The University of Hong Kong

Faculty of Business and Economics

School of Business

e-Business Transformation
Spring 2008

I. INFORMATION ON INSTRUCTOR AND COURSE

Professor: Ali Farhoomand
Email: ali@business.hku.hk
Web: www.business.hku.hk/faculty.staff
Office Location: MW 729G
Telephone: 2859-7069
Tutor: Becky Tsang
Email: beckytyp@hku.hk
Text: Managing e-Business Transformation, by Ali
Farhoomand, Palgrave/MacMillan Publishing

Ali Farhoomand is Professor of Innovation and Information Management and the founding Director of Asia Case
Research at School of Business. He has taught and conducted research in universities across Asia Pacific, North
America, and Europe, including INSEAD and as a Visiting Scholar at MIT Sloan School of Management. A
three-time winner of the Society for Information Management Paper Award, Ali has written several books,
published numerous refereed articles, and developed over 100 business case studies, several hundred thousand copies
of which distributed worldwide. Last year he conceived and produced the popular FocusAsia Business Leaders
Video Series featuring prominent Asian CEOs, which was aired by many global TV networks, including the BBC
World and the Public Broadcasting Service. Ali is recipient of two Faculty Teaching Awards as well as the
prestigious 2008 University Outstanding Teaching Award. For hobby, he dabbles in painting, plays drums and
engages in armchair philosophy.

II. COURSE DESCRIPTION AND OBJECTIVES

Course Description:

The Internet has shortened business transaction cycles, expanded market reach, and allowed
companies to build and manage customer relationship more effectively. Today almost every
company is trying to find out how best to deploy the Internet throughout its value chain to
improve operational effectiveness, entrench strategic position, and ultimately create sustainable
competitive advantage. Transformational initiatives, however, are difficult to implement and
prone to failure as companies must grapple with a whole host of strategic, organizational,
technical and increasingly global issues.

This course builds on the basic principles of business and economic to examine the role of the
Internet as a strategic necessity. It provides a roadmap for transforming companies into inter-
networked enterprises where proprietary and shared infrastructures are used to link customers,
suppliers, partners and employees to create superior economic value. You will learn how the
Internet can provide firms with the necessary infrastructure needed to align their business strategy
with IT strategy, streamline front-end and back-end processes, manage relationships and
partnerships, and adapt to emerging global issues such as outsourcing and offshoring.

e-Business Transformation – Spring 2009 1

Course Objectives:

1. To learn the theories of organizational transformation networked organization, and

dynamic organizational equilibrium.
2. To develop a working prototype of an Internet-based business system.
3. To work in teams effectively.
4. To develop a global outlook.
5. To articulate and make a business case.

III. LEARNING OUTCOMES

Upon the successful completion of this course, students should:

1. Know how to apply complexity and chaos theories to study organizational transformation
2. Understand the theory of dynamic organizational equilibrium and its application in
studying the relationships between business strategy, technology deployment and process
management.
3. Be able to outline the specific attributes of networked organizations.
4. Be able to develop simple Internet-based systems.
5. Be able to work in teams effectively.
6. Demonstrate a solid understating of global issues as they relate to organizational
transformation.
7. Be able to write effective business reports, and make compelling presentations.

IV. ALIGNMNET OF PROGRAM AND COURSE OUTCOMES

Program Learning Outcome Course Learning Outcome

Principles and theories of • Understanding chaos and complexity theories

business and economics • Understanding dynamic organizational equilibrium
• Understanding process management
• Understanding network theory

Global perspective • Understanding global issues surrounding

transformation

Apply knowledge to real-life • Building a workable information system prototype

problems

Working in Teams • Teamwork

Effective communication skills • Oral and written communication

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V. TEACHING AND LEARNING ACTIVITIES

This course relies on a variety of activities to inculcate the fundamental principles of

organizational transformation. The course is entirely student-centered; there are no exams.
During the course, we will use the following activities:

• In-class discussions: A significant part of learning happens in the classroom in form of

contribution to the case and class discussions.
• Using the case method. The case method will be used as a vehicle not only to solve
problems but more importantly to ask the right questions and see the unseen.
• Watching videos. Most of cases used in the course are accompanied by professionally
produced video tapes of the corresponding companies and executives.

VI. ASSESSMENT

Learning outcome Teaching and Learning Assessment

Activity

• Understanding chaos and Lectures; in-class Attendance, participation

complexity theories discussions, case studies, in class discussions
• Understanding dynamic videos
organizational equilibrium
• Understanding process
management
• Understanding network theory

• Understanding global issues Lectures, in-class Attendance, participation

surrounding transformation discussions, case studies, in class discussions
videos

• Building a workable information Tutorials, term projects Attendance, participation

system prototype in tutorials, term projects

• Communicating thoughts Videos, in-class Attendance, participation

effectively exercises, case in class discussions, case
assignments, term assignments, term
projects projects

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VII. STANDARDS FOR ASSESSMENT

1. Class Contribution 30%

2. Case Presentation 20%
3. Written Case Analyses 20%
4. Design Project 30%
Notes to Assessment:

1. Success of this course depends on your individual and collective contribution to the case
analyses and class discussions. Please read the assigned readings and prepare the cases
before each class so that you could contribute effectively to case discussions. Learning
with cases occurs at three stages: at individual-level, at group-level and in classroom. So
after you have prepared a case individually you should discuss it in your study group
before coming to the class.

You are expected to participate voluntarily, or will be called upon, to contribute to case
discussions. The learning objective of this part of the course is to enhance your
communication, listing, and articulations skills. Your grade for this part will depend on
your ability to apply relevant theories and concepts to the case under study, listen
carefully to the discussion under way, organize your remarks, and articulate your
thoughts and ideas in coherent and logical manner.

Please see the following Guidelines for Assessing Contribution to the Learning
Process in the Case Method:

1. Facts Am I sticking to the case facts?

2. Analysis Have I distinguished the critical and relevant from incidental and
irrelevant?

3. Synthesis Have I organized the conclusions of my analysis into an intelligible

whole?

4. Presentation Is my presentation clear and to the point? Does it follow the flow
of the discussion, or is it an isolated comment?

5. Learning Am I listening to what others are saying, reassessing my own

analysis and conclusions accordingly?

6. Consistency Do I do this consistently and as a rule?

2. Another learning objective of this course is to train you to work effectively in teams.
Each group of two students will make formal presentation of an assigned case. Your
presentations should take approximately 45 minutes. Your grade for this part will depend
on your collective ability to deliver professional and persuasive presentations. In effect
you have to be able to “make a case”.

1. In addition to spoken communication, this course seeks to improve your writing. In this
light, you should submit written analysis of two assigned cases. Your reports should be

e-Business Transformation – Spring 2009 4

 approximately five pages double-spaced and should also include an executive summary.
They must be handed in before the start of the class. You need to pay attention to the
following issues:

• Are all major issues and problems in the case identified?

• Are your analysis and interpretation of the case accurate, valid and appropriate?
• Are your recommendations based on a synthesis of your analysis?
• Is your implementation plan credible?
• Have you made a compelling and credible “case”?
• Is your Executive Summary accurate and complete?
• Is your presentation clear, appropriate and organized?

Please see the Guidelines on Preparing the Case Assignments on the next page.

3. You are expected to understand what it takes to design, develop, and implement an
information system. By the 4th week of the course, your group should come up with an
idea, in the form of a business proposal, for doing business on the Web. The business
plan should include a feasibility study, as well as detailed financial projections and
marketing plan. You are expected to perform the necessary information requirement
analysis before designing the Web site that would satisfy the specifications of your
proposed business plan. During the tutorials you will learn how to use appropriate
software development tools to build a working prototype of your system. All groups will
present their projects in the last two sessions of the course. Your grade for this part will
depend on the following: i) innovativeness of your business plan, ii) completeness of
your information requirement analysis, iii) functionality and ease of use of your
prototype.

VIII. ACADEMIC AND CLASS CONDUCT

• Plagiarism and copying of copyright materials are serious offences and may lead to
disciplinary actions. You should read the chapters on and “Plagiarism” and “Copyright”
in the Undergraduate/Postgraduate Handbook for details. You are strongly advised to
read the booklet entitled “What is Plagiarism?” which was distributed to you upon your
admission into the University, a copy of which can be found at www.hku.hk/plagiarism.
A booklet entitled “Plagiarism and How to Avoid it” is also available from the Main
Library.
• The use of all electronic devices, including computers, mobile phones and games is
strictly prohibited.
You are required to attend all the classes on time. In case you cannot attend a class you
should inform the instructor beforehand.

e-Business Transformation – Spring 2009 5

 Guidelines on Preparing Written Case Assignments

This guide is designed to help you prepare for the written assignments for this course, and
contains additional guidelines that are crucial and helpful to you. Please read carefully and do
not hesitate to ask questions.

Submission

All written assignments should be submitted online before the deadline. Late submissions are
NOT allowed. Approval for any alternative arrangements due to bona fide work or personal
reasons must be obtained from Professor Farhoomand in advance.

Formatting Standards

Assignments should be in Microsoft Word. Please include in the filename your last name, first
name, and assignment title, e.g., chan_john_assignment1.doc. For the group assignment you
may use your group number or name instead, e.g., group_2.doc. The main body of your report
should be double-spaced using Times New Roman, Pt 12 (except for headings, exhibits, tables,
etc.). The page size should be A4, with 1-inch margins (top, bottom, left, and right).

Structure and Content of Written Assignment

Your individual assignment shall consist of a cover page, a one-page executive summary, the
report itself, references (if any), and exhibits/appendices (if any).

Please include on the cover page: assignment title, course title, instructor name, student name,
student ID, and submission date.

The one-page executive summary should be single-spaced and no more than one page in length.
It is a summary of your entire report and should allow the reader to grasp the major issues, the
pro and cons, and the recommendation without having to read the report itself. Do not confuse
the executive summary with the introduction in the report. The executive summary is NOT the
introduction and they are NOT substitutes of each other.

It is recommended that the report itself include the following major sections: introduction,
analysis of the issues, analysis of options, recommendation, and conclusion (depending on the
assignment itself, you may have to make your own adjustments). The report is graded on the
quality of the analysis, logic and coherence of the arguments, as well as its readability, and
overall organization and presentation. Please follow the 1500-word guideline and include a word
count at the end of your report. The word count should include only the report itself, i.e., it
should exclude cover page, executive summary, references, exhibits, etc.
Plagiarism, or using other people’s words or ideas as if they were your own, is a serious
academic offense. When using other people’s work, you must properly cite and reference the
source. Please use a consistent referencing style throughout your report. Even though you may
use exhibits to supplement your written report, please bear in mind that exhibits should not
replace written analysis.

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IX. COURSE WEEKLY SCHEDULE

Part I – e-Business Strategy and Valuation

Session 1 – Jan. 15
Introduction

Session 2 – Jan. 22
Complexity, Chaos, and Business Order
Case 1: Does IT Payoff: Strategies of Two Banking Giants

Session 3 – Feb. 5
e-Business Strategy I
Case 2: TAL Apparel Limited: Stepping Up the Value Chain

Session 4 – Feb. 12
e-Business Strategy II
Case 3: Citibank

Part II – e-Business Infrastructure

Session 5 – Feb. 19
e-Business Infrastructure I
Case 4: PricewaterhouseCoopers

Session 6 – Feb. 26
e-Business Infrastructure II
Case 5: alibaba.com

Part III – e-Business Process Management

Session 7 - March 12
Enterprise Planning Systems
Case 6: SAP Platform Strategy

Session 8 – March 19
Customer Relationship Management
Case 7: Grey Worldwide

Session 9 – March 26
Supply Chain Management
Case 8: Constructing an e-Supply Chain at Eastman Chemical Company

e-Business Transformation – Spring 2009 7

 Part IV– e-Business Implementation
Session 10 - April 2
e-Business Implementation and Global Considerations
Case 9: Daksh and IBM: Business Process Outsourcing In India: Part 1

Sessions 11– April 9

Project Presentations

Session 12 - April 16
Review

e-Business Transformation – Spring 2009 8

 Part I – e-Business Strategy and Valuation

Session 1 – Jan. 15

Introduction

Learn about: ƒ Transition from industrial revolution to digital revolution

ƒ Impacts of the Internet on the dynamics of today’s economy
ƒ Factors shaping the networked economy
ƒ Technology-productivity paradox
ƒ Process of creative destruction
ƒ Network effect
ƒ Information as an experience good
ƒ Economics of information

e-Business Transformation – Spring 2009 9

 Session 2 – Jan. 22

Complexity, Chaos, and Business Order

Learn about: ƒ e-Business transformation cycle

ƒ Transformation success as a moving target
ƒ Causes of failure of transformation initiatives
ƒ Chaos and complexity
ƒ Paradoxes surrounding organisational transformation

Read: ƒ Chapter 1

Prepare Case: Does IT Payoff: Strategies of Two Banking Giants

Case Questions: 1. Some have argued that companies should spend less on IT and wait
longer to invest in more matured technologies because IT is a commodity
and brings little competitive advantage. If this is the case, how could
these two banks justify their multi-billion dollar annual investments in
IT?
2. How would you assess IT investment strategies at HSBC and Citigroup?
Do they invest in IT primarily as a way of cutting costs and improving
their operational efficiencies, or do they invest strategically with a view
to entrenching their competitive positions?
3. In general, how should companies go about assessing the value of their
IT investments? In your assessment, which of the two banks is cleverer
in its IT investments?

e-Business Transformation – Spring 2009 10

 Session 3 – Feb. 5

e-Business Strategy I

Learn about: ƒ Strategy and e-business transformation

ƒ Forces transforming strategy
ƒ Achieving sustainable competitive advantage

Read: ƒ Chapter 2

Prepare Case: TAL Apparel Limited: Stepping Up the Value Chain

Case Questions: 1. Discuss the dynamics of the apparel value chain and how the global
apparel industry is classified as a buyer-driven industry.
2. Analyze the value chain of the global apparel industry, and discuss the
roles and relationship of all industry participants from raw material
providers, manufacturers, wholesalers, to retailers.
3. Discuss how the use of IT has enabled TAL to integrate and synchronize
its operations with those of its major customers, and how this integration
and synchronization contribute to the company’s sustainable competitive
advantage.
4. Discuss the benefits and impacts of the Vendor Managed Inventory
(VMI) and Made-to-measure initiatives to TAL, and how these initiatives
have contributed to the strategic repositioning of the company in the
apparel value chain.

e-Business Transformation – Spring 2009 11

 Session 4 – Feb. 12

e-Business Strategy II

Learn about: ƒ Major factors influencing strategic IT investment decisions

ƒ Forces that erode competitive advantage
ƒ Steps involved in e-business strategy
ƒ Dimensions of e-business architecture

Read: Chapter 3

Prepare Case: Citibank's e-Business Strategy for Global Corporate Banking

Case Questions: 1. How does Citibank differentiate its e-business product offering from
that of its competitors? How could Citibank create its own
competitive advantages in the market place?
2. Citibank’s strategic intent is to convert its traditional money
management business into an e-business framework. How does
Citibank transform its traditional assets into digital assets? What
issues, if any, do you envision that Citibank must overcome in order
for the implementation to be successful?
3. Is there any growth potential for this business? What opportunities
and threats does Citibank face?
4. How could Citibank’s Cash and Trade Group develop different e-
business products for different industries? How can Citibank
identify what it needs to offer when the market is changing so
rapidly?
5. One of Citibank’s challenges is managing vendors, suppliers and
clients without allowing them to exploit its clients. How does
Citibank protect its clients from its strategic partners?
6. Citibank is serving two distinctly different market segments – MNCs
and SMEs. How should Citibank manage the discrepant needs of the
two market segments? What should Citibank do to encourage clients
to move their transactions on-line?

e-Business Transformation – Spring 2009 12

 Part II – e-Business Infrastructure

Session 5 – Feb. 19

e-Business Infrastructure I

Learn about: ƒ e-Business infrastructure in the context of evolving enterprise

technologies
ƒ Building blocks of e-business infrastructure
ƒ Role of emerging technologies in enhancing competitive advantage

Read: ƒ Chapters 4

Prepare Case: The PricewaterhouseCoopers KnowledgeCurve and the Spinning Off

of PwC Consulting

Case Questions: 1. What have been the strengths of PwC’s business up to May 2002?
2. What is the significance of the relationship between the technical
architecture of a knowledge base and competitive strategy?
3. How is the portal different to the KnowledgeCurve framework?
4. What is the significance of the content structure of the knowledge
base to the usefulness and effectiveness of the portal?
5. When choosing between the different integration options for
migrating from the legacy infrastructure to the portal, what factors
should influence PwC Consulting’s decision?
6. What should be PwC Consulting’s interim solution in view of the
IPO scheduled for August and the release of the portal in Q4?

e-Business Transformation – Spring 2009 13

 Session 6 – Feb. 26

e-Business Infrastructure II

Learn about: • Role of integration in successful e-business transformation

• Security consideration
• Emerging technologies

Read: ƒ Chapters 5

Prepare Case: Alibaba.com (ACRC case)

Case Questions: 1. In light of Alibaba.com’s IPO, what is a good time for entrepreneurial
start-ups to go public?
1. How should Alibaba.com optimise its use of proceeds from the IPO?
2. Having gone through the IPO, what should the next steps be for a
company like Alibaba.com?
3. What would be the possible constraints facing the company?

e-Business Transformation – Spring 2009 14

 Part III – e-Business Process Management

Session 7 - March 12

Enterprise Planning Systems

Learn about: • ERP in the context of e-business

• ERP as the backbone of a firm’s information capability
• Role of ERP in improving operational efficiency
• Importance of process integration and synchonisation

Read: ƒ Chapters 6

Prepare Case: SAP Platform Strategy (ACRC case)

Case Questions: 1. Discuss the essence of SAP’s previous and current strategies.
2. What are the main differences in these strategies?
3. Analyze SAP’s new business design and strategy in details.
4. What are the main features of this new strategy?
5. Assess the key competitors. How would SAP compete with these
players?

e-Business Transformation – Spring 2009 15

 Session 8 - March 19

Customer Relationship Management

Learn about: ƒ CRM as a process

ƒ Benefits arising from CRM processes
ƒ CRM and competitive positioning
ƒ CRM’s strategic and economic value
ƒ Critical value of brand equity in an online environment

Read: ƒ Chapter 7

Prepare Case: Grey Worldwide : Strategic Repositioning through CRM

Case Questions: 1. Analyse the Asian CRM market. What opportunities and threats
could Grey WW-HK/China leverage to enhance its business model?
2. What is your understanding of CRM? How can Grey WW-
HK/China pursue the development of CRM?
3. Compare traditional customer service with CRM. What traditional
business assets can Grey WW-HK/China rely on and how it can
leverage them to capture e-marketing capabilities?
4. How can Grey WW-HK/China redefine client value using CRM;
what differentiation technique should it employ?
5. How can Grey WW-HK/China integrate its back-end and front-end
processes to enable a customer-oriented CRM process based on its
existing business strengths?
6. Build a customer process blueprint that Grey WW-HK/China can
employ to maximise the utility of its existing customer base.
7. Build a framework for Grey WW-HK/China to assess its CRM
strategy and position itself in Asia’s CRM market?
8. Suggest criteria that Grey WW-HK/China should use to measure its
CRM performance, given its business model.

e-Business Transformation – Spring 2009 16

 Session 9- March 26

Supply Chain Management

Learn about: ƒ Traditional supply chains mechanisms

ƒ Key differences between traditional, integrated and collaborative
supply chains
ƒ SCM integration challenges
ƒ Role of SCM metrics in measuring performance

Read: ƒ Chapter 8

Prepare Case: Constructing an e-Supply Chain at Eastman Chemical Company

Case Questions: 1. What is the significance of an integrated supply-chain for Eastman?

2. What are the underlying requirements for integration and what could
be the limitations?
3. Identify the business needs of each company (Eastman and Nagase)
and the systems and business processes that would require
reengineering and integration.
4. What are the options available to Nagase?
5. Evaluate the full benefits that could be gained by both Eastman and
Nagase through ISS and present this as if you were writing an
independent consultant’s report to Nagase.

e-Business Transformation – Spring 2009 17

 Part IV– e-Business Implementation

Session 10 - April 2

e-Business Implementation and Global Considerations

Learn about: ƒ The major issues surrounding the development of a legal framework
for e-business
ƒ The concept of jurisdiction
ƒ Threats to intellectual property rights and ways in which businesses
can protect their IPR
ƒ Digital certificate laws pertaining to electronic transactions

Read: ƒ Chapter 10

Prepare Case: Daksh and IBM: Business Process Outsourcing In India: Part 1

1. Discuss the dynamics of the global BPO industry. What are its key
Case Questions: drivers? Can India sustain its lead as the world’s preferred offshoring
destination?
2. In terms of the lifecycle of an enterprise, describe the progression of
Daksh from inception to maturity. Evaluate the harvest options open
to the founding members and suggest the best way forward.
3. What are the common paradoxes associated with high-growth
industries?
4. What prompted Daksh to sell out to IBM instead of pursuing the
much-publicised IPO?

e-Business Transformation – Spring 2009 18