Question

E-business infrastructures have quality specifications and cost-effectiveness/efficiency specifications. Often, certain quality specifications and certain cost-effectiveness/efficiency specifications are mutually exclusive. Select two e-business quality specifications and explain how they may conflict with two e-business cost-effectiveness/efficiency specifications.

Answer 1

The following are the two e-business quality specifications:

Managing performance.

Risk management.

The following are the reasons for e-business quality specification can conflict with two e-business cost-efficiency/effectiveness specification:

Quality assurance standards provide a framework for how an enterprise manages its key activities. The users define an acceptable way to do something, whether to make a product, manage a system or provide a service. Quality assurance criteria are descriptions of the requirements, specifications, requirements, and characteristics which should be regularly achieved by-products, facilities and processes to ensure:

· Their production is in keeping with expectations.

· They're not fit for purpose.

· They respond to their users' needs

Businesses use criteria to meet the quality specifications of their clients, and for a number of other purposes, such as:

· To guarantee the safety and security of its products and services.

· Compliance with the laws, often at a reduced cost.

· Define and monitor internal processes.

· Meet sustainability goals.

Many e-businesses that are dedicated to adopting quality management principles are more capable of:

· Raising their profits.

· Reduce costs or damages across the business.

· The performance is improved.

· Gain access to markets around the world.

· Raising customer satisfaction

Risk management plays an important role in the new online economy in preserving the company and its ability to fulfill its business purpose, not just its IT properties. Risk management is the method of risk recognition, risk assessment, and try to reduce risks to an acceptable standard. Risk management is a key component of an IT protection plan. Management of information and communication technology and IT protection are responsible for ensuring the proper management of technical risks. These threats stem from the different ways in which IT assets are implemented and used, including configuring devices inappropriately or obtaining access to limited software.

Explanation:

The following are the two e-business quality specifications:

· Managing performance.

· Risk management.

Performance Analysis: The method of quantifying business investment efficiency and effectiveness by metrics. Often known as Measuring Performance.

Metrics set: A list of metrics allocated by a higher administrative level to direct, motivate and assess a single person responsible for a particular activity, process, field or function.

Metrics (method): A series of metric sets that provide an entire system for measuring performance

                  

Performance management: setting up and using management's performance evaluation system to help track and control policy, priorities, and behavior to improve organizational performance.

The following are the reasons for e-business quality specification can conflict with two e-business cost-efficiency/effectiveness specification:

Managing performance-

Metrics are the backbone of effective management of output because they show satisfactory and unsatisfactory performance. So the users need to control performance instead of just measuring progress, and that needs an effective system. According to the Chief Data Officers Working Council (2003), seven key characteristics of highest performance management systems are:

· Simplicity- Restricted to a single 10-20 metric tab, displayed in non-technical language.

· Explicit ties to strategy- strongly linked to the process of strategic planning and allows track progress towards key goals and procedures.

· Executive Engagement- Senior business administrators are involved in the process of performance analysis — both its development and its continued use.

· Enterprise-standard metrics: Consistent company-wide metrics are agreed upon. Discussion meetings concentrate on decisions instead of discussing the meanings of metrics.

· Insights: The evaluation system allows for a detailed review of patterns and variation by providing more complexity (detail) as needed on component elements.

· Compensation for the specific manager: Related to the success of the scorecard.

· Expense-effectiveness. The added value the performance improvement system provides exceeds the cost of implementing and using it. The difficulty for management is to allow that so.

The users can use the four-step approach after defining the seven key characteristics of efficient e-business performance improvement systems:

· Ensure sight and mission linkages- Make sure that all e-Business programs are aligned with the purpose and mission of the organization.

· Adjust success targets and metrics- A key point here is that the success targets and metrics need to be explicitly included in the creation of the plan itself and not thrown on being an afterthought.

· Measure and convey the results of success. Goals and metrics indicate of no use when embedded in practice. A main performance improvement task is then to ensure that the performance management requirements collect the metrics as necessary.

· Performance accurate off-target. The most important feature of a performance management program is its ability to bring an action where appropriate.

There are variations between the large corporations and small to medium enterprises or SMEs in implementing performance improvement systems. It is critical for small and medium-sized organizations to be highly selective with the procedures and interventions used, as SMEs are by design fewer resources than major organizations.

The majority of performance management programs concentrate on the business aspects of the undertaking. Analysis of financial metrics including Return On Investment or ROI, Internal Rate of Return or IRR, and Break-Even or BE were not only normal but were often the only numerical indicators used to determine efficiency. A performance management program that uses only financial indicators, however, could be challenging because:

· Financial steps do not necessarily relate specifically to the e-Business policy.

· Exclusive concentrate on ROI may distort the development of strategy and may conflict with many other important goals including repositioning the company or branding the product.

· In general, they are insufficient for new approaches to e-business management that decentralize power and transfer authority down the supply chain. In this way, the e-business employment market becomes much more competitive, with adaptable, dynamic groups of highly qualified, creative, consultant-like staff.

Risk management-

The success of e-business strategy development has its own risks which managers must be aware of and take action to address. The six significant risks of using the Balanced Scorecard or BSC strategy for e-business projects are, as per the Working Council for Certified Information Officers (2003):

· The IT- or technology-centric efficiency view in which the measurement framework is heavily burdened with technology measurements (e.g. web page hits) at the cost of critical business measures (e.g. purchasing, behavior, and revenue).

· Measures that are not significant. This was confirmed by Bourne et al. (2005) in an analytical study that found that the highest-performing parts of the business only invested adequate resources into monitoring and managing related goals and metrics.

· Lack of common metric concepts, which leads to conflicting or misleading performance reports, making it difficult to act.

· Over-reliance on technology, where managers adopt a variety of software-based measures that provide lots of numbers but are not strongly linked to policy or goals.

· No effect on the specific metrics. Metrics that are not related to an individual's results (or at least a particular team) do not create action plans that could be held responsible for any identifiable person or people.

· Use of metrics to create policies, instead of optimizing efficiency. In an effort to ' appear successful, ' some managers set specific targets that seem reasonable and have very little value — that is, fail to connect with one or even more strategic objectives.

Implications for Executives-

· To guarantee that the e-business strategy is connected to vision and purpose and performs in line with the company's goals, managers must keep in mind the following success assessment and management points:

· Managing efficiency is not an afterthought. It requires to be integrated into the action plan for the e-business approach so that performance according to strategic targets can be tracked and if necessary corrected.

· Performance improvement is more than a simple assessment and control (evaluation). This is active, and from moment to moment managers may be forced to make decisions and accept or take corrective action to correct an under standard quality or further expand performance and value.

· The Balanced Scorecard or BSC offers a reasonably balanced approach to ensuring that performance measures are important to the strategic goals. However, the analysis of an appropriate range of stakeholders is a bit low and managers must also consider such in addition to the four main scorecard perspectives used in the BSC.

· The performance improvement risks, such as over-reliance on methods, need to be acknowledged and managers must try to avoid them and, if required, take corrective action.