INMA_A01.QXD

Such alternatives can then be evaluated in terms of their risk against reward. Figure 4.26
shows a possible evaluation of strategic options. It is apparent that with limited resources,
the e-CRM lead generation, partner extranet and customer services options offer the best
mix of risk and reward.
For information systems investments, the model of McFarlan (1984) has been used
extensively to assess the future strategic importance applications in a portfolio. This
model has been applied to the e-commerce applications by Daniel et al. (2001) and
Chaffey (2006). Potential e-commerce applications can be assessed as:

1 Key operational– essential to remain competitive. Example: partner relationship man-
agement extranet for distributors or agents;
2 Support– deliver improved performance, but not critical to strategy. Example: e-CRM
system – personalisation of content for users;
3 High-potential– may be important to achieving future success. Example: e-CRM
system – customer service management;
4 Strategic– critical to future business strategy. Example: e-CRM system – lead genera-
tion system is vital to developing new business.
A further portfolio analysis suggested by McDonald and Wilson (2002) is a matrix of
attractiveness to customer against attractiveness to company, which will give a similar
result to the risk–reward matrix. Finally, Tjan (2001) has suggested a matrix approach of
viability (return on investment) against fit (with the organisation’s capabilities) for
Internet applications. He presents five metrics for assessing each of viability and fit.

The online lifecycle management grid

Earlier in the chapter, in the section on objective setting, we reviewed different frame-
works for identifying objectives and metrics to assess whether they are achieved. We
consider the online lifecycle management grid at this point since Table 4.7 acts as a good
summary that integrates objectives, strategies and tactics.
The columns isolate the key performance areas of site visitor acquisition, conversion
to opportunity, conversion to sale and retention. The rows isolate more detailed metrics
such as the tracking metrics and performance drivers from higher-level metrics such as
the customer-centric key performance indicators (KPIs) and business-value KPIs. In the

STRATEGY IMPLEMENTATION

Figure 4.26Example of risk–reward analysis

Transactional

e-commerce

E-CRM

Personalisation

Online

catalogue

E-CRM

Customer service

E-CRM

Lead generation

Partner

extranet

High

Low

Risk

Low High

Reward