon the back of existing systems.

It then focused on the actual eBusinessneeds, which were primarily financial and toa lesser extent manufacturing. DigiSourcerealized, however, that building on existingsystems would not meet these needs.

Through analysis of needs (combinationof ERP, CRM and eBusiness) andevaluation of system capabilities, cost,and level/availability of support - usingpeer groups and interaction withstrategic partners - suitable systemswere narrowed down.

JITJIT or just-in-timemanufacturingdescribes anapproach in whichcomponents orproducts are onlymanufactured asthey are needed,in the exactnumber needed,and supplied tothe point of use atthe exact timethey are needed.


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Lessons Learned by Digisource

• DigiSource found that using vendorsat the feasibility stage could beineffective and a waste of time, asmany were pushing particularproducts. It would recommend thatfeasibility be carried outindependently.

• It is very important to make sure thatthere is support with a suitable skillbase available locally, for thesystem(s) chosen.

• DigiSource tended to approach itsproject from the technical end but inhindsight, the project team believes itshould probably have approached itfrom the business end.

Eventually SageEnterprise andMicrosoft BizTalkwere chosen, alongwith CrystalReports (a productthat Sage considercomplimentary totheir own), thelatter two beingsystems capable ofbeing easilyexpanded.

Support for thesystems chosenwas initiallyprovided locallybut the necessary

skill base was not available in Irelandand queries were referred back to theUK. DigiSource therefore took the stepof persuading the support company(FD Systems) to open a Dublin office toprovide the necessary support.

For eBusiness two models weredeveloped - automated (invisible) andtransparent (web).

Automated transactions are ones thatdon’t have to be seen or processedthrough the web, such as MRP orderdumps or outgoing invoices. Web based reporting is used for mining

data and querying individual orders orstock levels etc.

Through their eBusiness projectDigiSource International has created anelectronically based method of doingbusiness and of organising, schedulingand controlling manufacture at remotesites around the globe, from a centralisedDublin base.

The systems developed have putDigiSource International at the forefrontof its industry.

CRM

CRM (Customer

Relationship

Management)

uses proven

methodologies

and eBusiness

technologies to

help enable

companies to

identify, select,

acquire, develop,

and retain

profitable

customers, and

build long-term

relationships with

those customers.


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Case Study -Combilift

Ernst & Young consultants significantlyshaped the decision for Combilift, thespecialist forklift manufacturer,regarding how to move forward withtheir planned eBusiness initiative.Combilift engaged Ernst & Young to runan ‘eDiagnostic day’. During that dayCombilift and the Ernst & Youngconsultants worked to establish thecurrent state of capability and thedesired state of capability for eBusiness.This enabled the production of thebusiness requirements for the initiative.

Martin McVicar, Managing Director,stressed the benefits of engagingconsultants who have an “independentview” and who do not have a productto push. He believes the cost of theday was money well spent. Ernst &Young encouraged Combilift to lookat the big picture. They posed thequestion, “Where do you want to bein five years time?” The answer wasthat Combilift wanted to be selling itsproduct in 50 countries worldwide. Inorder to achieve that it realised itneeded a strong and effective website to support dealers.Earlier in the process of finding

a suitable web designer to deliver theweb site it required, Combilift had methalf a dozen different firms. They foundthat it was a real struggle to findsomeone who understood thecommercial drivers of their business.Often website designers wanted to jumpten steps ahead while Combilift reallyjust wanted to take one step at thispoint in time. Martin McVicaremphasised that there was anadvantage in meeting so many firmsthat failed to offer what he and the teamwanted. This actually allowed them toincreasingly clarify exactly what theywere looking for. He recommended that

other small businesses should go


through a similar process to help themrefine their thinking around theirbusiness requirements.

In the end, Ernst & Young recommended Catseye InternetSolutions and this company was chosento work with Combilift to develop theweb site. Martin was clear as to whyCatseye were chosen over potentialvendors, “They listened to what wewanted. All the others tried to tell uswhat we needed.”

Often there’s a temptation to assume thatthe most expensive solution is the bestone. However this has not been theexperience in our case studycompanies. On theother hand, thecheapest solutionmay not fullydeliver on therequirements.

Porterhouse, theIrish WeavingCompany, chose webdesign company QBIKS (nowcalled Climate) because it hadexperience of working with other

Cost doesn’t always equal quality

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firms in the textiles industry and it wasflexible enough to take on extra projectwork if required. It would also organisemany of the marketing requirements.While QBIKS was an ideal fit forPorterhouse, it was not the mostexpensive option available.

When Speciality Print and Design (SPD)looked to third-party suppliers toformulate quotes based on theirrequirements, the experience ofentertaining a series of bidders for thistender proved an eye opener for thecompany. The quotes and proposalsreceived varied dramatically. Most wereextortionately expensive. One particularcompany even billed SPD for their initialmeeting to discuss their requirements!

As SPD had little experience with webdesign, they decided to look at the morefavourable quotes and do a little digging.SPD went to great lengths to investigatethe credentials and references for the

companies on their final selection list.After calling up the references

directly and looking at the worksupplied, SPD selected

Go2Web based in Dublin.Go2Web not onlyprovided a very

reasonable quote, buttheir referenceswere impeccable,

both in finished


product and the high level of customerservice they provided. As many of thecase study companies found a hugevariation in the quality of IT suppliers,this is a vital point.

And it’s worth noting that the cheapestoption may represent a false economy, ifit means foregoing critical elements ofthe solution such as security, training orback-up arrangements.

In particular, if you’re negotiating theprice with a supplier, be careful to avoidreductions in cost which save money butdecrease the effectiveness of the solution.

Future Proofing (designing the system tofacilitate future developments) is anotherarea which can significantly affect costsrelating to an eBusiness proposal and it’scritical that every eBusiness solutiontakes into account both technologicaldevelopments and the changing needs ofthe business. Kenny’s Book ExportCompany faced this issue when they

decided to build an online catalogue ofabout 900,000 books, to facilitate sales. Itwas imperative that the back-officesystems were built to very high standardsso that they would be future-proofed andgive Kenny’s a solid platform on which tobuild services in the future. This was ahuge investment for a small company butgiven the dynamic needs of both thebusiness and the marketplace, Kenny’sfelt it was worth it.

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There are four defining traits to thinkabout when choosing an IT professionalto work with. These include:

• Appropriate Technical Skills• Sector Experience• Business Skills• Personality

Once you identify your requirements, youneed to match these to the relevanttechnical skill-set that can deliver theproject. For example, while aprogrammer can build a site, he/she maynot be a designer. As one web designerput it “Have you ever seen a sitedesigned by a programmer - yeuch”.Similarly, a consultant whose soleexperience has been with Fortune 500companies is unlikely to be the bestadviser for a small company. To a largeextent, this demonstrates the usefulnessof independent expert advice in findingthe right providers.

In terms of sector experience,considerable time and effort can be savedif the proposed supplier understandsyour industry. This simply eliminates alearning curve that another supplier willhave to climb. This curve may be easier toovercome if the supplier has “a goodbusiness head” and can grasp thebusiness issues with ease. This is

C&D Foods appointed BSM Ltd. to helpchoose an appropriate application.Together, they chose two companies todeliver the complete solution, after takinga detailed look at several providers. TerryCarr, the Finance Director, and JimmyDalton, the Administration Manager, werethe key decision makers and both wereclear that one of the keys to successfulimplementation is ensuring that allsuppliers are of the highest quality. The

something that youshould try to assessduring the selectionprocess, throughdiscussion aboutyour own issues. Finally, ask yourselfthe question; canwe work with thesepeople? If theProject Manager has a personality clashwith the IT consultant, delays anddemotivation are inevitable. By havingthe key personalities meet each otherprior to appointing a supplier, thisconsideration can be taken into accountin choosing the right supplier.

Different projects better suitdifferent consultants

Do due diligence!


skill is in evaluating the quality of theindividuals that you will be working with.Without a doubt experience helps but anyfirm should ensure that they obtainreferences from previous customerengagements to get a feel for a supplier’simplementation record.

A full list of issues that should be coveredis available in the Guide “Choosing aneBusiness Vendor” on the CD. Here’s asummary in the meantime.

1. Assess Sector Expertise.

Has the company done work in yourindustry or target market? Have theyworked with any blue-chip clients orwith any of your competitors?

2. Talk to Current Clients.

Former clients can be a great source ofinformation. However, it is important to

note that no company will receive aglowing recommendation fromeverybody. You are merely trying to geta balanced perspective.

3. Identify the Key People.

Use your customer conversations to findout which people are particularly goodor bad in the vendor’s organisation. Youneed to be sure that these people will beavailable to you, and also that you canwork together.

4. Examine Relative Size.

Is your business going to be importantto the vendor? Is it big enough forthem to make money on? Is it too bigfor them to handle?

5. Check Financial/Operational Stability.

Look for publicly available financialaccounts. Ask about financial situation– profitability, cash flow, and liquidity.

6. Examine Strategic Goals of the Vendor.

Are these consistent with what thevendor is doing for you? Somevendors have hidden agendas that cantake on a life of their own as a projectmoves ahead. It is important tounderstand what you really want to doand not get sucked into what theywant to do.

7. Check the Vendor’s Vendors.

You should also check behind thevendor. The vendor will be reliant upon

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other suppliers. However rememberthat your due diligence should notbecome overly aggressive thus ruiningany prospect of a workable relationshipgoing forward!

8. Verify Contingency/Back-up

Arrangements.

What would happen if the individual(s)appointed by the vendor to work onyour project becomes ill or leaves thecompany? Check that there is a back-upplan in place and that you are satisfiedwith the plan.

Case Study -Connaught Electronics

Connaught Electronics (CEL) found thatselection of a third party vendor tosupply their Enterprise ResourcePlanning (ERP, Ref. Glossary) systemwas the most difficult task. BSM Ltd.their independent consultants, provideda structured method for selectingvendors. Together, CEL and BSM wrotean RFI (Request for Information)document and submitted it to 10 ERPsuppliers. CEL highlighted 3 out of the10 vendors to go onto the next phase.

In order to effectively evaluate each ofthe remaining 3 vendors, CEL preparedtest scripts and data to populate each of

the ERP systems. The purpose ofrunning these scripts would be toreplicate processes and data that mightbe generated in their own system. Fromthe results of these tests, CEL scoredvendors against set criteria and againstone another. The company brought inindividual departments to assess theirspecific requirements in each product.

After close scrutinisation, it was foundthat two ERP systems had scoredequally. As the potential investment wasa substantial €380K, rather than just killoff one of them, CEL looked to referees.Both vendors offered referee site visitsand a team of four CEL employeesperformed the assessments. Armed witha prepared questionnaire, theyinvestigated three reference sites.

The outcome of these assessments ledto the following conclusions:

• Both ERP systems failed to provide acomprehensive solution, withadditional packages required in orderto perform simple business processes.These ‘add-ons’ had to be integratedand maintained in addition to themain ERP system.

• Both ERP systems only provided thesame functionality as CEL’s existingMRP product.


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• Each company visited had made aserious IT investment. Although thecompanies were of a similar scale toCEL, their IT departments comprisedof four or five full time staff,compared to CEL’s one. One reasonfor these large IT departments was inorder to manage the integration andoperation of the ‘add-ons’ required.

CEL were surprised at these findings.Each of the very expensive ERPsystems were only, in reality,providing functionality for invoicingand goods receiving.

CEL needed a major rethink of theirstrategy. It was felt that investment ineither of these top of the range ERPsystems would be a poor spend for thecompany. There seemed to be littlepotential for the massive improvementsthey were looking for in the long term. Inaddition, CEL realised that they neededIT people to help assess and implementtheir strategy, but not to the scale thatthey had previously envisioned.

CEL called an internal meeting todiscuss these findings. They had alreadyspent time and money developing testscripts and evaluating a handful ofvendors and were keen to press on. Onenew avenue CEL decided to explore wasto revisit their existing manufacturingcontrol software provider, Manser Ltd.

One of CEL’s major customers wasknown to have integrated a bar codingsystem into their own Manser system.Bar-coding was a primary requirementset out in CEL’s eBusiness strategy. As a result, CEL called a meeting withManser in order to present theirchallenges. Several points were raisedon both sides. Manser highlighted aproblem with the way CEL hadmanaged the operation of their existingMRP system. At any one time, sixpeople would be operating the system,all of whom would contact Manser ifany problems arose.

There was no single point of contactfor Manser to deal with in addressingproblems. This communicationproblem, along with CEL having noERP/MRP IT expertise, was proving tobe a headache for Manser. CEL had, infact, been somewhat disorganised intheir relationship with Manser andtheir management of the existingMRP system.

CEL immediately set about designatinga single contact point for Manser andput in place a process for errorreporting. Moving on, CEL looked at thenew web based ERP system thatManser had developed. CEL began toperceive many benefits of having a ‘one-stop shop’ for their proposed ERP andbar coding/traceability systems:


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• minimal disruption to the business

• a lower cost product

• business processes could be refinedwithout the pressure of a new systemimplementation

• limit the management of interfacingtwo disparate products with onecompany being responsible for theintegration of the two systems

CEL contracted Manser to implement thenew web based ERP product and integratea comprehensive bar coding system.

Lessons Learned by Connaught

Electronics

• Write precise specifications for allprojects.

• Utilise reference sites when buyingproducts and services

• Get inhouse IT expertise to getimpartial advice on software systems

• Outside consultants don’t know yourbusiness and processes as well as youdo. Trust your own judgment anddon’t be persuaded to make decisionsbased purely on technology.

Pro-actively manage the relationship

Picking the right vendor is only part of theanswer. You then need to providesuppliers with clear requirements andwith the support they need to get the jobdone. Many of the companies thatimplemented eBusiness projects foundthat difficulties arose when it came tomanaging these relationships.


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IT suppliers’ perspective.

Life isn’t always easy for the consultanteither. Sensitivity to the problems facedby IT providers should lead to a betterrelationship, shorter implementationtime, and ultimately lower price tag.Here are some of the difficulties theyface in dealing with clients, particularlysmaller clients.

• Small companies often lack theexperience or expertise to properlyspecify the solution they require. As theproject progresses their understandinggrows and the specification changes.Naturally, this adds to the cost.Problems can arise when the suppliertries to pass these costs on.

• Where a client has not prepared atechnical specification, the vendormust, as part of the bidding process,put a lot of effort, at their ownexpense, into designing a set ofrecommendations. This can be asignificant burden as each vendortypically only wins a fraction of theprojects on which they bid. It isexacerbated by the practice, adoptedby some companies, of using thebidding process as a way of learningabout eBusiness and clarifying theirown thinking about what they aretrying to achieve. Some consultantsavoid bidding for small company

projects as they feel the cost ofbidding may not justify thecomparatively small revenue fromsuch projects.

• Clients frequently press for a clearanswer as to what the project is goingto cost. It is often not possible forvendors to give this, because the costdepends hugely on factors aboutwhich the supplier has insufficientinformation, such as the degree ofproblems within the customer’s backoffice system and the exact nature oftheir business processes.

• Many projects require a high level ofsupport from customer’s staff interms of providing information,signing off on proposals and decidingbetween different options proposedby the IT company. However, over-worked staff often fail to respondpromptly or adequately resulting inadditional costs for the vendor. Thiscan also cause project delays or faultsfor which the vendor can end upgetting blamed.

It is worth noting that many of the casestudy companies were very satisfiedwith the consultants that they workedwith. Reading the chapters on planningand implementation should help you toavoid some of the potential problemslisted above.


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In at least one case, the company gotinto severe difficulties because theconsultant went bankrupt. The questionarose as to who owned the half-developed software. In this instance, theissue had not been addressed in acontract, leaving the company with noprotection or apparent value from theexpense incurred.

Another company ended up in adispute with its web developer. Thecompany required changes to thewebsite however they couldn’t accessthe site and the web designer refusedto do the changes until the disputewas resolved. The company soughtadvice and the answer was that theright to access the site was dependenton the contract. This was of no use to

the company as there was nocontract in place.

This checklist representsitems that should be

kept in mind inyoureBusiness

Agreement.The detailedlist iscontained onthe CD, underthe“Choosing an

eBusinessVendor” Guide.

Short Guide: Choosing an

eBusiness Vendor

1. Go for shorter contract periods,with options to renew.

2. Define the number and specificskills of the vendor's employeeswho will be available to supportyour project and where they will be located.

3. Determine exactly what will bemeasured, precisely how it will bemeasured, who will measure it, andover what time period.

4. It is important to set reasonableperformance levels – minimum andtarget levels should be agreed.

5. Try to anticipate problems upfrontand create a timetable for thevendor to fix them.

6. As with any contract, it is vital toclearly define what gets paid, onwhat deliverables, over whattimeframe.

7. Clearly enumerate and describe allconditions for termination of thecontract.

8. Any contract should include allnormal legal protections(warranties,indemnities, andlimitation of liability). Your legaladvisor should ensure that you are covered in these areas.


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Implement a service levelagreement

A service level agreement (SLA) outlinesthe rights and obligations of both thecustomer and the service provider inmeasurable terms, and it states theconsequences if the eBusiness vendorfails to deliver on its guarantees.

An SLA should clearly define theresponsibilities of the vendor and specifythe required quality of service – inmeasurable terms. But defining thoseterms can be difficult. For example, aprovider may guarantee uptime of99.999%, but they may not count planneddowntime from maintenance or shortoutages, such as the 10 minutes it takesto reboot a machine. It is important tomake sure that an SLA guarantees theuptime for the entire infrastructure

involved in the application – hardware,software and network – and even theparts that the provider gets fromsubcontractors.

SLA terms vary according to the type ofagreement you have. There are at leastfour distinct types of SLA. Please refer tothe “How To” guide on “Choosing aneBusiness Vendor” on the CD for moreinformation on each.

• Network SLAs• Hosting SLAs• Application SLAs• Customer care/help desk SLAs

9. Conduct regular (at least monthly)vendor meetings to reviewperformance. If you are using anumber of vendors, get them allaround a table formally andregularly to ensure clearcommunication.

10. Determine fines, reimbursementsor other natural consequences ifthe provider doesn't meetservice levels.


One case study company negotiated adiscount with the suppliers, so that theydeveloped the software at a reduced rate,as it was feasible that they could sell thesolution into another organisation. Nowthere’s a good idea!

If you buy standard packaged software,then the issue of copyright usually doesn’tarise - it will belong to the supplier. If youengage a developer to build a system foryou, typically the copyright will rest withthe supplier (subject to restrictions overopen-source coding etc.)

If your solution is highly unique, thencopyright is likely to be less valuable toanyone else. No matter what, satisfyyourself that you’re happy with the situation.

Check who owns the Copyright

Do I know who owns the copyright?

Is the software appropriate for mycompetitors?

Is there another market for thesoftware?

Am I likely to want copyright forfuture developments?

A few copyright questions to consider

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Get More from Your InternetService Provider (ISP)

and Telecommunications Company (Telco)

There are various services offered by IrishInternet Service Providers and Telcos(telecommunications companies) and thesechange constantly; such is the dynamicaspect of the marketplace! It’s competitiveout there and with the introduction of ADSLfor some and satellite for many, our optionsare broadening by the day.

The key to driving the best deal is to beinformed about the marketplace (register

One final piece of advice:

Trust and fairness are key issues in any long-term relationship. At the outset, askyourself: can I trust the proposed vendor not to sell me unnecessary bells and whistles?Can I trust the independent consultant not to overcomplicate things in order tomaximise his or her fee earning days? If in doubt, pick someone else. This works bothways: you need to treat them fairly also.

for the Enterprise Ireland eBusiness ezine,which runs regular features on the latestoptions). The CD contains a “How To”guide “Choose Your Telecom Options”which outlines the varioustelecommunications possibilities. The“How to” guide on “Choosing an ISP” inthe CD outlines certain aspects of ISP-related terminology, technical backgroundand general service packages that youcan get up-to-speed on straight away.


Case Studies C&D FoodsCombiliftConnaught ElectronicsDigiSourceKenny’sPorterhouseSpeciality Print and DesignTecpro

How To Guides Choosing an ISPChoose Your Telecom OptionsChoosing an eBusiness Vendor


Involve Your Customers

and Trading Partners

63

5. Customers_TradingPartners 11/15/02 12:06 PM Page 1

Introduction

It is crucial to remember thateBusiness projects, unlike conventionalIT projects, will not just affect yourcompany. You also need to get theinput and approval of any affectedtrading partners i.e. customers andsuppliers, if you want to have asuccessful rollout. You may even needto integrate your new system withthose of your trading partners.

This chapter gives some guidelines tohelp ensure that cooperation withyour customers and suppliers goeswell. For a brief rundown of the keyadvice in this chapter, check out TheQuick Guide.

The Quick Guide

• Consult customers and suppliers early and often

• Consultation can have pitfalls

• Emphasise the customer benefits

• Understand your customers’capabilities...and be preparedto help upgrade them

• Customer eProcurementprojects may need verydifferent responses

• Avoid channel conflict

• Address security and legalconcerns

• Be sensitive to the internalpolitics of your tradingpartners

• Comply with accessibilitystandards

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Most small companies that wereinterviewed have close links with theircustomers and many of the businessesassumed they knew what the customerswould want from an eBusiness project.However, those who took the trouble toconsult customers often found that theiroriginal preconceptions as to what thecustomers would like were well wide ofthe mark.

Many customers were not looking fornew service elements such as web basedsales or order tracking but were seekingincreased reliability or improvements inthe efficiency of current processes.Having spoken to their customers,several companies refocused theireBusiness projects on improving internalprocesses. It is worthwhile consideringwhether eBusiness provides the bestsolution or whether more cost-effectivealternatives, based on process re-engineering, are appropriate.

When one Irish engineering companyproposed web based sales to their keycustomers, they discovered that the sizeand complexity of the orders meant thatcustomers valued the opportunity to sitdown with their suppliers and discuss theorder. This gave the customers the

reassurance that the order specificationand delivery dates were fully understood.They would not have been comfortableplacing complex orders over the web.

Some companies are reluctant toapproach their customers formally abouttheir needs, feeling that this may appearas an imposition on the customer’svaluable time. However, the experience ofthe case study companies suggests that ifyou approach your trading partners aboutyour planned eBusiness implementation,they will see you as pro-active and thevast majority will be happy to get

Consult customers and suppliers early and often

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expense of undertaking market researchon a global market. It may be nocoincidence that many Irish retailwebsites have yet to realise theirestimated sales levels, partly becausethey over-estimated the willingness ofconsumers to buy over the Internet.

Consultation with suppliers is equallyimportant in any project looking atdeveloping e-capabilities in the incomingsupply chain. Obviously a large customercan exert significant influence on smallsuppliers to ensure cooperation.However, smaller customers may have towork at winning supplier cooperation inmuch the same way as they work atgetting cooperation from customers.

While many case study companiesemphasised the importance ofconsultation, they also pointed out that itdoes have pitfalls.

Your regular contacts in the customermay not actually know what theircompany’s eBusiness needs andcapabilities will be in the future and maygive misleading advice. One Dublincompany was told by a major customerthat it was about to adopt a newelectronic purchasing systems that would

involved. Furthermore, they may alsoidentify additional system features thatcould improve your project and they willbe more likely to be committed to thenew system when it is rolled out.

As outlined in Chapter 2 (Develop aDetailed Plan), Lotus Automationdesigned a specific process to establishthe business requirements for itseBusiness implementation. The companywas careful to balance its own internalneeds with those of its key customers. ItsManaging Director went as far as visitingmany of the company’s customers to findout how they would like to do businesswith the company and put together acustomer ‘wish list’ from their requests.

Retail companies, which deal withconsumers rather than businesscustomers, found it most difficult tojudge customers’ needs because of the

Consultation can have pitfalls

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link directly to suppliers’ computers. Thiswould have necessitated significant ITinvestment by the Dublin supplier. Thatwas several years ago and the customeris still saying that it will introduce thenew purchasing system “soon”. Had thesupplier believed the advice they mighthave wasted a lot of time and effort.

Consulting only some of the interestedparties may give a misleading impression.Many companies producing technicalproducts interact with a variety ofdifferent players in order to achieve anyindividual sale. Kingspan, an Irish buildingproducts supplier, for example, interactwith building owners, investors,architects, consulting engineers andvarious building contractors.Prior to their eBusinessproject they carried outextensive marketresearch butconcentrated it on theupper levels of thecustomer hierarchy,where the degree oftechnologicalsophistication is veryhigh. Influenced also by

the rapid spread of ‘dotcom fever’, theyprovided an online ordering system to amarket that was undeveloped in IT terms.The customers at the bottom of thepyramid, at whom the system is aimed,have moved dramatically more slowly inIT terms than Kingspan had expected.

As illustrated in the learning story on thenext page, customers may welcome yourplans when the concept is first proposedto them, but may not be quite so happywhen they see its practical realisation.

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Learning Story

This is a true story, but the name and

product description have been concealed

to preserve the company’s anonymity.

One of Joe Bloggs Ltd key salestechniques is the use of special displayunits that are supplied to retail stores,where they are prominently positionedto exhibit the product. These units arelarge, expensive, occupy valuable spacein stores but are still too small todisplay Blogg’s full product range.

To overcome these problems, Bloggsdeveloped a ‘virtual showroom’ thatcould electronically display thecompany’s entire product range in eachretail outlet. It seemed like a win-windeal. The retailers could save space andBloggs Ltd could display all itsproducts. But when the project teamvisited retailers to demonstrate theprototype virtual showroom, they hadan uneasy feeling that the retailerswere unhappy and might not accept thenew system.

This was frustrating as Bloggs hadworked closely with the retailersthroughout the design, testing andimplementation stages. It had also beencareful to listen to its customers’ needsand adapt the design to meet thoseneeds. Despite this, the customers were

still unhappy. Were they just tooconservative to change? Would theproject ever succeed?

Fortunately, the Bloggs’ team waspersistent and had a good relationshipwith their customers. They decided tofind out why the retailers seemedunhappy and found two explanations:

• Customers were uncomfortable thatthe prototype system displayed theJoe Bloggs’ logo on the front screen.

• Customer staff were also afraid thatthey would not be able to handle thesystem. Not wanting to look foolishthey had kept quiet about these fearsbut not about their resistance to thenew system.

On the suggestion of one of theretailers, Bloggs customised the virtualshow room to display the logo of theretail outlet. It also decided to provideextensive training on operating the newsystem. The virtual showrooms havenow achieved widespread acceptance.

The moral of the story is:

• The task of consulting your customersand working to ensure theircooperation is a never-ending one.

• You may have to dig deep to find thereal answers.

• Always consider whether customerswill need training and support to useyour new IT systems.

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When planning an eBusiness project youmay well be thinking about the benefits toyour company rather than to the customer.

However, when undertaking consultationwith customers and suppliers it isimportant to emphasise the benefits thatwill be delivered to them. This is knownas the ‘What’s In It For Me?’ factor.Changing their way of working in orderto facilitate your eBusiness project caninvolve a lot of hassle for customers. Ifthey fail to grasp what they will get out ofthe eBusiness project, or do not value thestated project benefits, they are unlikelyto be supportive in providing informationor undertaking the training necessary to

developcompany/supplierand company/customer interfaces.

One Dublin basedmanufacturer had aconstant problem with

inaccurately specified requirements. Eachtime this happened the batch had to bescrapped as all products were custombuilt. With a written order it was clear whowas at fault. However, when the order hadbeen placed by phone, some customerswould deny having made a mistake, thusforcing the manufacturer to bear the costof a replacement batch. In conversationswith us the manufacturer had describedone of the anticipated benefits of hisproposed online ordering system as“stopping customers lying to me”.Obviously, they needed to find a moreconvincing argument to use when seekingcustomer buy-in.

It may even be necessary to modify yourplans to ensure that there is a clearbenefit for those from whom you areseeking cooperation. One potentialcustomer benefit of an eBusiness systemthat you might overlook is the ability tooffer additional reporting and analysis tothe customer. VLM, an Irish digital printer,is one company that offers this extrabenefit to its customers. They print housebrochures for the branch offices of largechains of estate agents. Customers aregiven online access to VLM managementinformation detailing what was spent byeach branch and on which products.

Emphasise the customer benefits

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Even if your project should, in theory,offer significant benefits to yourcustomers, it may not work if they do nothave the IT capability to cope with it attheir end.

It can be easy to overestimate yourcustomers IT capabilities. Kingspan, theCavan based manufacturer of claddingpanels was concerned that it would betechnologically leapfrogged by itscompetitors in the construction industry.These fears proved ungrounded,however. “We rushed in to try to keep outthe competition,” said Tom McGuinness,Commercial Director of Kingspan, “andwhen we got there, the competitionweren’t there. Neither were thecustomers”.

Quite a few companies found that theyhad to help their customers or distributorsto upgrade their capability. We havealready mentioned how Joe Blogg’s foundit necessary to provide training in the useof their virtual showroom to staff in theircustomer’s shops.

Having found that many customers werenot yet ready to use its new system,Kingspan also decided to take a proactive

approach to the matter. The approach theyadopted to one category of customers,namely structural steel contractors, wasto identify someone in the customer’scompany to liaise with a Kingspancustomer service person. This persontended to be a computer aided designeror an estimator/detailer, as they neededto understand both IT and theconstruction industry. Once selected, thisperson was trained, by Kingspan, in theuse of the system, in technical knowledgeof the Kingspan product range, and howto apply it to a building. They were alsoassigned a customer servicerepresentative to deal with any technicalor product related queries they mighthave. As a result the online orderingsystem has been rolled out to 45 ofKingspan’s 47 structural steel customersin Ireland.

Understand your customerscapabilities...and be prepared to

help upgrade them.

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Many large companies already operateeProcurement or electronic orderingsystems. Orders for parts needed toreplenish stock or to meet plannedproduction schedules are not placed byphone call or fax, but are sentelectronically. They are generated, not bya human supervisor, but by an electroniccontrol system that recognises that stocksneed to be topped up and alerts thesupplier accordingly.

While many organisations’ computersystems can detect the need to replenishstocks of components or of goods forresale, they cannot yet automaticallyrealise when a staff member needs anew desk or a ticket to New York. Suchorders still have to be initiated byhumans and for this reason, are oftenordered manually, even in organisationsthat order components electronically.That is changing. In an increasingnumber of large organisations, staff arenow obliged to initiate all purchaseorders by logging them on to thecomputer system. The computer thenchecks if the ordering department hasenough budget left, if the supplier is onthe list of approved suppliers etc beforeissuing a purchase order. Inevitably,more and more of the organisations that

Such efforts need to be tailored to thecustomer’s level of capability. Kingspanalso supply roofing and claddingcontractors. They tend to be lesstechnically advanced than Kingspan’sstructural steel customers and it was feltthat a different approach might beneeded. The project team has identified25 of the roofing and cladding contractorsto be part of a pilot project. Wherenecessary, Kingspan will provide themwith the necessary hardware andsoftware in order to access the system.

Vitra Tiles of Arklow also discoveredcustomers who needed training and/orwho had a fear of IT. Their responseincluded customer training, offeringdiscounts for online ordering and usingsales staff to help promote the IT systemto customers with whom the staffmember had good relationships. Fieldsales staff were trained to provide localtechnical support to customers. Accountmanagers helped overcome languageproblems encountered when trainingforeign customers. A case study of thiscompany will be available shortly on theEnterprise Ireland website.

VLM also gave training and MD, DeclanMalone gives a stern warning not tounderestimate the time needed to trainusers of the system.

Customer eProcurement projects mayneed very different responses.

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work this way, are going to want toautomate the last step of the process andto place all orders electronically.

At present, electronic ordering is mainlyconfined to transactions between largecommercial companies and their largersuppliers. However, this is also set tochange. The trend will move down thesupply chain as those who dealelectronically with their customers willincreasingly want to order electronicallyfrom their own suppliers. Government andnon-profit organisations such as hospitals,which have huge purchasing budgets, arealso moving towards electronic ordering.

For companies selling to such customers,often the choice will lie betweendeveloping the capability to acceptelectronically transmitted orders or losingtheir contracts. Naturally, suppliers wantto know what facilities they need to beable to cope with such electronic orderingsystems. The answer is that the type offacilities needed and the cost ofsupplying them can vary dramatically,depending on the customer’srequirements.

Dublin based Lake Communications, forexample, faced stringent requirementsfrom British Telecom (BT), one of itsmajor customers. What BT wanted, andhas now got, was a system that worksas follows:

• When BT receives an order from one ofits numerous small business or homeoffice customers for a Lake product,the BT sales person enters it onto acomputer.

• The order then passes electronically toLake and from there, goesautomatically to Lake’s subcontractmanufacturer and delivery company.

• This electronic message causesproduction schedules and deliveryplans to be updated automatically in allof these companies.

• The product is built to order anddelivered direct to the end user,without ever passing through a BTwarehouse or shop.

• All of the parties involved can track theprogress of any of any of the multipleindividual orders placed each day.

Solutions such as these not only requiresophisticated Internet related technologyto link the companies together, they alsorequire powerful and expensive internal

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IT capabilities to manage all aspects ofthe business.

Othercustomers

may be farlessdemanding

in theirelectronic

tradingrequirements.

One large Irishcustomer has

sophisticated computer-to-computer links with its larger

suppliers. However, its smallersuppliers only require Internet access so amember of staff can view the orderonline, print out the details and pass themon to the warehouse. Thus, smallsuppliers can trade electronically with thiscustomer even if their IT capabilities werelimited to a second-hand PC and atelephone line.

The natural assumption when you hearthat a key customer is moving towardselectronic purchasing is to start planningan IT upgrade to accommodate this.Unfortunately, this may not always be theright answer. eProcurement systems donot just save administration for thepurchaser; they also allow much bettermanagement controls. These controls willspell bad news for some suppliers. For

many years central purchasingdepartments in large organisations havetried to focus their buying power bygiving all their business to a relativelysmall number of approved suppliersfrom whom they try to negotiate everbigger discounts. They have beenfrustrated by the tendency for variousparts of the organisation to ignore thelist of approved suppliers and to buyinstead from small local suppliers whomay offer a faster and more flexibleservice than the distant large suppliersapproved by head office.

The new control facilities offered byeProcurement systems allow centralpurchasing departments to curb such“maverick” purchasing. If you are anunapproved supplier, developing thecapability of accepting electronic ordersfrom a customer who is pursuing aneProcurement strategy may not be thebest idea. You may be better advised tospend your time and money findingalternative customers. One option maybe to supply your current customerindirectly, by selling to one of theirapproved suppliers.

It is important to be able to meet, notjust the current requirements of yourcustomers, but also their likely futurerequirements over the planned life ofyour proposed new IT facilities. Hence,determining the likely future needs of

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current and potential customers shouldform part of the eBusiness strategyformulation process.

For some companies, meeting thespecified requirements of a small poolof primary customers is a key, or indeedthe main factor, in determining theeBusiness/IT strategy. If you are in thissituation, do not let the focus onmeeting the clients’ demands blind youto the possibility that additionalcapabilities may be worthwhile. You donot need to limit your system solely tothe needs of the major customer. Youshould also investigate what otherpossibilities a new system could offerother areas of your business such asimproved internal efficiencies.

Disintermediation was a key buzzword inthe early years of eBusiness. Essentially,it means cutting out the middleman andselling directly to customers. While thisfeature of eBusiness was initially hailedas a great advantage, in reality it doesnot always work in a company’s favour.Retailers and resellers often havepersonal relationships with customers,who are more likely to buy from themthan directly from the manufacturer.Freight costs for individual orders can beexpensive. Furthermore, for someproducts, distributors provide servicesthat cannot really be handled over theInternet, such as accepting trade-ins,demonstrating the product, installing orservicing it etc.

Most of the projects we have seen, farfrom cutting out the middleman, actuallymade life easier for those in thedistribution channel. Nonetheless, manyretailers, resellers, dealers anddistributors are very concerned thatsuppliers may try to bypass them andsell directly to the customer. When theyhear their suppliers talking aboutwebsites they start to wonder if theyrepresent the thin end of the wedge onthe road to eventual direct sales. Anumber of the case study companies put

Avoid channel conflict

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Case Study -Dubarry

Michael Walsh, Marketing Director,Dubarry, explains that his company wasanxious to avoid any channel conflict,particularly as its distributors wereconcerned that the company would sellacross their territories. In order todissipate the resistance from thedistributors, Dubarry decided not to sellinto markets already covered by itsdistributors. Customers could only buyonline from Dubarry if there was nolocal distributor or if the local distributordid not carry the style in question. Intheory this was the right way to go butthe question remained how would it beimplemented in practice?

Dubarry and Aró, its Galway-based webdevelopment company, realised fromthe outset that Dubarry needed a ‘smart’web-based product. They needed it tobehave differently depending on whowas using it. They recognised that the

nature of Dubarry’s channelrelationships was complex with thecompany making different footwearproducts and ranges available in

different territories.

The web site which waseventually created is organised

primarily according to geographic

some considerable thought into how toavoid this sort of troublesome channelconflict when they were implementingtheir eBusiness projects. We hear on thegrapevine that at least one Irish companydid not think enough about it and had totake urgent action to head off a potentialmajor dispute with their distributors.

Franz Caffrey, owner of Franz Design,says his company’s relationship with hisretailers has been his bread and butter. Itwas vital therefore that the web initiativewould not compete in any way with theexisting retail network. The companywent to great lengths to explain the non-competitive nature of the venture to all oftheir stockists. Franz personally visitedeach retail customer and explained thatretailers were given their own area onthe site to enabledomestic Irish shoppersto locate their nearestoutlet. Retail pricesalso remained morecompetitive, as Franzexplains, “Ifsomeone ordersonline from withinIreland, they willpay more after thecost of postageand packaging thanif they boughtlocally.”

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region. The first thing a visitor has to dois to identify where they’re from.

“A lot of people advised us against thatand said you should let people in gentlyand ask questions later. But we couldn’tfulfil that commitment to our distributorsnot to sell across their territories if wedidn’t ask people up front where theywere from. Having said that there’snothing to stop you not telling us whereyou’re from but you still can’t buy from a country which already hasrepresentation,” explains Walsh.

This policy means that the commercialexpectations of sales to end-users isrealistically low. “We don’t believe fora moment that we’re going to sell tensof thousands of shoes through this. Alot of it is referral – it’s to refer genuineenquiries to our existing network. Itwould be very easy to start trying tosell worldwide but our distributors arethe people who support us 365 days ayear, and if we become opportunistic interms of wanting to make a killing withdouble margins on a thousand pair ofshoes, we won’t have peoplesupporting us.”

While the company has committed tonot selling into markets where anexisting distributor is in place it isplanning to offer specific items, whichlocal distributors aren’t supplying.

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“If a distributor decides not to stock aproduct from the collection, we’re notgoing to deprive someone in Australia,for example, from buying it. This servestwo purposes, it motivates thedistributor to provide full representationof the range and equally it allows him togo to retailers and let them know thatthey won’t be listed on the web site as astockist of a particular item. If theretailer doesn’t stock a product it isn’tlisted as a supplier of that product. Thishasn’t happened yet but it’s the nextstep. That’s important to us because itgives us control. It means we knowwhat is happening in distribution.There’s a comfort factor initially fordistributors because we’re not cuttingacross their territory but we will if theydon’t perform.”

Address security and legal concerns

Building and maintaining trust andcredibility with your customers andbusiness partners is critical. As you allowtrading partners and IT contractorsaccess to your system and you haveaccess to theirs, security becomes acritical issue. Many people underestimateits importance until they are struck by avirus or until confidential informationends up in the wrong hands. It isimportant not only to be secure but alsoto be seen to be secure.


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If you plan on doing businessinternationally, you must understandthat the law protecting customerinformation differs between countries.You must find out what laws arerelevant to you and ensure that yourcompany complies. The box below setsout commonly accepted privacyprinciples and will aid you towardscompliance with the differentregulations at the local, national andinternational level.

Arising from a European Directive, newconsumer protection legislation will beenacted shortly, which could have

significant impact on some websites. Thedetails were not available at the time ofgoing to press. However, the “UsefulLinks” section of the CD can direct you tosites with the latest information.

Planning Security with your Partners

• If your trading partners entrust theirsensitive information to your care, youneed to demonstrate that you canretain confidentiality.

• If your trading partners depend on youravailability around the clock, availabilityshould be an important securityconcern. For example, if a virus bringsdown your network for an extendedperiod, what would the impact be?

• Customer and supplier reliance on theaccuracy of your data obliges you tohave good integrity controls on thatdata. Would you know if there was anunauthorised access attempt?

• For those operating in a market that issensitive to negative rumour, how abusiness reacts to a compromise ofsecurity can have a significant impacton mitigating negativity. By quicklyimplementing a good businesscontinuity management system, vitalconfidence can be maintained.

Common Privacy Principles

Notice: Customers must be informedhow an organisation intends to usetheir personal informationConsent: Customers should be givenan option how any personalinformation will be usedAccess: Customers should be allowedto correct personal informationSecurity: Organisations should havethe policies, procedures, andtechnologies to protect informationfrom improper disclosure, theft orcorruptionAccountability: Organisationsshould have privacy enforcement mechanisms


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We often tend to think of each customercompany as one homogeneous mass. Inreality, there can be many differentfactions within a customer who may havevery different views on your eBusinessplans. You need to be aware of thisdiversity of views and of any otherinternal customer issues that couldimpact on your project.

For example, one case study companywas engaged in streamlining the deliveryprocess to a major customer. Thecustomer’s management were delightedwith the project, as it seemed likely toyield cost savings by significantlyreducing the administrative workload ontheir Purchasing and LogisticsDepartment. The staff in the customer’sPurchasing Department were not quite sopleased as they feared it might maketheir jobs redundant. However, thesewere the very people whose fullcooperation was needed during theimplementation phase. You can imaginethe difficulties caused by such a situation. In another example, Basta Parsons, theSligo based manufacturer of ironmongeryencountered an unexpected objection to itsproposed online ordering system. Basta

Be sensitive to the internal politics of your trading partners

Comply with accessibility standards

Parsons found that its customers wereafraid that productivity would decrease ifInternet facilities were available to staff inthe retail stores. “One of our maincustomers wanted to avoid any access tothe Internet for their buyers,” explainedPeter Norton, Marketing Manager at BastaParsons. “They feared that their staff mightwaste time surfing sites they had nobusiness surfing during working hours.”

To allay those fears, Basta Parsons is innegotiation with the supplier to provide anautomated facility in which the retailer’scomputer, rather than its staff, interact withBasta’s IT system. This process would avoidstaff having to manually input orders andthus block access to the myriad temptationsof the Internet.

It is possible to design websites to makethem more accessible for people withdisabilities to use. Standards exist and insome cases these are legally binding. Werecommend that you work with yourconsultants to comply with these standards.


Case Studies-

• Basta Parsons • Kingspan • VLM• Dubarry • Lake Communications• Franz Design • Lotus Automation


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Introduction

No matter how brilliant your eBusinessproject idea is, it’s going to beextremely difficult to go ahead with it ifyour staff are not on board. Anysuccessful eBusiness implementationneeds the suggestions and support ofall employees right from the beginning.All the staff who will have to use thenew system must be adequatelytrained and staff involved heavily in theproject must be given sufficient time offthe “day job”. In this chapter, we’ll showyou the best ways of involving yourstaff and how to proceed if they arereluctant to contribute or resistant tochange. We’ll also find out how you canhave a more motivated and moreproductive workforce.

The Quick Guide

• Involve staff from the outset

• Ensure involvement from alldepartments, not just IT

• Training is crucial

• Address staff fears

• Avoid overworking staff

• Manage staff expectations

• Allow for staff turnover

• Consider how you will redeployfreed up staff

• Consider eWork as a positiveoption

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When you plan to implement aneBusiness project, it is vital to gain theinvolvement and input of staff in allareas of the company from the outset.Not only will this ensure a smoothimplementation with less resistancethroughout the company but the value ofthe project will be greatly increased if itincorporates suggestions from the shopfloor right through to the sales force. Thepeople who do specific jobs often knowbest how those jobs can be carried outmore efficiently.

Case Study -Kenny’s Book Export Company

Kenny’s in Galway hiredindependent consultants to addfocus to its eBusiness projectand to provide a very

structured process for requirementsidentification. The consultants involvedmany staff around the company andensured that the project wasn’t simply anexercise in making managementdecisions and communicating them asfaits accomplis. This style of processmanagement made staff focus theirthinking and identify fundamentalrequirements and issues through detailedanalysis of the current manual process.

Involve staff from the outset

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Kenny’s Learning:

Bring staff on-board early - a processthat is purely management driven isdoomed to failure. While themanagement team thinks itunderstands the requirements, itprobably doesn’t. Most managers donot physically do the jobs of otheremployees and therefore it’s usuallyunrealistic to expect the managementteam to know exactly what is involvedin the day-to-day tasks of the staff. Theprocess of managers working with stafffrom the outset also helps to alleviateany resistance employees may have tochanges implicit with theimplementation of a new system.

Generally speaking, external consultantsbrought into a company to formulate aneBusiness strategy begin the process byholding a training session in which theyteach management and selected staffabout eBusiness. This session isfollowed by a facilitating workshop.

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Ensure involvement from alldepartments, not just IT

there was a major product lineinstallation ongoing at the time we triedto run the project out of the admin office,in the mistaken view that it would beeasier to implement that way and thenroll out to the business. I put my handsup. I think that was a mistake.”

If the project team had been broadened toinclude representatives frommanufacturing, it would have been possibleto capture some of the business processimprovements in the production anddistribution functions at an earlier stage. Itwould also have enabled Terry to securebuy-in from the wider business to theproject and its aims. A broader and better-resourced project team would also havesecured a quicker implementation. A largeproject team may cost more in the shortrun but may save money in the long run ifthe project is concluded sooner. A projectmanager needs to be explicitly aware ofthis trade-off between cost and time.

There is a risk that “people” issues arisingfrom eBusiness driven changes could fallbetween two stools. Line managers mayassume that the eBusiness project team willhandle any such problems, as they relate tothe eBusiness project. On the other hand,the project team might well feel thatpersonnel issues are the responsibility ofthe line manager to which the particularstaff members report. Decide beforehandhow such issues should be handled andcommunicate this to all concerned.

Don’t let the IT department run theproject and then drop it on the company.As the implementation is going to affectthe whole organisation, everyone shouldbe aware of the objectives, the timescalesand the key milestones. This is vitalbecause input is usually required fromvarious company departments for projectmanagement, system definition, systemtesting, training, etc.

Terry Carr, the Finance Director at C&DFoods, admits that omitting to bring thewhole company on board from thebeginning was the single biggest mistakemade by his company. He said, “Because

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During this, the consultants set theagenda and ask probing questions in aneffort to get the staff of the company toidentify the issues and problems specificto that company which could be solvedor improved by the introduction of aneBusiness project.

The consultants then merge theirknowledge of IT and their experienceworking on similar projects in othercompanies with the contributions of thestaff in the facilitating workshop. All ofthis information will then be used to helpand advise the company in every stage ofits eBusiness implementation.

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Do make sure the entire company isaware of the timescale andobjectives of the project.

Do resource the project teamproperly.

Do establish a broad-based projectteam.

Don’t give sole ownership of theproject to your IT department.

Don’t pretend to consult your staff ifyou’ve already decided what yourplan is.

Do’s and Don’ts of Staff Involvement

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Training is crucial

of employee training is necessary. Trainingis also important because uninformedstaff working on new systems canaccidentally destroy information orexpose confidential data. As Jim Neary ofTecpro put it, letting untrained users looseon a computer system is “like letting amonkey loose with a machine gun”.Another problem with inadequate trainingis that staff may fail to embrace the newsystem, making it ineffective.

Training must be given the necessarypriority and it must be conductedproperly. One of the major lessonslearned by Lotus Automation was that itdidn’t get the structure right for trainingits staff, who were out on customer sites.The company now believes that it shouldhave got everyone together inhouse for adedicated training session on the newsystems and processes.

One consultant told us that whencompanies tried to save money byskimping on training, the extra cost, evenjust in terms of additional technicalsupport from his company, often farexceeded the “savings” on training.

Ideally, you should make sure that staffare given adequate time to learn the newsystem before you start to look formeasurable efficiencies. Implement athorough training programme to ensurethat all employees are comfortable withthe new system, understand it and acceptit. You could even follow the example of

When the new system is ready forimplementation, all staff who will beusing it will require training. It is vital thatthis training is conducted prior to rolloutso that the staff is up to speed on the newsystems and so that any glitches can beironed out. This can be a heavy burdenfor a small company focused on day-to-day issues and therefore careful planning

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one case study company, which offeredto pay the course fees for any staffmember who did an ECDL course(European Computer Driving Licence - ageneral computer users course) outsideof work hours.

User training is not the only type oftraining you need to consider. Beforeyour company even gets to theplanning stage of its eBusinessproject, it is also crucial thatmanagers and the core members ofthe Project team receive training inthe basics of IT and eBusiness, andin project management. Skills andknowledge acquired at this stage cansave considerable amounts of timeand money during the planning andimplementation stages of the project.

Furthermore, you also need toexamine whether those staff thatmight find their roles reduced oreliminated by the eventual eBusinessimplementation should be upskilled sothey can take an active role in the newcompany processes. For example, amember of staff could be trained as awebmaster or as an IT support technician.

It is also necessary to consider whichmembers of staff are loyal and likely toremain at the company for theforeseeable future. Measuresoft, forexample, found that its implementation

When an IT/eBusiness project is firstannounced, some staff may react positively,thinking “it is about time those skinflints inmanagement invested in a decent ITsystem”. Other staff, however, may have amore negative attitude. Employees oftenfear that eBusiness and associated changesin ways of working will be bad for thempersonally. Common fears are that their

was held back by the need to bring a newmember of staff up to speed. FergalCassidy of Measuresoft made the pointthat next time he would go out of his wayto redeploy an existing team memberwho has proven skills and is likely to staywith the company beyond the short term.

Address staff fears

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role will become redundant, that they willhave to do lots of boring extra datainputting, that processes will becomemuch more cumbersome and inflexible,or that management will be able to keep amuch closer eye on what they are doing.

The first step is to try and identify thesefears. Consider asking people how theyfeel about the plans. Then make a seriouseffort to address their concerns.

In some cases, the project can beredesigned to take account of these fears.One Dublin manufacturer anticipatedresistance to the introduction, for the firsttime, of computers on the shop floor.They decided to announce the shop floormodule of the project up front but toleave implementing it until the end of theoverall project. Management believedthat the passage of time would help staffget used to new ideas. Furthermore, the

shop floor workers often complainedabout the problems imposed on them byerrors and last minute changes made by“office staff”. Management was confidentthat the eBusiness project wouldsignificantly redress these problems. Theybelieved that as these benefits becameapparent to shop floor workers, it wouldbe easier to “sell” eBusiness to them.

Where fears are unfounded, the soonerthey are scotched the better. This iswhere good communications comes intoplay. This can take a variety of formatssuch as briefing sessions, memos onnotice boards or informal briefing ofwork teams by their supervisors. It isvital to fully brief supervisors andmanagers so they are not giving outcontradictory messages.

When communicating, it is important tobe careful about how things are phrased.If the project does not have negativeimplications for staff, be sure to avoiddescribing it in a way that might createunnecessary fears. Remember thatdifferent groups may have widely differingperceptions of the same terms or events.For instance, to management, “costsavings” are a highly desirable objectiveof an eBusiness project that will helpensure the company’s survival. To staff,“cost savings” may well be a phrase withnegative connotations. It could smack offailing to buy much needed equipment orof letting go temporary staff and dumpingtheir work on everyone else.

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Questions to ask in addressing staff fears

Are my staff fully aware of theobjectives of the plan?

Have I identified the concerns thatstaff may have?

Have I addressed these concerns?

Have I clearly communicated thebenefits to my staff?

Do my staff understand of theimportance of the project?

Are my staff aware of the KeyDeliverables?

Have we agreed on thecommitment required?

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One key fear that staff may have is thatthey will look foolish because they willbe unable to cope with the computers.This is particularly prevalent amongstolder or less well-educated staff whomay be afraid of being shown up byjunior but more computer literatecolleagues or even subordinates.

Training can help overcome this. Onemid-sized Dublin company ran a shortbasic general computer training coursefor non-computer literate staff. This wasfollowed by a ceremony where a VIPpresented completion certificates to allattendees. They did this at the start of amajor computerisation project, longbefore the system was built and beforethe staff would actually have to operate it.Later on, when the new system wasnearing completion, the same staffreceived detailed training relevant to thespecific systems they had to operate.

At least some companies haverearranged workloads andresponsibilities so that as much aspossible of the computerised tasks willbe handled by the staff who are mostopen to using computers.

Some companies have managed to enrichtheir staff members’ jobs as a result ofthe project. The Lake Communicationsproject which we described earlierintroduced an automated end-to-end

system, which dramatically reduced thenumber of manual repetitive operationscarried out between the company and itspartners. Lake says this has improvedhuman resource efficiencies and resultedin cost savings as its staff now enjoys amore productive workday. This has theknock-on effect of boosting staff moraleas they can now concentrate their effortson more rewarding tasks. If the same islikely to happen in your company, domake sure to put this point across to staff,obviously without overstating it.

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Avoid overworking staff

Planning and implementing an IT oreBusiness project demands a lot of timefrom IT and non-IT staff alike.

It may be necessary to hire extra staff,possibly temps. Ken Doyle of the AnthonyNicholas Group* was quite clear that anysuch new staff should not be assigned tothe eBusiness project, but should provideback-up support for the day job (backfill)so as to free up the experienced staffmember for the IT project.

Even with backfilling and soundplanning, the extra workload duringimplementation can put staff underserious stress. Key staff can end upgoing home late or working weekendsfor month after endless month. Considerhow to reward and recognise them. Onecompany did this, while also addressingthe staff retention issue, by promising abonus to those most heavily involved inthe project. However, this bonus wasonly payable if they stayed with thecompany until after the project wascompleted. The same company also hadparties to mark key milestones and hadspecial tee-shirts printed for key projectteam members. These measures maysound over the top but they worked.Employees we met were noticeablyproud to be involved in the project.

Manage staff expectations

Effective change management techniquesshould be used to ensure that employees’expectations of the new system arerealistic. Clearly communicate what thenew system will and won’t do. Oftenpeople assume that new IT systems willremove all their issues at work.

Remember also to choose a quiet time toimplement the new system. Mostcompanies reported a dip in productivityas staff got to grips with the newsystems. This is unavoidable but withhindsight, companies recommended notswitching on a new system at a critical

*Anthony Nicholas Group case study is not on the CD butwill be available shortly on the Enterprise Ireland website.

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point in the year, e.g. financial year-end,but during a quiet period where feasible.Similarly, the most intensive periods ofthe project should not coincide with busyperiods for the company.

Sometimes people need an incentive tomake the change from the old workingmethods to newer ones. Such anincentive can be either a carrot or a stick.Fergal Cassidy, Managing Director ofMeasuresoft, suggests promising all staffa reward upon the successfulimplementation and adaptation of aneBusiness project.

Another company used the “stick”approach. A project was undertaken tomove from using paper designs tocomputer-aided design (CAD). As anincentive to get people to use CAD, themanager moved the filing cabinetscontaining the paper designs to a distantpart of the office!

Several companies reported that staffwere reluctant to move from their oldsystems to new methods. They alsomentioned, however, that once the newsystems were in place and the initialinertia had been overcome, people beganto develop new ways of thinking whichgenerated new ideas aimed at increasingcompany efficiency.

Even a company in the best of health hasto endure a certain level of staff turnover.Employees can leave the company for allsorts of reasons and don’t always do soat a time that might suit you. This is whyit is vital to retain ownership of theproject and the associated documentationat the strategic level.

This was a key consideration for LotusAutomation because of the staff changesit experienced over the length of itseBusiness implementation. Althoughthere was some turnover in the internalproject team as people left the company,the structured approach taken by Lotusenabled the project leadership to change

Allow for staff turnover

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the project will have on their roles andjob security. It is vital that you cananswer such queries. If you do not haveclear and credible answers, staff willnaturally suspect the worst. You canscarcely expect staff to cooperateenthusiastically with the project theybelieve might make them redundant. Ifvaluable staff mistakenly believe theircurrent job is insecure, they could acceptjob offers from other companies.

A number of firms found they were ableto reduce headcount slightly as a resultof substantially improved efficiency. Ifyou do anticipate a reduction inheadcount, the sooner you take this intoconsideration in HR decisions the better.In the period leading up to the projectgoing live, staff who leave may be

When planning an eBusiness project, it isimportant to remember that staff resourcesmay be freed up by the eventualimplementation of the project. You need tobe clear about your plans for the staff whosework will, in future, be done by computer.This is important for decisions about staffdeployment, recruitment and training.

More importantly, staff will havelegitimate questions about the impact

Consider how you will redeployfreed up staff

hands and allowed the project tomaintain momentum despite the changesof personnel.

eBusiness experience makes staff veryemployable. The loss of key staff, such asproject manager or inhouse IT manager,can have a critical effect upon the projecttime scale. Expect a pause while thereplacement employee gets to grips withthe project. Kingspan suffered the loss ofkey members of staff from the ITdepartment during the rollout of itseBusiness project. The company foundthat the high demand for IT peoplerendered it extremely difficult to attractthem to the company’s rural base inKingscourt, Co. Cavan. Some forethoughtshould be given into contingencyplanning for staff leaving. How wouldyour business handle this issue?

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replaced by temporary staff or byredeployment from the areas which areabout to require lower staff numbers.

Other companies, although they did notreduce headcount, say their existingstaff now get more done as a result oftheir eBusiness implementations. Salesstaff relieved of the burden of formfilling and chasing information aboutorder status can spend more timeactually selling. Likewise, purchasingstaff can be freed up to seek out bettersuppliers, negotiate improved discountsor resolve long standing nigglingcomponent quality issues.

Connaught Electronics Ltd (CEL), as partof its eBusiness project, implemented astate of the art bar-coding andtraceability system. Once the bar codingsystem is fully activated, the number ofperson hours required to manuallyprogress raw materials and productsthrough production, will be greatlyreduced. This decrease in workload has atwofold benefit for CEL:

• this allows them to continue growingwithout a proportionate increase inoverheads.

• it allows staff to engage in more value -added activities within the operation.

eWorking is a way of using newtechnologies to enable work to be carriedout independent of location, with moderncommunications and informationtechnologies. eWork is not a job but amethod of working. Teleworking is anolder term, which usually referred toworking from home. With today’stechnology eWorkers can be anywhereyou want them to be - on the road, at acustomer premises, or at home.

eWorkers can even be in a differentcountry. One company, for example, usesproof readers in India so that workcontinues while its employees in Irelandare asleep. This contributes to increasedproductivity and reducing the cycle timesfor clients, as article preparation can beundertaken around the clock, due to thetime zone differences.

Consider eWork as a positive option

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Most eWorkers workfrom their homes inIreland. For example, a

member of staff at Dublin basedReprographic Systems requested that hebe able to eWork for the company, as hewanted to relocate to Wexford. Thecompany was eager to retain him, as hewas an experienced graphics operatorand a key member of staff who had beenwith Reprographic Systems for five years.

Until that point, it would not have beenpossible due to the technical constraintsof the systems being used in thecompany’s studio. An operator could only

get access to the software throughthe office network. Theintroduction of new technology byBarco Graphics (the designpackage being used by theorganisation) meant that thiscould become a reality and theoperator started working fromWexford. The system alsofacilitated the location of staffin key customer premises.

Frank Greene, TechnicalManager said that

Jobs that are suitable for eWorking

tend to have:

• a high degree of informationprocessing

• clearly defined or individual work • clear objectives and measurable

outputs• minimal requirements for supervision.

For example, professionals, businessmanagers, IT specialists, clerical supportworkers, customer service agents andsales workers all have jobs that can beeWorked. In general, eWorkers shouldspend at least one day a week in theoffice, and in fact the most populararrangement is one or twodays per week out of theoffice. Full time homeworkingis unusual.

The most common benefits of eWork are improvedproductivity, reduced costs,improved customer service,better use of facilities andsavings on infrastructural costs,improved staff retention and moresuccessful recruitment of workers,and improved changemanagement.

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“Knowing yourpeople” was oneof the vital lessonslearned byReprographicSystems from theintroduction ofeWorking. It wasimportant that theteam in the Dublinoffice had 100%trust in theoperator workingin Wexford.

“You need to thinkdifferently aboutthe type of personthat is - and youmust understandtheir strengths andweaknesses,” saidGreene.

Questions to ask yourself about the

eWorking option

Are there jobs in my company thatwould be suitable for eWorking?

Could my managers and staff copewith the challenges of eWorking?

Do any of my staff already workfrom home or offsite occasionally?

How effective has this proven formy company?

Are my IT staff willing to set up andsupport eWorkers?

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Case Studies C&D FoodsConnaught ElectronicsLake CommunicationsLotus AutomationKenny’s Book Export CompanyKingspanMeasuresoftReprographic Systems

How To Guide eWork

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Implement Your Plan;

Be Flexible and Persevere

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7. Implementation 11/15/02 12:13 PM Page 1

Introduction

Virtually all the companies in the researchfound the implementation phase highlydemanding. Almost invariably key stafffaced significant extra workloads over aprolonged period. Most companies facedunanticipated problems. For the unluckyor less organised companies, theseproblems were serious and in somecases led to projects being scaled back oreven abandoned. However, there werealso huge benefits derived at theimplementation stage when companiesreally got to grips with how certainbusiness processes were actuallyperformed. Many found new insights andadded value; not just to the eBusinessProject but to the business itself.

A key lesson is the need to stay on topof your plan: map out milestones andreview progress.

Before you embark on theimplementation of youreBusiness project, we wouldstrongly recommend that you read notonly this section but the full detailedcase studies in the Reference Guide atthe end of the section. These are easilyfound on the CD Rom. In themeantime, if time is of the essence,here’s the Quick Guide with all the keylearning points...

The Quick Guide

• Set out key milestones andregularly review progressagainst them

• Be prepared to change yourbusiness processes

• It takes time to review thehardware & software options

• Manage access to the systemscarefully

• Be flexible in your approach

• Test, test, test

• Involve and train your staffthroughout the process

• Work hard at communicating

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Once you have devised your overall plan,setting Key Milestones for theimplementation of the plan is essential.These should be defined clearly, be realisticand have a deadline for implementation.

It’s essential to stay on top of your planand this will require an ongoing reviewprocess. It’s vital that this is done on aregular, formal basis. Have a meeting atperiodic intervals, possibly fortnightly, atwhich all key players (internal staff and ITConsultants) and senior management arepresent. Review progress against the plan.Agree what additional tasks have to becompleted before the next meeting. Foreach task, set a completion date and assignone person to be responsible for makingsure it happens. Write this informationdown, circulate it to all concerned and thenreview it at the next meeting.

However, informal reviews will also ariseas the implementation progresses. Part ofthe review process will analyse key issuesthat need to be addressed. By formalisingthe process, these issues should beidentified at an early stage.

For example, Basta Parsons uncovered amajor problem during a review in thecourse of its eBusiness implementation.

The company had not yet completed thestandardisation of their internal productcoding or completed the revision oftheir product file. “Although we werecommitted to completing the site, muchof the information we needed to collaterequired input from several peopleacross our organisation,” warned PeterNorton, Marketing Manager. “As thesestaff members were not dedicatedresources, they had other priorities. Asthey were sparing only a couple ofhours whenever they could, we incurreddelays in getting product information”.As a result, the project rollout wasdelayed by five months.

Sometimes an issue which appears minorcan delay key milestones in your project if it is not dealt with. One example of thisis theregistering ofa domainname forPorterhouse.

Set out key milestones and regularlyreview progress against them

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Porterhouse, the Irish weaving companyinitially registered four domain names. Thecompany had already registeredPorterhouse.ie but decided not to use thisfor the website. The brand “Weave of theIrish” had already been promoted in theUS and was well established there so aftermuch discussion it was decided to use thisone for the URL (Uniform ResourceLocator) or address of the website.

This domain name had initially beenregistered with a UK company calledActive ISP and it was necessary to have it‘pointed’ to the ISP (Internet ServiceProvider) in Newry, a task that seemedeasy but which ended up taking a lot oftime and causing delays. The emailfacility was also affected during this time.

By regularly reviewing progress, youcan identify these kinds of stumblingblocks and deal with them before theydeal with you!

working might not have been feasiblewithout computerisation. For example,Lake Communications moved fromproducing relatively large batches forstock to producing to order and shippinglarge numbers of individual productsdirect to numerous end users. This meanta huge increase in the number ofindividual orders to be processed and areduction in the lead-time for handlingthem. It would have been a nightmare totry and manage this using semi-manualorder entry and scheduling. Hence, theeBusiness project was a prerequisite forthe new streamlined delivery process.

Sigma Wireless also ensured theytransformed their internal processes and“got their house in order” prior todeveloping the new technologyinfrastructure. It’s a clear example of howthe delivery of an eBusiness projectextends well beyond changing technologyand should be part of a broaderfundamental business transformation.

You can often achieve reasonable benefitsby taking your existing way of workingand computerising it. However, thosecompanies which achieved the greatestbenefits tended to be those whosimultaneously improved the way theyworked and computerised that new wayof working. Often, the new way of

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Be prepared to change your physical processes


An eBusiness/IT project forces you todescribe your current processes in greatdetail to the IT people. As you do so, itmay become increasingly clear that, overtime, you have built up a way of workingthat is sub-optimal. If you automate thecurrent sub-optimal approach you are, toan extent, locking yourself into it. Youtherefore need to think about whether toimprove processes as part of the overallproject. Obviously this is likely to add tothe project’s workload and lead-time.

Business Process Improvements

The Japanese automotive industry givesa clear example of how business processimprovements can give long lastingcompetitive advantage. The Japanese hadno indigenous raw materials, a relativelyhigh cost base, brand names thatWesterners had never heard of, notechnological advantage, and to crown itall were on the far side of the world.Japanese goods were generallyconsidered to be cheap, cheerful andshoddy. Yet, throughout the 80’s,Japanese cars and trucks made seriousinroads into western markets.

The Japanese success was founded onthe superiority of their businessprocesses. The Japanese openlyexplained topics such as “Just in Time”and “Lean Manufacturing” to countlessvisiting western delegations. Despite thiswhen the European and Americancarmakers attempted to apply the samesystems and procedures, they found thatyou couldn’t transform businessprocesses overnight. In fact, it took years.In the meantime of course, the Japanesecontinued to relentlessly improve theirown processes.

Small Irish companies may face a similarthreat. If you delay taking action until yourcompetition has already started to reapsubstantial benefits from long termimprovements to their physical or electronicbusiness processes, it may be too late.

Unforeseen benefits

Basta Parsons, a manufacturer ofironmongery, encountered delaysbecause they had to get their product filein order. Peter Norton, the MarketingManager, felt that even though this was anuisance at the time, sorting out theproduct file was worth doing, even if theynever implemented an eBusiness project.Hence the project forced them to do avaluable “house-keeping” job.

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Many Irish Small to Medium SizedEnterprises (SMEs) have successfullyadopted some of the Japanese ideas. Someof them did so with the help of EnterpriseIreland’s World Class Business (previouslyWorld Class Manufacturing) programme.You can read about their experiences, andabout the Japanese techniques, in “AnIntroduction to World Class Manufacturing”,R Keegan, Oak Tree Press

Business process improvements are notjust applicable to the manufacturing shopfloor. At one time, financial institutionscould take a month or more to approve aloan. Now a loan can be approved duringthe course of a single phone call. This hasbeen achieved by radical processredesign combined with associated ITimprovements. Hammer and Champy’s“Reengineering the Corporation” offersadvice on how other companies canachieve similar radical improvements.

Process Improvement Guidelines

If you are too busy to read books aboutimproving business processes, here aresome some basic guidelines.

• Business Process improvement workshould be a permanent undertaking.Set up mechanisms to encouragepeople to continuously address it.

• Consider also having an intensiveprogramme, lasting for say 6 - 24months.

• Consider taking on outside help, atleast to kick-start the process.

• Create a culture which encouragescontinuous improvement

• Gather facts before making decisions.Various tools can facilitate this, suchas benchmarking, process flowdiagrams, logging the causes ofdefects etc.

• Train staff in data gatheringtechniques and team-basedstructured approaches

• Emphasise cross-functional projects.They are often far more effective thanthose involving only one Department.

• Consider IT/eBusiness projects intandem with physical processimprovements. Make sure yourprocess improvement people knowenough about IT to understand whereit can facilitate process improvementsand vice versa.


Choosing the right software will take timeand effort, probably more than youbargain for! However, the choices madeat this point will often be fundamental tothe success of the entire programme. Itwill also have an impact on the actualspend incurred on the project (which canbe hard to identify at the outset).

Lotus Automation ended up having sevenmini-projects after researching the rightsolution for each element of theimplementation. In the end, the costsbroke down as follows:

• Hardware 30%-40%

• Software & Project Management 60%-70%

Here we outline what these projects were,with a detailed look at the initial one -choosing the new server and LAN. If yourefer to the full case study on the CD,you’ll find a detailed outline of each ofthe 7 elements, with costs. It makes veryinteresting reading.

It takes time to review thehardware & software options

Case Study - Lotus Automation

In order to find the best possiblesolution for each of the requiredcomponents, Lotus conducted anexploratory exercise to comparedifferent options. The choices they hadto consider were buying an off-the-shelf package or developing a solutioninternally. If a package was decided tobe the way forward, then they had todecide which represented the best fitand value. These choices had to bemade against a background of finite ITresources and budget. It was a realchallenge to the management team tomake the best decision in each case.

To all intents and purposes, eachcomponent of infrastructurerepresented a mini-project in itself,both in the decision-making andimplementation. These components/projects were as follows:

• New server & LAN• Human Resources• Payroll• Document Control and Quality

Standards• Remote access to the Lotus network• Web-Based Timesheets• File Transfer Protocol (FTP)

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New Server & LAN

The basic problem was one ofinstability. The average uptime for theLocal Area Network (LAN) was only75%. The reasons were as follows:

• Network wiring and hardware verypoor quality

• No UPS protection, frequent crashesdue to power failures

• Too many users

• One server doing all the work

• No standard PC and laptop buildhence more maintenance issues

• No patch panels

• No documentation wiring diagrams etc

• No web capabilities

Additionally, there was a problem with alack of redundancy on the existing server:

• No redundant hard drives

• No proper back-up solution

• No redundant power supplies

• All data located on one server

The solution was a completereplacement of the LAN. The methodchosen was as follows:

• Implementation of patch panels

• Replacement of network hardware,hubs, wiring, sockets and patch leads

• Complete UPS protection for LANequipment

• Proper network documentation anddrawings

• Replacement of server with newserver with complete redundancy

• Implementation of second LANserver for HR, Accounts, Payroll andBackups

• Implementation of proper backupsolution

• Upgrading of network to Windows2000

The server was upgraded to SmallBusiness Server 2000, which offeredthe following benefits:

• Completely based on Windows 2000Server

• Web based operating system

• Increased security with ISA 2000(Internet Security Acceleration &Server)

• Virtual Private Networking included

• More secure remote access

• Web-based E-Mail access

• Ready for leased line

• Windows 2000 increased uptime

• Quicker recovery from disaster


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The cost of the solution broke down roughly as follows:

• Dell Poweredge 2400 PDC €6,600

• Dell Precision 410 SAS €3,300

• Backup solution including software €1,500

• Software including licenses €2,500

• Replacement of hubs €1,300

• Dial-up ISDN line install €320

• Replacement of wiring and sockets €650

• UPS protection €1,080

• Network print servers + printers €1,800

Total €19,050

Manage access to the systems carefully

One company described how, when theyfirst networked their systems, they failedto provide adequate training or controls.Sales staff would look up informationabout their clients’ orders or invoices andinadvertently delete these records. Toprevent this type of problem, most ITsystems build rules into the software thatprovide different levels of access todifferent users. The company shouldclearly define what these rules are.

These rules control what data each usercan see and what data they can alter.Sales staff, for example, might be allowedto enter an order, but only to viewinformation about their clients’ invoicesor payments. They would not be allowedeither view or alter HR records.

These access control systems aregenerally based on passwords. They onlywork if people keep their passwords


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secret and all too often they don’t! As inmany other aspects of eBusiness and IT,setting down procedures and thenensuring that they are observed is criticalto the success of access control.

Access control systems and disciplinesare obviously important during normaloperation. However, people sometimestend to forget that they are alsonecessary during IT projectimplementation. At such times peopleare under pressure and may be temptedto take short cuts. Matters are alsocomplicated by changing systems andby the need to accommodate not onlythe normal users, but also ITcontractors and internal members ofthe IT project team.

It is important to ensure that suchpressures do not cause lapses in securityprocedures. Imagine the problems thatwould arise, for example, if while testinga B2B website you inadvertently allowedone customer to see details of anothercustomer’s transactions. Many companiesoffer different discounts to different B2Bcustomers and allowing a less favouredcustomer to see the net prices charged tosome of their competitors could causethe end of a long-term relationship.

The “How To” Guide on Security on theCD Rom covers this issue in greater detail.

Be flexible in your approach

Many companies found that they had tochange plans part way through theprocess. Various factors drove thesechanges. In some cases, as described inlater chapters, they realised that whatthey were building for their customerswas not really what the customer wanted.In quite a few cases, once the eBusinessproject started to kick in, they realisedthat their existing networks and/or back


Learning Story: Changing Strategy in

Mid-Plan

A leading Irish manufacturer ofbuilding products decided to stayahead of its competitors by introducinga computerised order scheduling andtracking system. An inhouse projectteam was formed, including thefinancial controller, financial directorand managing director. The teamdecided that the required systemwould be created by upgrading and

integrating the established IT systemswithin the company. Consultants werehired to handle different aspects of thedesign and implementation of the newsystem and an internal projectmanager was appointed whoimmediately embarked on an

intensive IT training course.

The project hit many problems andthe cost and time commitment of theproject manager and project teamwas increasing rapidly. The teamdecided to review their overallapproach to the project.

They concluded that the original plan ofadapting and building on the existing ITsystem had been a mistake. The systemwas simply too outdated and inefficientcompared with more recent systems.They took the brave step of deciding toscrap all the work done to date andstart afresh with a completely newsystem. This is now runningsuccessfully.

Incidentally, the newly IT trained projectmanager played a role in helping themrecognize the problem and the need tocompletely change their approach. Thiswas certainly one case where trainingpaid off.

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office software was no longer able tocope and had to be

upgraded.

For manymanagers

unfamiliar witheBusiness, implementingtheir projects provided alearning process that helpedthem understand new waysin which they could use eBusiness totheir company’s advantage. Theseinsights led them to change their plans.Some faced weaker than expected marketconditions and decided that they neededto cut back on all forms of capital spend.


Test, test, test

Dublin based Blarney Stone operates asuccessful consumer website. However,during its early forays into online sales,the company failed to realise theimportance of testing. As Declan Fearon,the company’s co-owner explained:“During the first year no sales werereceived from the site. We discovered thatthe buy online feature was deficient andwhen we tried to purchase the functiondidn’t actually work”.

Testing needs to be built into theimplementation programme throughoutits duration. At the outset, variouspotential software solutions may betested as part of the selection process.During the implementation, testing ofeach stage will be required.

Test each stage of the implementationwhere possible, rather than delay fulltesting until the pre-launch period. Where

the systemcannot befully testedprior tolaunch (e.g.wheresystemsintegrationissuesarise), thena test

environment which replicates the livesituation should be created if possible.

Ken Doyle, Financial Controller of theAnthony Nicholas Group emphasised thattesting has to be carried out by someonewho is very familiar with all the company’sprocesses. As most standard softwarepackages nowadays do the basic job well,the errors that do arise relate mainly tochanges made to accommodate ways ofworking that are unique to the particularclient. Only a longstanding staff member islikely to realise, for example, that thesoftware is calculating sales discounts in away that differs from the agreements inplace with certain customers.

If you do testing with staff who will beusing the system once implemented, makesure they are not brought in too early in theprocess. If too many bugs are found, it maycause difficulty later in user acceptance.

Another consideration when testing thesystem, is to ensure that a “fresh pair ofeyes” are involved. Inevitably, thoseinvolved in the project will be blind tocertain issues.

Ideally, customers should also be involvedin testing the system before the go-livedate, if they are expected to use it. This canreveal difficulties that otherwise would notbe identified. Porterhouse, a premier Irish

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weavingcompany,believes that itshould haveput morethought intothe usernames for theshopping

basket facility. These contained O’s (theletter O) which users assumed were 0’s(zeros) and keyed incorrectly. This causedmuch confusion until Porterhouse pointedit out in one of its mailshots. However,more thorough testing by customersmight have identified the problem pre-implementation.

Parallel running of the old and newsystems is another form of testing.Anthony Nicholas decided to run theirnew back office IT system in parallel withthe old system for a month. This meantthat every time a piece of data, such as anew order, was keyed into the old system,it also had to be manually entered into thenew one as well. They coped with thisextra workload by hiring temporary staff.The decision to run in parallel arose fromtheir experience of implementing a newback office IT system in the early 1990s.Despite all the testing at earlier stages,this process also threw up bugs in thenew system that had to be resolvedbefore the old IT system could beswitched off for good. They believe thediscovery of these bugs vindicated their

decision to run in parallel.However, not everyone who moves to anew upgraded back office IT system runssystems in parallel. Some switch overcompletely during one weekend and keeptheir fingers crossed. Many get away withit. But as one staff member from theaccounts section of a large Dublin-based ITcompany put it: “We would not admit thatthe plant shut down for two weeks after wewent live. However, if you look at ourinvoices, not one of them relates toproducts shipped during those two weeks”.

Involve and train your staffthroughout the process

Inevitably, the successful implementationof an eBusiness project will depend onthe commitment of the employees. Staffshould be involved in a variety of waysduring implementation and Chapter 6addresses this issue in full.

Work hard at communicating

One of the specific reasons Dubarry, thefootwear manufacturer cited for selectinga consultant was: “It was evident from anearly stage that we’d met with someonewho understood us”. If you read throughthe case studies, a similar theme keepsrecurring. A consultant’s willingness tolisten and their ability to understand theclient’s needs was often a key factor in


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selection decisions. While the casestudies have been toned downsomewhat to avoid giving offence, somecompanies were highly critical off therecord of IT consultants who “just didnot listen to us”.

In any significant project, goodcommunications is vital. You want toavoid ending up hearing statements suchas “Oh, I thought Johnny was doing that”or “I know you must have put a lot ofwork into this, but it isn’t actually whatwe wanted”. You must work at ensuringeverybody is clear on exactly what theyhave to do.

In an IT project, matters are complicatedby the variety of different groups involvedin the project. These includemanagement, users, IT staff and externalconsultants. Each of these groups tendsto speak their own “language” and tolook at things in their own way. They cantake certain things for granted withoutconsidering that these may not beobvious to people from the other groups.

In an eBusiness project you may alsohave to contend not only with your ownusers, management and IT people butalso with those in your customers’ andsuppliers’ companies.

It may, for example, be blindinglyobvious to you that staff will often haveto deviate from the standard operatingprocedures when handling urgent orders.However, this may not be at all obviousto the IT people, and if you don’t spell itout clearly, you may end up with asystem that cannot cope with urgentorders. A good IT consultant will beaware that users do not always spellthings out and will ask probing questions.However, as a user you should not relyon this. Not all IT people are good atcommunicating and even the best canhave an off day.

Equally, you need to work at ensuringyou fully understand what the IT peopleare proposing and in particular that youfully understand the implications oftheir suggestions.

Available on the attached CDHow To Guide Security

Case Studies Basta ParsonsBlarney StoneDubarryLake CommunicationsLotus AutomationPorterhouseSigma


Maintain Focus

After Implementation

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8. Maintain Focus 11/15/02 12:14 PM Page 1

Introduction

Once your eBusiness project has beenimplemented, there’s a temptation to sitback, relax and wait for the benefits toroll in! However now’s the time to bevigilant; if you don’t stay on top of theprogramme, all your hard work couldbe wasted.

This chapter is designed to help youkeep up the momentum so that youdrive out the full benefits of yourproject. There are a number of areas toaddress; from the need to put keydisciplines in place through to the pro-active marketing of your eBusinesscapabilities. If you’re too busy rightnow to read the whole Chapter, gothrough the Quick Guide for a summaryof the main points.

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The Quick Guide

• Devise new work practiceguidelines

• Consider maintenancerequirements at the outset

• Have a disaster recovery plan

• Keep your site fresh

• Build it and they will not come

• Use your site to gather marketintelligence

• Plan for future growth

• Delivery of your eBusinessproject is a new beginning, notan end


When you have put a new system in place,new work practices will have to beadopted. Training, an essential element ofthis adoption process, is dealt with fully inChapter 6 “Bring Your Staff With You”.However, prior to training, these newprocedures need to be identified anddocumented so that staff are crystal clearon what is expected of them. An IT projectcould typically stimulate new proceduressuch as those outlined in the box below.

Appoint Person(s) to be Responsible for

the Guidelines

Once the new practices are agreed anddocumented, an employee, or a numberof employees, need to be responsible forensuring that they are adhered to on anongoing basis. This responsibility shouldbe clearly agreed by all parties. It mayrequire additional resource or it may formpart of the responsibilities of an existingmember of staff.

Facilitate Ongoing Training

As new staff join the company or transferbetween departments, there will be anongoing need to maintain training and tokeep the guidelines up-to-date. Trainingmay done by the IT Department, althoughoften on-the-job training, supervised byother members of staff and supported bythe written guidelines, is more appropriate.

Maintenance is required for both thehardware (PCs, laptops, network serversetc) and also the software packages thatyou have deployed. It’s likely thatdifferent people will maintain these twoelements as entirely different skills arerequired. It’s also likely that you will beable to undertake a certain level of

Devise new work practice guidelines

Consider maintenance requirementsat the outset

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Logon requirements for the systemManagement of passwords; usage,additions and deletions etc.Data entry of all required data priorto processingVirus protection updates andfrequencyVirus policy e.g. do not openattachments unless sender is known etc.Software installation policyEmail usage policyGuidelines on domestic use oflaptopsSafe storage of mobile devices e.g.phones, laptops etcBack-up of all data; frequency andlocation

✓✓

✓

✓

✓

✓✓✓

✓

✓

Potential Procedure Changes


maintenance inhouse while outsourcingthe requirements that are outside theskillset of employees. There’s a balance tobe struck here as obviously if you canretain the maintenance inhouse, responselevels to problems are likely to be betterthan response rates from an externalsupplier. On the other hand, you need toconsider costs and each business needsto find the right solution for their needs.

Whether your maintenance function isinternal or outsourced you will still faceone key question: what level of serviceam I prepared to pay for? Do I, forexample, need immediate technicalsupport 24 hours a day or would I prefera cheaper alternative?

When Franz Caffrey, owner of FranzDesign, developed the company’s site,they planned for future changes to thesite. “The site was designed in order forany changes required to be propagated

Although the companies involved in theAcceleration Fund did not have a disaster(well not one that they are willing toshare!), it is worth asking yourself thequestion; if a fire burnt your premises

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“Don’t answer that. It’ll be one of those

whinging users.”

throughout the site,” explained KeithO’Loughlin, their eCommerce adviser, “Ifthe logo needs updating for example, itcan be changed in one place and thechanges will be automatically reflectedacross the rest of the site”.

The site was also designed so that itcould be easily expanded or changed inthe future. “If Franz decides to scaleoperations and put 200 instead of 40products on his site, we can easily add inadditional functionality such as searchengines and hierarchical catalogues,”remarked Keith. (A hierarchical catalogueis a method of organising items into highlevel groups and then sub-groups undereach high level category).

At Butlers Chocolates, Michelle McBride,the Retail Sales Manager, recommendsthat companies look out for hidden costs.“as we still have no web related IT skillswe had to take an additional maintenanceagreement out to manage the site. Makesure you know who is going to be lookingafter the site once it’s built”.

Have a disaster recovery plan


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down tonight, could your businesscontinue in the morning? To a large extentthis is entirely dependant on whether ornot you have put a back-up plan in place.This will involve both a plan for backing-up the information on your systems - it’svital that back-up files/discs are kept off-site - and for managing staff should thesituation arise. Think of it as an insurancepolicy; one well worth having!

The content management objective ofyour site will depend on the targetmarket; if it is available openly on theinternet for consumers then yourrequirements will be totally differentfrom a site which is designed for use bykey distributors, for example.

Consumer sites need to be updatedconstantly to engage the visitor - think ofit as a shop window; if it doesn’t change,there’s no incentive to step inside. Thereare three basic ways of keeping your siteup-to-date; do it yourself inhouse, pay aprovider to do it or buy extra contentmodules on the internet, whichautomatically update e.g. weather/localnews etc.

Some disaster recovery questions

to ponder

If a fire burnt the premises down ...........

Where would my business operatefrom?

How would I access informationheld on the system?

Would the information saved beup-to-date?

How would I co-ordinate employeedeployment?

Could I maintain service for my keycustomers?

How long would it take to be up-and-running again?

Q

Q

Q

Q

Q

Q

Keep your site fresh


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There’s not much point in opening a shopwithout a door. So if you’ve built anonline store, you need to show peoplethe way in. A common mistake in Irishbusiness is the failure to plan formarketing and promotional costs, once asite is live. This can take a substantialchunk of your budget however if theeBusiness project is considered aworthwhile strategic investment, then itmust be worth promoting!

There are many different ways ofmarketing a site. Some examples aresummarised in the box below and a morecomprehensive description is given in“Promoting your online Presence” whichyou can find in the “How to Guide”section of the CD.

Possible options for promoting

your website.

• Putting the website address on yourstationery, yellow page entries etc.

• Visiting your most importantcustomers and showing them how touse the site.

• Sending a mailshot to existingcustomers.

• Advertising on television, radio,newspapers or trade press.

• Working to get a favourable positionon search engine listings.

• E-zines (electronic magazines). • Getting other sites to give hyper

links to your site. • Various other electronic

advertising and promotion techniques

As with any marketing campaign, youneed to ask yourself what message youare trying to communicate, to what targetaudience and how much time and effortyou are willing or able to spend on

Build it and they will not come

For Business to Business (B2B) sites,other issues are at stake. It may benecessary to implement your distributorsbranding on your site, for example, andfresh content may relate to updating yourproduct range, with stock levels etc.Ideally this would be automated.

If it’s important to know who’s on yoursite and how they are using it, you canuse technology not only to count click-throughs but also to track the movementsof visitors on your site.

In both Business to Consumer (B2C) andBusiness to Business (B2B) sites, it’s vitalthat the information is not out of date, soit’s useful to appoint someone at yourorganisation to be responsible for this -whether content management isautomated, done inhouse or outsourced.


Case Study - Blarney Stone

By implementing hiseBusiness project,Declan Fearon, the co-

owner of Blarney Stone, has amassed agreat deal of experience in thedevelopment, launch and promotion ofcommercial websites. He advises thatcompanies should only sell products toexisting customer bases. Don’t try andcreate a market - use one that is alreadythriving. Otherwise before you makeany sales, your marketing costs willescalate. Many companies haveinsufficient depth in their productranges to attract a global audience. If itis not a known brand, you already haveyour work cut out.

Blarney Stone had planned to usetraffic from www.localireland.com andhad signed a revenue sharing deal withNua, who ran the site. When Nua wentinto liquidation, the company decidedto do their own marketing, on their sitewww.buyfromireland.com.

Despite this success, Declanrecommends that if you do have alimited customer base and a smallproduct range, it is worth consideringusing another internet channel to sellyour products, rather than investing in

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communicating that message. Only whenyou have answered these questionshould you make any decisions about themix of techniques you will use.

A company supplying local consumersmight adopt a very different approach tothose targeting widely dispersedconsumers and they in turn would bedifferent to a B2B site which did most of itsbusiness with a handful of key customers.

Remember that sites are often targeted atmultiple audiences e.g. you want yourdealers to use it to cut your paperwork butyou also want end users to find it so thatthey will contact your dealers. Each ofthese target audiences may require adifferent marketing approach. There aremany marketing options and you canspend a little or a lot.

Before preparing any promotionalmaterial don’t forget to think throughwhat arguments you will employ toconvince customers to use the site.


money to build your own site. Buildinga fully functional site that operates as asuccessful sales tool for your businessis a costly and time consumingexercise. Piggy backing onto an existingpopular web store vastly reduces theseoverheads. (Note piggy backing willusually involve some form of revenuesharing scheme, coupled with lessfreedom to alter the look of your site).

Webbusters conducted an in-depthenvironmental analysis for BlarneyStone, examining the giftwaremarketplace from both a local andglobal perspective. Key competitorswere also scrutinised, along with theirstrategies and activity in the onlineenvironment. This provided a crucialbase going forward for the formulationof an effective eMarketing strategy.Using an in house method to measurethe visibility of the web site across themajor search engines and directories,the site was modified in order toprovide a high rank with popular searchengines such as Google.com andYahoo.com.

Blarney Stone also invested in banneradvertising with Ireland.com and hasprofited from a steady stream ofinterest. For the last week in September2001, buyfromireland.com received545,700 page impressions.

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Use your site to gather market intelligence

The reach of the Internet and the way it isshaping our lives has encouraged manysmall to medium sized companies toattempt to tap into its power in order togrow their businesses. Manymanufacturing companies use theInternet to promote their products andprovide a margin on existing sales.

However, it’s a mistake to think the WorldWide Web provides only a sales outlet forcommercial players. One of the mostoverlooked and useful ways to use a website is for gathering market data. FranzCaffrey, owner of Franz Design, intends tocontinue to use his site in this way.

Although individual sales and additionalretail outlets are secured via the webchannel, the primary focus of the site hasalways been to capture demographicmarket data. Information obtained will beused in the future to target specificoverseas regions for the location of retailoutlets. Franz Caffrey himself has alwaysfelt that his products, by their very nature,need to be seen and touched in order fortheir full beauty to be appreciated. Hencethe importance of locating retail outlets incountries and regions that hit the webstore most frequently.


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Plan for future growth

Ideally you will have considered futuredevelopments in your business at theoutset. If you have not done this, then atleast make sure you’re thinking aboutgrowth as soon as your implementationis complete.

Many companies are naturally reluctantto commit to large-scale investment intechnology. However by taking an ad-hocapproach, you can incur additionalunnecessary costs if it proves necessaryto commit to the full solution at a laterdate. A modular approach is often thebest route to take, where feasible.

When VLM developed an integratedonline printing system, they faced achoice of investing in a sophisticateddatabase system eg. SQL or Oracle ordeveloping a smaller solution. If theyknew then what they know now, theywould have built the solution on anSQL or Oracle database.

When your eBusiness Project has gonelive; what next? Inevitably, once peopleget used to the benefits of the improvedIT systems they are going to come upwith new ways of using it. Different

Delivery of your eBusiness project is a new beginning, not an end

departments may seek to computerisetasks previously done manually. With theincreasing demands to comply withemployment and working hourslegislation, HR may for example decidethat they really need to computerise theirpersonnel records.

B2B sites often involve creating links notwith the customer’s staff but with theircomputer. As computer systems differ,this can require a degree of technicalwork each time a customer is hooked upin this manner. It can also involvetailoring part of the site to includecustomer branding or to provide specificinformation requested by a key customeror changing the format of existinginformation. Links to customer systemsmay have to be reworked when thecustomer implements major changes tothose systems. Hence, if you areexpecting to have fairly sophisticatedlinks with suppliers or customers, youshould budget for ongoing systemsintegration costs.

For most of the case study companies,once the eBusiness project has beendelivered, there was a recognition thatwhile time is needed to bed-down thenew processes and systems, businessrequirements will shift. Inevitably anevolving marketplace will requireongoing monitoring and ultimately freshinvestment in IT/eBusiness to stay ahead.Get ready for the challenge of change!


Case Study - Dubarry

For Dubarry, the web site going live wasnot seen as the end but the beginning.The company has set aside time forregular review sessions so that it cancontinue to learn about what itscustomers want and how they want it.While the behind the scenes structure ofthe web site is relatively fixed as asystem, the company has the facility toeasily initiate changes and to update frontend content. Dubarry is still very much inthe process of streamlining its new website - ideas are already being generatedas to the possible future direction.

Overseas marketing is becoming moreevent-linked. Along with partnershipin events such as the Volvo Oceanrace, Dubarry is becoming involved inother outdoor related events such asshow jumping, the Chelsea FlowerShow and Crufts Dog Show. The website will reflect these linkages andwhere possible provide additional

information on the events. Thecompany is also linking up withbrands which target the same marketbut are not competing. In the sailingarea, for example, there arepartnerships with equipmentsuppliers.

With the database growing on a dailybasis, the company also has directaccess to its consumer base and thereare several ways in which it mightexploit that. Michael Walsh, Dubarry’sMarketing Director, is consideringrunning online competitions ordeveloping an online newsletter. He iskeen however that whatever activity isundertaken, it reflects the quality of thebrand. “The worst thing you can do ispromise something and not deliver.How we interact directly with ourconsumers will effect how theyperceive us as a brand”, he says.

On a more practical level, the companyis receiving enquiries from potentialdistributors in areas where it does notyet have representation. It has decidedto include a section for these inquirieson its business-to-business section ofthe web site.

Available on the attached CDHow To Guide Promoting Your Online Presence

Case Studies Blarney Stone The Irish Chocolate CompanyDubarry PorterhouseFranz Design VLM

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ConclusionAs you can see from the case studies,eBusiness and IT can be of benefit in ahuge variety of ways.

The technology seems set to continue togrow rapidly in power and costeffectiveness. Companies that fail to adoptthese tools will be left behind bycompetitors who do. In the future, youwill be expected to have a goodunderstanding of how these technologiescan be applied to achieve businessobjectives. To all the staff and managersassigned to eBusiness project teams, theflip side of the hard work ahead, is thatthe projects are typically challenging andexciting. They will also build skills, whichwill be of practical value to you personallyand to your company in the future.

Basic Principles

The good news is that much of what youhave just read will remain validindefinitely. It will always be necessary toapply basic management practices.

Good practice guidelines• Have a clear picture of the business

benefits you are trying to achieve• Pick good people to work with,

whether internal staff or externalconsultants

• Deal with the concerns andaspirations of staff

• Pay attention to detail whenanalysing the current situation

• Plan projects carefully and monitorprogress

• Work constantly at consulting andcommunicating

These guidelines sound like commonsense and they are! Nevertheless, inpractice, as the case study companieskept reiterating to us, it is all too easy toneglect basic principles. As one recentlyretired IT project manager put it, “thereis a whole new generation out there andthey are making the same mistakes wemade, all over again!” So, as youproceed with your project, keep theseguiding principles in mind.

Timing is all

The case studies emphasise thatsignificant eBusiness projects, the onesthat create major headaches forcompetitors, take a long, long time beforethe effects become visible in the marketplace. If you wait till you see yourcompetitors reaping obvious benefitsfrom eBusiness, it may already be yearstoo late to try and imitate them.

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Even if you are not planning a significantIT/eBusiness project in the immediatefuture, at least make sure that any short-term decisions you make do not impedepotential future developments. Forexample, if recruiting a productionmanager or accountant, other thingsbeing equal, you might give preference toa candidate who has been through amajor eBusiness project.

Future Developments

Parts of this book will be out of datealmost as soon as it is printed. It is notjust technology that is going to change.For example, significant new eBusinessrelated legislation is likely to come intoeffect some months after this book isprinted and the way in which peopleapply IT seems set to radically altercertain business sectors. So there is a

need to stay abreast with newdevelopments. The Enterprise IrelandeBusiness website (www.openup.ie) andthe free electronic eBusiness magazinewhich you can subscribe to at that site,are two good ways to start. Other sourcesof information are outlined in the “UsefulLinks” section of the CD.

Take the Challenge!

eBusiness and IT can offer huge benefitsif done right. However, the rightdecisions are not always obvious andmisguided projects can be damaging.Your challenge is to ensure that yourcompany uses these potent tools wisely.We hope this book and CD, along withall the other eBusiness informationprovided by Enterprise Ireland, will helpyou to do that!

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Appendices

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Appendices 11/15/02 12:16 PM Page 1

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Appendix 1: Indicative costs

Introduction

As costs are a critical element of alleBusiness projects, we felt it would beremiss not to include indicative costs, togive you a high-level, initial feel for possiblebudget requirements. However clearly thesewill change - probably radically - with time,so you will need to do your owncomprehensive research on costs when itcomes to planning your project.

It was difficult to put a “line in the sand” onthe costs of an “average” eBusiness project,as no such thing exists. So for the purposesof documenting indicative costs, we havelimited this section to the expenditureassociated with developing a web site,which encompasses four main areas: front-end development, hardware, bandwidth andthe software applications used to run theservices of the site.

Front-end Development

Front-end development relates to the webpages that visitors see, their look and feel,and the overall site structure. It is usuallyperformed by professionals with designexpertise using software tools such asDreamweaver. Graphic design of the brandand imagery of the site can range from€1,000 to greater than €10,000 for a top-endsite. The HTML and web page coding

follow a similar pricing ramp. The key variables are the quantity, complexity andoriginality of the respective images andpages. It is possible to use standardtemplates to dramatically reduce the workrequired and costs incurred.

Some software development skills arerequired to integrate web pages withdatabases and application servers as well asscripting knowledge to perform actions suchas gathering form data, managingappearance of graphics and sending e-mails. At the most basic level, pre-developed scripts downloadable from theWeb, can be used. At the other end they cancomprise part of a larger developmentplatform such as enterprise Java (J2EE), atwhich point the expertise and costs ramp upsubstantially. Scripting costs can range from€500 upwards, per website.

Hardware

The principal hardware required is a hostmachine for the web site. The specificationcan begin as a server similar to a high-enddesktop PC. Hardware is specified to meetthe demands of factors such as projectedweb-site traffic, required response timesand data volumes which impact onrequirements for processor speed,


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memory size, redundancy and storagecapacity. A larger configuration couldconsist of a cluster of higher specificationhost machines.

Server costs range from €2,000 per host atentry level to greater than €40,000 atenterprise level. Installation costs canexceed €10,000 but for most circumstancesa much lower cost can be expected.Supporting hardware such asuninterruptible power supplies and back-upstorage devices can exceed €25,000. Atentry-level there may be no supportinghardware needed.

Bandwidth

Bandwidth relates to the capacity of thecommunications connection to yourserver. The greater the bandwidth the morea site can deliver. Bandwidth requirementsare calculated based on the maximumnumber of concurrent users and thevolume of data the average visitordownloads. It is typically measured inMegabits per second.

A key decision for companies is whether tohost their own site or to outsource thehardware and bandwidth requirement to adata centre. It is often economical tooutsource. Annual costs of hosting andbandwidth begin at €120 for a shared virtualserver and rise beyond €10,000 for dedicatedservers and substantial bandwidth.

Software Applications

The software required for a web site rangesfrom very simple, free software to complex,integrated and expensive enterprisesolutions. A typical, medium-sized web sitemay use free web server software such asApache, a free operating system such asLinux, an application server such as BEA’sWeblogic, a database such as Oracle and offthe shelf packages such as shopping cart andcontent management applications. Shoppingcart and content management functionalitybegin at around €500 and climb rapidly tocover enterprise content management for€200,000. It is possible to use open sourceapplication servers like JBoss and a freedatabase such as MySQL, however theexpertise required remains the same. Skillsare also required to provide security for theweb site and to integrate with paymentservices such as PayandShop.com. Thepracticalities and costs of this are discussedin “Setting up an Online Payment System”which you can find in the “How to” Guidesection of the CD.

An integrated solution implies integrationwith a company’s back office systems. Animplementation like this could use databaseand Java consultants, costing between €400and €1100 per day to install the platformsoftware, configure applications and writeany custom functionality required.

It is possible to get an entry-level,professionally designed web-site for between


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€3,500 - €5,000 with hosting and bandwidthcosts within the range of €120 to €1,200 perannum. This would provide a website with abuilt in database capable of limitedtransactions such as handling bookings. Itwould not include the costs of linking thewebsite to your back office IT systems.Beyond this, costs can rise substantially tosix-figure sums covering software licencefees and bespoke application developmentfees. Professional services on bespokedevelopments can cost five times more thanthe software platform the application isrunning on.

DIY websites can be built at lower prices but,apart from often appearing inferior, theirrunning costs frequently exceed those of aprofessional website.

Enterprise Resource Planning (ERP)

The showpiece part of eBusiness, the website, visible to the world, often masks thetrue implications of really doing eBusiness.As we have explained before, many casestudy companies found it necessary toupgrade their back office systems. This oftenmanifested itself as an ERP (EnterpriseResource Planning) implementation.

A full ERP implementation involves everydepartment in the business using modules ofthe same overall ERP application. Customerdata and order information form thebackbone of integrated software modules

such as for finance, logistics, manufacturing,and sales. Vendors of ERP suites includeOracle, Siebel, Peoplesoft, SAP andMicrosoft. Each of these vendors has acomprehensive suite of applications withMicrosoft an interesting vendor at present.Typically these would be targeted atcompanies employing say 200 plus people.Companies such as Sage would targetsmaller companies. Together with its .NETplatform, Microsoft is rolling out a new suitefor ‘medium-sized’ companies to be calledMicrosoft Business Solutions.

ERP implementation projects have a mixedreputation. If they are successfullyintroduced, an organisation is streamlined,responsive to customer needs andproblems can be more easily pinpointed.The reality has included the full spectrumfrom expensive disasters to ROI nirvana.

ERP Costs

So what are the costs? First off, ERP projectsare expensive. An iceberg is a very goodanalogy - the actual software licence costs arethe tip of the iceberg. If they seem expensive,be very careful. Any look at ERP costs mustlook at the costs of software, hardware,professional services and company staffcosts. The time taken for ERP applications tobed down begins from 6 months and climbs.Costs which manifest themselves during thistime include maintenance, upgrades andoptimisation of the system.


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Software costs depend on what you buy andhow you buy it. It is possible to buy a full ERPsystem for your entire organisation or followa ‘Franchising Strategy’ which entailsimplementing department by department.Once successfully implemented, the modularapproach radically reduces the risks of rolloutto complementary areas. Further still, it’spossible to ‘rent’ the software as a service,subscribing to an application serviceprovider’s offering, where they host andmaintain the hardware and software platform.

At the €100,000 level (including softwarepurchase and consultancy fees needed forinstallation and configuration), a companycan implement a basic ERP-typeenvironment across a few departments andbuild on the experience that gives themwhen they want to roll out other modules.The software licence cost will varyaccording to the modules chosen and thenumber of end users required. According toWilliam Dolan, Director, Deloitte & ToucheManagement Consultants, the softwarelicence cost of a typical full implementation,covering most or all departments, comes inbetween €250,000 and €500,000. Oracle sellmodules one at a time or a full ‘ApplicationSuite Licence’ which provides access to allmodules required.

General annual maintenance fees come inbetween 17.5% and 22% per annum of thesoftware purchase costs and these feescover base software upgrades, phonesupport and access to product knowledgebases such as ‘Metalink’ from Oracle.

Implementation of ERP projects

Implementation service costs, i.e. theconsulting fees involved in installing thesystems and configuring it to the company’sbusiness processes, vary widely. Theyaverage a 2:1 ratio compared with thelicence costs. A ratio of 1:1 is possible,whereas ratios of 3 and 4:1 are commonlyquoted in US sources. Consulting servicecosts have the potential to growsubstantially beyond budget. According toJason Lott, Client Manager with Oracle, thereduction of complexity is critical in reducingimplementation costs and the ongoing totalcost of ownership. He cited architecturalcomplexity, the quantity of interfaces, levelof customisation required, data transfer andreport customisation as areas to beminimised where possible. Particularly forsmaller businesses, he recommends thecompany consider adopting the establishedprocesses within the software, rather thantrying to adapt existing company processes.Adopting a pre-designed process presentsan opportunity to adopt industry bestpractice, particularly if the vendor is talkingabout familiar processes such ‘procurementto payment’.

As we have emphasised previously,substantial in-house staff time will beneeded. The cost of this time is not includedin the above figures.

Gartner Group research suggests that, “at aminimum, enterprises should allocate 17percent of the total cost of an ERP project to


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training. They also found that companiesthat budget less than 13 percent of theircosts for training are three times more likelyto see their ERP projects run over time andover budget when compared withcompanies that spend 17 percent or moreon training.”

Hardware costs for ERP again vary on thenumber of concurrent users and the type ofusers on the system. Furthermore, acompany may want dedicatedenvironments for testing, training andfacilities for back-up and recovery. A typicalERP server will have costs similar to thosepreviously outlined for a web server.Implications for the company’s network alsovary. In many cases the existing networkwill suffice, possibly with only minorchanges. Even if more significant work isrequired, hardware costs are very unlikelyto exceed the cost of the software.

The above costs relate broadly to companieswith upwards of about 200 employees. Thereare many smaller product and servicevendors who offer similar base functionalitybut at small business prices. One example isExchequer Software (Please note thatEnterprise Ireland dos not recommend norendorse this or any other vendor).

Alan Connor of Exchequer Software paintsa beguiling end-to-end picture of an ordercoming in from the web, being held

electronically for approval and passed onfor manufacturing and delivery with theentire process taking place electronically.All documents such as purchase orders,works orders and delivery dockets can beproduced electronically and if customersare also integrated, passed electronicallyto them.

The reality is that most smaller businessesimplement some of these functions andretain existing processes for others. Theobjective he sees is to allow companiesgrow into the more automated processesover time.

Costs for Exchequer Software range from€10,000 for the full software suite for asingle user, together with additionaltraining and configuration costs of around€5,000 to all-in costs of around €70,000 fora site with 25 to 30 users. As ever, thecomplexity of the site and the degree ofintegration with existing systems is animportant variable affecting theimplementation costs.

A Final Word of Advice.

Costs can vary so substantially that it isimperative to shop around, identify realneeds and aim towards a platform forfuture growth.


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Appendix 2: Glossary of Terms

ADSL

Asynchronous Digital Subscriber Line. A formof DSL (see below) telephone connection inwhich incoming traffic has higher speeds thanoutgoing traffic.

Application Service Provider (ASP)

A company that offers subscription services forapplications and related services on a pay-per-use basis. ASPs host, manage and maintainapplications at their own site and make themavailable via the Web. This enables smallercompanies or those with limited budgets totake full advantage of the latest informationtechnology.

Autosignatures

These are essentially a form of onlinebusiness card, usually about six lines longoffering a short description of your business,a phone number, an address etc. You caneasily programme most email packages toinsert them automatically at the end of everyoutgoing email. If you do not know how setup an autosignature try typing“autosignature” into the “Help” function ofyour email package.

Backend

The backend of a website is where all thecommunications between the customer andyour site are processed. It’s basically where allthe work on the site is done, whether itinvolves sending data from forms to the server,or searching for information on your site orprocessing online transactions.

Broadband

When the bandwidth of a signal is large, it cansimultaneously carry many channels ofinformation. Fibre optic cable, in particular,has a very high bandwidth, and is referred toas broadband.

Business Process Management Services

These services transform, manage, and run keybusiness processes, including customerrelationship management, sourcing andprocurement, and employee services, applyingeBusiness technologies to achieve significantoperational improvements.

Business-to-Business (B2B)

Electronic commerce comprises commercialtransactions, involving both organisations andindividuals. From the technical point of viewe-commerce is the processing andtransmission of digitised data. Electroniccommerce does not only refer to therelationship between business and consumer,but also to the economic connection betweenbusiness and business.This means that acompany that uses the internet for orderingfrom its suppliers or making paymentsalready takes advantage of e-commerce.

Business-to-Consumer (B2C)

E-commerce decreases the distance betweenproducers and consumers. Consumers canmake their purchase without entering atraditional shop.


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Customer Relationship Management (CRM)

Use proven methodologies and eBusinesstechnologies to help enable companies toidentify, select, acquire, develop, and retainprofitable customers, building the lastingrelationships that are key to long-termfinancial success.

Data Mining

Data mining is the process of analysingbusiness data in a data warehouse to findunknown patterns or rules of information thatyou can use to tailor business operations. Datamining can find patterns in data to answerquestions, such as what item purchased in agiven transaction triggers the purchase ofadditional related items or what items tend tobe purchased using credit cards, cash orchecks. Data Mining predicts future trends andbehaviours, allowing businesses to makeproactive, knowledge-driven decisions.

Data Warehousing Management

The ongoing supervision of the datawarehousing process. A data warehousecollects, organises and makes data availablefor the purpose of analysis. It givesmanagement the ability to access and analyseinformation about its business.

Dial-up

Calling up Internet access via analoguetelephone lines or ISDN

Domain name

A domain name identifies your website on theInternet. One of the first things that you shoulddo when developing your site is register yourdomain name eg www.enterprise-ireland.com

Your domain name is a very valuablemarketing tool and you should choose yourdomain name with great care.

DSL

Digital subscriber line. A telephone connectionusing existing standard copper telephone wiresto transmit data at speeds far in excess ofconventional analogue telephone lines.Described in more detail in “Choosing yourTelecom Options” in the How To Guides sectionof the CD.

eBusiness

The process of doing business with tradingpartners electronically. This includes processingbusiness transactions electronically; integratingbusiness processes electronically, transferringpayments electronically; and deliveringservices electronically.

eCommerce (Electronic Commerce)

Conducting business online, including productdisplay, online ordering, secure transactionsand inventory management.

Electronic Data Interchange (EDI)

The electronic exchange of businessdocuments (for example, purchase orders,invoices, and bills of lading) directly betweenapplications executing on companies’computer systems via standardised forms. Aprecursor of today’s eBusiness systems.

Email

Email, or rather electronic mail, is the mostcommonly used application on the Internet.Email allows you to send text messages acrossa network, either an internal network or an


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external one like the Internet. To send an emailyou must know the email address of theperson you want to send the mail to [email protected]. An email address iscomprised of a user name, in this case john,and the name of the server that the mail hasbeen sent to, in this case somewhere.com.

Encryption

Encryption is used to protect data your after ithas left your internal system. Encryptionrenders your data unreadable usingmathematical formulae known as keys. Yourdata is turned back into readable form, i.e.deciphered, by applying the correct key.

Enterprise Resource Planning (ERP)

An Enterprise Resource Planning (ERP) systemhelps an organisation manage the importantparts of its business. It has different modules tolook after areas such as production planning,procurement, human resources and finance.The implementation of an ERP system involvesa considerable amount of process re-engineering and employee retraining. SAP,Peoplesoft, and J.D. Edwards are among thelargest ERP providers.

Extranets

Extranets allow your clients to access parts ofyour internal networks, which are normallyinaccessible to people outside the company.They are useful for online ordering andpayment systems. In addition, the client canhave access to work in progress or trainingand product information geared preciselytoward them.

Ezine

An electronic magazine or newsletter deliveredover the Internet via E-mail.

Firewalls

A firewall is a set of related programs, locatedat a network gateway server that protects theresources of a private network from usersfrom other networks. (The term also impliesthe security policy that is used with theprograms.) An enterprise with an intranet thatallows its workers access to the wider Internetinstalls a firewall to prevent outsiders fromaccessing its own private data resources andfor controlling what outside resources its ownusers have access to.

Frontend

The frontend of a website is the part that yousee on the screen: the graphics, the fill-informs, the overall interface design. If you wantto do more than display graphics and text youwill also need a Backend.

FTP

(File Transfer Protocol) -- A very commonmethod of moving files between two Internetsites. FTP is a special way to login to anotherInternet site for the purposes of retrievingand/or sending files. There are many Internetsites that have established publicly accessiblerepositories of material that can be obtainedusing FTP, by logging in using the accountname anonymous, thus these sites are calledanonymous ftp servers.

HTML

(Hyper Text Markup Language) is the set ofmark-up symbols or codes inserted in a file


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intended for display on a World Wide Webbrowser page.

Internet Service Provider (ISP)

A company or organisation that offers Internetaccess to customers for a fee. Some ISPs offerhosting of Websites and Website design andpromotion services as well.

Intranet

Intranets are websites that can only beaccessed within a company through yourinternal network or LAN. They are protectedfrom the outside world by a combination ofhardware and software security. Intranets are agood way of sharing information within thecompany; enhancing internal communicationand enabling better customer care. Intranetscommonly hold products and service guides,employee handbooks, company wide memos,phone numbers and email addresses.

ISDN

A form of telephone connection in whichdigital signals are sent over existing coppertelephone wires. Speeds vary considerably,but are always higher than traditionalanalogue telephone connections. Describedin more detail in “Choosing your TelecomOptions” in the How To Guides section ofthe CD.

JIT

JIT or just-in-time manufacturing describesan approach in which components orproducts are only manufactured as they areneeded, in the exact number needed, andsupplied to the point of use at the exact timethey are needed.

Knowledge Management (KM)

The creation, storage and collaborative sharingof employee information within the businessenvironment. Through sharing andcollaboration, an organisation's efficiency,productivity and profitability is enhanced.Supported by advanced Information Technologytools and methods.

LAN (Local Area Network)

A combination of personal computers, servers,and communication devices that are connectedto share data files, resources and applications.Located in close proximity, such as on thesame floor or in the same or nearby buildings.

Leased Line

A permanently open telephone connection. Nodial up is necessary.

Logistics

The process of physically delivering goods tocustomers is known as logistics. This is vital,and often over-looked, sector is likely to benefitgreatly from an increasing dependence oneCommerce.

MRP

A basic MRP system uses data about existingcomponent stocks, the company’s productionplans and the number and type of componentsused in each of the company’s products togenerate a list of the number and type ofcomponents to be purchased. Moresophisticated MRP systems, sometimes calledManufacturing Resource Planning alsoschedule production and can be integrated withaccounts packages etc. Materials RequirementsPlanning software package are increasinglybeing supplanted by ERP systems. However


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they are still used by many manufacturingcompanies, particularly smaller ones.

Online Procurement

This describes purchasing which takes placebetween companies using services such as theInternet, Electronic data Interchange orElectronic File transfer. Two companies, one thesupplier and the other the purchaser, transmitinquiries, orders, invoices, payments etc.directly through their computer systems.

Open Source

Open Source refers to software products thatare freely available and offered bydevelopment communities online. Theycome with no warranty but are usually verywell tested by development groups. OpenSource software can help reduce costs, butonly a limited number of products areavailable via this channel. The mostrenowned open source product is Linux. Thisis a free UNIX-type operating system (see www.linux.com).

Search Engine

These are websites which store informationabout webpages and which allow you to searchthrough this information to find the specificpage that you are looking for. Some of themost popular search engines include Yahoo,Alta Vista and Google.

You can register your website with all thesearch engines and this is one of the mostimportant methods of marketing your siteonline. Hidden words, known as meta tags,can be inserted into your webpages and thesearch engines use these meta tags toidentify your site.

Search Engine Optimisation

This covers a variety of measures to ensurethat when a potential customer keys in wordsrelevant to their products, their site is as closeas possible to the top of the search engines list.

SME (Small to Medium Sized Enterprises)

Various definitions exist however for thepurpose of this book, it is assumed thatcompanies with 250 employees or less can bedescribed as an SME. This encompasses mostIrish businesses.

Note: For a more detailed glossary oneBusiness Terms please refer to the “FindingHelp” section of the Enterprise IrelandeBusiness website. www.enterprise-ireland.com/ebusiness

SQL

SQL (Structured Query Language) is a standardinteractive and programming language for gettinginformation from and updating a database.

Supply Chain Management (SCM)

An electronic alternative to the traditionalpaper chain, providing companies with asmarter, faster, more efficient way to get theright product to the right customer at theright time and price. Combines the power ofthe Internet with the latest technology,enabling participating suppliers to access up-to-date company information and enablingcompanies to better manage and track supplyand demand.

WAN (Wide Area Network)

A group of connected local area networks(LAN, see definition above) spanning a largegeographical area, such as a city or country.


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Appendix 3: List of Case Studies

The full version of each of these casestudies is available on the CD.

BASTA PARSONS

A Sligo-based manufacturer ofironmongery interacting online with retailmultiples.

BLARNEY STONE

An Irish giftware manufacturer successfullyselling to U.S. consumers using highlysophisticated online marketing techniques.

C&D FOODS

The Co. Longford based pet foodmanufacturer that improved businessprocess efficiency using a web-enabledback office system.

COMBILIFT

A specialist forklift supplier using eBusinessto grow their distribution network and drivecustomers to distributors.

CONNAUGHT ELECTRONICS LTD (CEL)

Shop floor computerisation and electroniclinks with suppliers and customers yieldedsignificant benefits for this automotiveelectronics manufacturer.

DAWN FARM FOODS (abbreviated)

An IT project enabled the variousfunctional departments, within thismanufacturer of cooked meat products, tointeract more effectively with each other.

DIGISOURCE (abbreviated)

This company has managed to cut leadtimes down to as little as three hoursthrough the implementation of theireBusiness systems.

DUBARRY

A footwear manufacturer that managed tosell direct online while keepingdistributors happy.

FRANZ DESIGN

A small furniture and giftware companythat implemented a low-cost consumerwebsite.

HOUSE OF IRELAND (abbreviated)

This giftware and clothing retailerdeveloped systems to better-serve overseascustomers.

KENNY’S BOOK EXPORT COMPANY

This Galway based book retailerintroduced an online Library ManagementSystem and an Enterprise ResourcePlanning (ERP) System.

KINGSPAN

A building products manufacturer thatgained significant extra market share byreducing order entry errors and reducinglead time.


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LAKE COMMUNICATIONS

This company radically streamlined thedelivery process for it’s telecommunicationsproducts.

LOTUS AUTOMATION

A rapidly growing automation companyefficiently managing staff at customers’facilities all over the world.

MEASURESOFT

A software contracting specialist that usesweb-based systems to deliver licences andsupport customers.

MINCH NORTON (abbreviated)

A Co. Kildare based malt manufacturer thatbenefited hugely by upgrading existingsystems prior to the implementation of theeBusiness project.

PORTERHOUSE

A textile and fashion manufacturer thatuses an online catalogue to offer the latestfashions, thus avoiding the lead timelimitations of printed catalogues.

REPROGRAPHIC SYSTEMS

This company built a sophisticated remoteworking and eBusiness solution and did itwithout implementing a website.

SERCOM SOLUTIONS

A major IT upgrade and a web front endhas allowed Sercom provide more servicesto its IT customers and handle far moresmall orders.

SIGMA WIRELESS TECHNOLOGIES

A company that successfully usedeBusiness to capture it’s deep technicalknowledge and place it at the disposal ofsales staff.

SPECIALITY PRINT AND DESIGN

This print service provider had longoutsourced its conversion of artwork intofilm but this involved a loss of control ofthe process. To regain control, SPD investedin electronic plate making equipment. Thecompany also put a website in place andintroduced new internal systems.

TECPRO (abbreviated)

A manufacturer of test solutions to theelectronics industry, this company hasreduced paper filing by over 90% througheBusiness.

THE IRISH CHOCOLATE COMPANY

A manufacturer of handmade confectioneryproducts that managed to increase mailorder sales by 500% through thedevelopment of a new website.

VLM

This digital printing company entered acompletely new market as a result of it’sinnovative eBusiness project.


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The full version of each of these guides isavailable on the CD.

SECURITY

This comprehensive guide to informationsecurity tells you how to protect yourbusiness from both internal and externalthreats to your information systems. Youcan also learn how to build customer trustand protect customer privacy throughinformation security.

CHOOSING AN ISP

Find out how to choose the ISP most suitedto your needs. This guide also explains howto decide which type of Internet access youwill need and outlines the other services onoffer from ISPs: hosting, co-location,managed services, technical support andeCommerce.

CHOOSING AN eBUSINESS VENDOR

What functionality or services should youbuy rather than build? How do you choosethe most appropriate eBusiness vendor ?

PROMOTING YOUR ONLINE PRESENCE

This guide explains how you can develop arealistic promotional plan for your online

presence using existing offline material, search engine optimisation, email andother marketing tools.

eLOGISTICS

Find out how to apply IT and eBusinessprinciples to your procurement andfulfilment processes, thus reducing costs and increasing both competitiveness andcustomer satisfaction.

THE INTERNET AS A BUSINESS

INTELLIGENCE TOOL

Learn how to use the internet as a researchresource for business purposes.

SETTING UP AN ONLINE PAYMENTS

SYSTEM

This is a practical guide which outlinessome of the issues to consider whenimplementing a credit card paymentssystem on your website.

Appendix 4: List of How To Guides




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