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Eight key digital business strategic decisions

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Part 2  Strategy and applications

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e-CRM system –  lead-  generation system;

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e-CRM system – customer service management;

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e-CRM system – personalisation of content for users;

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e-procurement system for office supplies;

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partner relationship management extranet for distributors and agents;

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social network or customer forum.

Portfolio analysis can be used to select the most suitable digital business projects. Daniel 

et al. (2001) suggest that potential e-commerce opportunities should be assessed for the value 

of the opportunity to the company against its ability to deliver. Similarly, McDonald and 

Wilson (2002) suggest that evaluations should be based on a matrix of attractiveness to cus-

tomer against attractiveness to company.

Tjan (2001) also suggested a matrix approach of viability (return on investment) against 

fit (with the organisation’s capabilities) for Internet applications. He presents the following 

metrics for assessing viability of each application. For ‘fit’ these are:

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Alignment with core capabilities.

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Alignment with other company initiatives.

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Fit with organisational structure.

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Fit with company’s culture and value.

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Ease of technical implementation.

For ‘viability’ the metrics are:

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Market value potential (return on investment).

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Time to positive cash flow.

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Personnel requirement.

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Funding requirement.

When I created the E-consultancy (2008a) report I recommended a form of portfolio analy-

sis (Figure 5.18) as the basis for benchmarking current e-commerce capabilities and identify-

ing strategic priorities. The five criteria used for organisational value and fit (together with a 

score or rating for their relative effectiveness) are:

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Business value generated ( 0–  50). This should be based on incremental financial benefits 

of the project. These can be based on conversion models showing estimated changes in 

number of visitors attracted (new and repeat customers), conversion rates and results pro-

duced. Consideration of lifetime value should occur here.

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Customer value generated ( 0–  20). This is a ‘softer’ measure which assesses the impact of 

the delivered project on customer sentiment, for example would they be more or less 

likely to recommend a site, would it increase their likelihood to visit or buy again?

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Alignment with business strategy ( 0–  10). Projects which directly support current business 

goals should be given additional weighting.

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Alignment with digital strategy ( 0–  10). Likewise for digital strategy.

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Alignment with brand values ( 0–  10). And for brand values.

The cost elements for potential digital business projects are based on requirements for inter-

nal people resource (cost/time), agency resource (cost/time), set-up costs and technical feasi-

bility, ongoing costs and business and implementation risks.