PhD in IT Strategic Planning for Competitive Advantage Research Presentation on E-Transformation Strategy for the Sri Lankan Garment Industry Shiromi Arunatileka Introduction Information Technology provides a strong foundation for any organisation in handling its strategic level decision making, management level planning and control of operational level activities. With the evolution of the Internet, E-business opens up new possibilities for businesses to carry out the above tasks more effectively. The methods of operations of organisations is changing rapidly with paradigm shifts and new IT/business strategies being introduced everyday . Ad-hoc IT plans in return can push any organisation into bankruptcy. Therefore, the need to introduce and use IT as an effective strategic business tool is very important to beat the competition and successfully achieve the company's business goals. The Sri Lankan Garment Industry The garment and apparel industry of Sri Lanka was selected to carry out the study due to it's significant contribution to the Sri Lankan economy. Within industrial exports in Sri Lanka, textiles and garments became Sri Lanka's largest single item of exports in 1986. Also its contribution to employment generation is very much greater than in other industries. The textiles and garment industry continued to be the largest of Sri Lanka's Industries, which contributed 68% of the industrial exports in 1999. This represents a volume growth of an 8.4 % during the year 1999 (Annual Report 1999, Central Bank of Sri Lanka). The garment sector has around 900 manufacturing units providing direct employment to around 300,000 persons. The dramatic growth in this industry was mainly due to the availability of quotas, comparatively cheap labour, policies of liberalization, tax concessions and incentives. The Multi fibre Arrangement (MFA) introduced quantitative markets to the USA market. The quota system introduced by General Agreement of Trade and Tariff (GATT) in 1994 will phase off in 2004 introducing a restriction-free world trade which would mean 'the survival of the smartest'. The non- quota era will definitely bring new challenges to Sri Lankan Garment manufactures forcing them to achieve high quality, high productivity, fast response time for large range of orders where number of items per order will be much less than at present. Therefore, an effective e-transformation strategy is necessary and crucial for the garment industry at this stage to compete successfully in the international market. Thus we conducted a study of the Garment and Apparel Industry of Sri Lanka to look at what changes are required in their current business processes to achieve a competitive advantage in the global market and how to implement these changes. The study methodology and the outcome The research is on IT utilisation in the garment and apparel industry, the position of the industry today, the international scenario, the need to e-transform, and issues related to e-transformation, and recommends an e-transformation strategy for the garment industry. Three key stages in the e-transformation process are discussed; - The E-Readiness Analysis – study the business processes of the companies to identify the bottlenecks and problems in order to find out how they can be re- engineered and enhanced with IT - Use of the e-transformation road map developed by the University of Western Sydney (UWS), Australia to the companies in the garments industry to gradually make their business processes more effective and also to IT enable them where appropriate. - Application of the steps in the E-transformation process developed by the University of Western Sydney (UWS), Australia and tested with a number of SMEs (Small and Medium Enterprises) in the region of New South Wales, Australia by the UWS development team. Recommendations and conclusion The main objective of the study is to make some recommendations to the garment industry in order to : - Face the international competition successfully with the usage of advance technology to improve on overall productivity - Be aware of the technological advancement in the market such as ERP solutions, B2C/B2B e-commerce, etc. - Have the ability to change from long runs of production to short runs - Accelerate and effectively apply the adoption of e-transformation methodology to companies inn the garment sector for improved productivity, business processes and international and domestic competitiveness - Get the competitive edge in the market using collaborative work with an inter-networked organisation - Identify and eliminate all kinds of bottlenecks in business procedures of organizations and - Improve the ability to exploit opportunities offered by the digital economy and network with other companies in the supply chain. References [1] Annual Report 1999, Central Bank of Sri Lanka [2] Ginige A., Murugesan S., Kazanis P., "A Roadmap for Successfully Transforming SMEs in to E-Businesses", Cutter IT Journal, May 2001, Vol 14. [3] Edwards C., "The Uruguay Round and MFA Quotas: The Textiles and Garment Industries in Sri Lanka – The Next 10 Years, Research Studies, Institute of Policy Studies, May 1996. [4] Industry survey on "IT Penetration in the Garment Industry of Sri Lanka", 2001.