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Title: IT Strategic Planning for Competitive Advantage ETransformation Strategy for the Garment Industry of

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Title: IT Strategic Planning for Competitive Advantage ETransformation Strategy for the Garment Industry of

1
IT Strategic Planning for Competitive
AdvantageE-Transformation Strategy for the
Garment Industry of Sri Lanka

Shiromi Arunatileka
BSc (Hons)in C.S.(SL) MBA(SL)
Lecturer Institute of Computer Technology
University of Colombo Sri Lanka
Scholarship ADB Funded Science and Technology
Personnel Development Project

2
What is IT Strategic Planning for Competitive
Advantage

Usage of Information Technology as a Strategic
Business Tool to gain Competitive Advantage in
dealing with Business Goals Industry pressure
Market Changes Competition Social Economic
Factors etc.

3
Sri Lanka and The Manufacturing
Industry
Population 19.1Mn. Literacy Rate
91.8 (2nd
highest in Asia) Labour Force 6.7
Mn. Life Expectancy 73 yrs.
Source Central Bank of Sri Lanka Board of
Investment (BOI) of Sri Lanka - 1999
4
The Business Environment of a Garment Company
EXTERNAL
Outsourced Companies
Business Partners
Financial Institutions
TQB
INTERNAL
SLAEA
Export Develop.t Board
BOI
Merchandising Production Sample CAD/CAM
Finance HRD Work-study StorageQA IT etc.
Interest groups
Government
Gov.nt Buying Offices
Local and Foreign Suppliers
Dealers
Market
Foreign Buyers
Local and Foreign Competitors
5
Methodology used to Collect Information for the
Industry Study
Visits to 6 factories in SL
Questionnaires to IT Managers of 120 companies
Interview with an IT Manager of a buyer
company in USA
Garment Industry Study
Interviews with CEOs and IT managers other
senior mgrs

Industry related
info. from
Workshops
The Central Bank SL
The journal of SLAEA
Research of IPS
ILO - labour standards
BOI

Web sites of Manufacturers Suppliers and Buyers
6
SWOT Analysis
7
Application of Micheal Porters Five Forces Model
to the Sri Lankan Garment Industry
Bargaining Power of Suppliers
High
V. High
V. High
V. High
Rivalry Among Competitors
Bargaining Power of Buyers
Threat of New Entrants
Threat of Substitutes
Low
Quick Response Systems
Non-Quota Era
8
Critical Success Factors which give the
Competitive Advantage in the Garment Sector

State-of-the-Art Technology

Delivery
On time
Competitive
Pricing
High Quality
High Productivity
Effective Business Processes
9
The Industry Study

Scope and Methodology
Total number of Factories in Sri Lanka 900
Total number of Companies in S L 650
Percentage selected for the Survey 20
The Sampling Technique
Stratified Sampling Technique
Distribution of Factories by Size
Small -282 Medium -445 Large -131 V.Large -33
Sample Selected (20)
Small - 0 Medium - 89 Large - 26 V.Large 7
Responses - (16)

10
The Outcomes of the Survey
11
Mode of Communication

External Mode of Communication
Fax -- Over 75
E-mail -- Over 60
Internal Mode of Communication
By Hand -- Over 80
Phone -- Over 25
E-mail -- Over 10

12
Use of IT to enhance Internal Business Processes
Stage
Industry at a given stage
13
Use of IT to enhance External Business Processes
Stage
Industry at a given stage
14
Where the Companies in the Garment Industry are
in the E-Transformation Roadmap
Basic Website
External Processes
Interactive Site
External Business
E-Commerce Site
IT Sophistication
New Processes
Convergence
Most
Some
Effective Organisation
Effective Team
Internal Business
Internal Processes
Effective Individual
15
Convergence
16
Case Study Garment Manufacturing Company
Business Process Modelling

Business Processes
Customer Order Processing
Raw Material Purchasing
Pre-Production Planning
Resource Allocations
Production Process
Quality Assurance
Despatch Finished Goods
Sample Preparation
Inventory Control
Human Resource Develop.t.

Freight Forwarders handling
Accounts Receivable
Accounts Payable
Staff Recruitment
Payroll
Merchandising
E-Business Sys. Handling
Strategic Decision making
Marketing

17
Business Processes Re Engineering
Management Processes
Customer Satisfaction
Customer Request
Core Processes
Support Processes
18
E Transformation Methodology
Understanding the Global Change
Business Strategy
Responding to Change
Business Goals
Implementing the Change
Business Processes Workflow Technology People
Change Management
Business Process Re-engineering
Enhanced Using IT
19
E Transformation Process Considerations

Think Globally Act Locally- SWOT Analysis
Competitor Analysis PEST Analysis
Change Drivers (IT Driven/ Business Driven)
Make and Sell Sense and Respond
Develop Strategy (Differentiation/Cost
Leadership)
Decide where the enterprise wants to go

Understanding the Global Change

Identify Critical Success Factors Identify Key
Performance Indicators (KPIs)
Survival Sustainability or Growth
B2B B2C CRM SCM ERP MRP etc.
Quality Speed Cost Accuracy Visibility New
Markets

Responding to Change
Implementing the Change
Identify the issues related to business processes
that make a direct impact on the Business goals
Deal with changes in Shared Values Strategy
Staff Skills Structure Systems Style
Identify What Process to Re-engineer How to
re-engineer to improve process Develop Action plan
Develop Technical Solutions Deal with Server
Database Software Applications hardware issues
20
How to E Transform
21
Competitive Strategies for the Industry