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  • 1. ITOM 6205: Introduction to E-Business Semester: Fall 2008- Module A Professor: Ulrike Schultze Classroom: Crow 188 378 Crow Tuesday 6:30-9:20pm Tel: (214) 768-4265 Fax: (214) 768-4099 Email: uschultz@mail.cox.smu.edu Office Hours: By appointment Course Web Site: http://faculty.smu.edu/uschultz/itom6205 Course Description & Objectives: This course serves as an introduction to electronic business, that is, the use of network technologies (including the Internet) to facilitate value creation and strategic positioning. As this definition implies, an introduction to e-Business deals with technical issues as well as business or strategic issues. In this course, technical topics include the infrastructure requirements of the Internet (e.g., protocols, standards, and security) and Internet-based applications (e.g., electronic payment systems, search engines and personalization technology). Business strategy topics include business models, online marketplaces, disintermediation of the value chain, web 2.0, the 3-D web, customer co- production, peer production, digital goods, and social networking. The objective of this course is to provide students with conceptual tools for analyzing and assessing the viability of e-Business ventures and Internet-enabled value creation, as well as an understanding of the technology underlying such endeavors. To meet this objective, this course is designed as follows: 1) Business cases: we will discuss a case in each class session. 2) Readings: articles published in management-oriented journals such as Harvard Business Review and Sloan Management Review are assigned for each class session. We will apply theories, concepts and taxonomies from these articles as analytical tools in our case discussions 3) Lectures: to the extent that the technology aspects of the Internet-enabled business models are not an integral part of the case discussion, they will be covered using a lecture-style format. As this course relies extensively on class discussion, a key ingredient to achieving the course objectives is students’ active participation, which in turn relies on students being prepared. It is expected that students read all the readings marked as (required) on the course outline and that they answer the Discussion Questions. Some Additional Reading Recommendations: “Wikinomics: How Mass Collaboration Changes Everything,” by Don Tapscott. “The Long Tail: Why the Future of Business is Selling Less of More,” by Chris Anderson. “Smart Mobs: The Next Social Revolution,” by Howard Rheingold. 1
  • 2. “The Wealth of Networks: How Social Production Transforms Markets and Freedom,” by Yochai Benkler. “Groundwell,” by Charlene Li and josh Bernoff. “The Making of Second Life: Notes from the New World,” by Wagner James Au. Readings: A set of readings is assigned to each class sessions. These readings are available from SMU’s online databases, and are hyperlinked from this syllabus (Ctrl-click on the  symbol) and from the course website. If you are attaching to the online databases from off-campus, you will need to log in by entering your last name and the 14-digit barcode on your student ID card. Your library barcode is a 14 digit number that begins with "22177". Cases: We will be using Harvard Business School cases and notes. You will be able to purchase these from Study.Net. If you have any technical questions regarding the use of Study.Net to access, view, or print your course materials, please send an e-mail to customerservice@study.net. Student Evaluation: Class Participation 20% Co-Production/Peer Production Exercise (group) 20% Write up 15% Presentation 5% 2 Case Write-Ups (group) 20% Take-Home Final Exam (individual) 40 % ------- Total 100% ==== Class Participation: Considering the interactive nature of the class sessions, class participation is an important part of the learning experience in this course. Please make every effort to attend class and to contribute to the discussion. Prepare for each class by reading the assigned material and answering the discussion questions. I take the following into account in grading class participation: - Attendance: If you are not there, you cannot participate. However, to earn partial credit for a class that you cannot attend you may answer the discussion questions in writing. Please note, though, a case write-up will only count towards either class participation or a case write-up. Also, write-up will have to be emailed to me before the class session for which it is due. - In-Class Participation: The following are some guidelines that I use to grade class participation. If you almost never speak up in class or miss several classes, you will receive a participation grade of no higher than a C. If you contribute occasionally but rarely say anything inspired, your participation grade will be 2
  • 3. some sort of a B. The path to an A participation grade involves things like: integrating conceptual materials from the readings and applying them to a case or real-life situation, doing a bit of outside reading/research and applying it to the class discussion, integrating comments made by fellow-students earlier in the discussion, taking substantive issue with a class-mate’s analysis, and generally demonstrating that you have understood the readings. Co-Production/Peer-Production Exercise As a class we will investigate the role of customer-co-production and peer-production in different industries, e.g., travel, newspaper publishing, entertainment (music, movie, gaming), consumer goods, pharmaceuticals, etc. Here are some readings on the topic: - “The Power of Us,” Business Week, June 2005.  - “Online, a Community Gathers to Concoct A Neighborhood Eatery,” Washington Post, July 2008.  - “Reducing the Risk of New Product Development,” Ogawa and Piller, Sloan Mgmt Review, 2006.  - “Co-Opting Customer Competence,” Prahalad and Ramaswamy, Harvard Business Review, 2000.  - “Tapping into the Underground,” Mollick, E., Sloan Mgmt Review, Summer 2005.  - “From Value Chain to Value Constellation: Designing Interactive Strategy,” Normann & Ramirez, Harvard Business Review, 1993  - “Blogs will change your Business,” Business Week, May 2005  - “Blogging: A new Play in your Marketing Game Plan,” Singh, Veron-Jackson & Cullinane, Business Horizons, 2008. (recommended)  - “My Virtual Life,” Business Week, May 2006.  - “The Power of Innomediation,” Sawhney, Prandelli and Verona, Sloan Mgmt Review, Winter 2003.  - “Internet-Based Customer Collaboration: Dyadic and Community Modes of Co- Production,” Schultze, U. & Bhappu, A., in Emerging E-Collaboration Concepts and Applications, Ned Kock (Ed), Idea Group, 2007, pp.166-191. In teams of 3 or 4, students will select an industry and do research on how the Internet (1) is changing the way in which firms are leveraging customers as a resource of information, knowledge and labor, (2) threatens the existing business model, and (3) can be better leveraged in future. In particular, each group will pick a specific industry – or subset of an industry – and address the following issues: 1. Identify three firms in your industry such that each reflects a strategy of high, medium and low customer co-production (and/or peer-production) respectively. In order to justify each firm’s position on your low  high continuum, compare and contrast how customer co- (and/or peer-) production has been leveraged in each firm. 2. Consider the nature of your industry’s products/services and its value-generating business processes in order to comment on the pattern and extent of co-production (and/or peer production) manifest in the industry. In other words, what are the 3
  • 4. features of the product/service and the value-generating processes that either facilitate or hamper the reliance on co- and/or peer-production in your industry? 3. For each of the three firms in your analysis develop a strategy for using customer co- and/or peer-production more optimally in future. 4. Optional Bonus Question: To the extent possible, provide financial information for each of the three firms and speculate about the role that co- (and/or peer-) production has played in each firm’s performance. Write up your findings in a document of no more than 5 pages (double spaced) of text. You may add an unlimited number of exhibits, e.g., tables comparing and contrasting the three firms, in an appendix. Also, prepare a 10-minute presentation to be delivered in Second Life describing and justifying your strategy. Moreover, be prepared to engage in a debate with your peers. Case Write-Ups Discussion questions are outlined for every class session. On two occasions (check course outline for assigned write-ups), you will be required to answer these discussion questions in writing. The case write-ups are to be completed in your groups of 3-4 people, and must be handed in at the beginning of the class for which they are assigned. They should be no longer than 5 double-spaced pages of text; however, you may add an unlimited number of exhibits in an appendix. Such exhibits might include a financial analysis or the application of a framework such a Porter’s Value Chain. Please bear two guidelines in mind when using exhibits:  They should not be generic but specifically applied to the case: don’t present Porter’s Five Forces model unless you populate it with information specific to the case that you are analyzing.  You need to demonstrate their relevance to your argument: reference your exhibits in your write-up. For the most part, the discussion questions are designed to make you integrate course material (e.g., readings) with the cases. Try to apply the concepts, theories and frameworks from the readings to your case write-ups. Furthermore, to deepen your knowledge on the topic on which you are doing a case write-up, you may want to read the recommended material in addition to the required readings. Take-Home Final Exam The final exam will be a take-home, case exam. You will have to purchase the case for this take home exam from Study.Net. The case will be released on the day of the last class session. The questions that you will be asked to answer will be similar to the ones posed as discussion questions throughout the course. The final papers should be typed (no handwritten work will be accepted) and no more than 5 double-spaced pages long. You may append an unlimited number of exhibits as an appendix. You may email your final papers to me or drop a hard copy off in my office or mailbox. 4
  • 5. Policies Use of Laptops in Class Students are permitted to use laptops during the class sessions to: 1) take notes, and 2) do online research immediately relevant to the discussion going on during the class session. I consider it inappropriate for students to email, instant message, surf the web or do homework during class sessions. Since the class is largely based on case discussions, I expect students to minimize the distractions caused by using a laptop. Furthermore, when we have guest speakers, students should limit their use of laptops to note taking. Academic Honesty There are three areas of academic honesty that I would like to stress with regard to this course. These are individual work, group work and plagiarism.  Individual Work: your take-home exam will be graded as your independent, individual work. It is to be written up by each student independently and without any assistance.  Group Work: for group assignments (e.g., Value Chain exercise and case write-ups) it is expected that all students in the group contribute equally. On group work it is assumed that each group member understands, agrees with and is responsible for all group products. This means that you need to avoid too much of a divide and conquer approach. Breaking the group project into a set of individual work products is a breach of academic honesty, just as it is a breach of academic honesty for one group member to do the entire group project.  Plagiarism: In any assignment, if parts of the submitted work rely on other people’s work, this has to be stated clearly. I expect students to reference their work (through footnotes, for instance) to identify the source of ideas, concepts and theories. Religious Holidays I expect students who will miss class due to religious holidays that they wish to observe to inform of the classes they will be missing. I request that I be made aware of them at the beginning of the course. Disability Accommodation If you need academic accommodations for a disability, you must first contact Ms. Rebecca Marin, Coordinator, Services for Students with Disabilities (214-768-4563) to verify the disability and establish eligibility for accommodations. Then you should schedule an appointment with the professor to make appropriate arrangements. 5
  • 6. Course Outline (subject to revision) Date Topic, Readings and Discussion Questions Due Date for … 8/19 Web 2.0: Is a New Strategy for IT Needed? Sign up for Readings: Second - “IT Doesn’t Matter,” N. Carr, Harvard Business Review, Life May 2003. (required)  - “Beyond Enterprise 2.0,” Mangelsdorf, Sloan Mgmt Review, 2007. (required)  - “The New Principles of a Swarm Business,” Gloor & Cooper, Sloan Mgmt Review, Spring 2007. (recommended)  - “Harnessing the Power of the Oh-So-Social Web,” Bernoff & Li, Sloan Mgmt Review, Spring 2008. (recommended)  Case: Wikipedia (required)  Discussion Questions: 1. How would you summarize Carr’s main argument? Given your summary, do you believe that the title of his article is appropriate? If not, what title would you suggest? 2. In what way does Carr’s argument overlap (or agree) with McAfee and Brynjolfsson’s observations about Web 2.0? In what way do they contradict each other? Why? 3. What are the key differences between Nupdeia and Wikipedia that help explain why Nupedia generated so few articles and Wikipedia so many? 4. If you were the administrator who volunteered to close out the AfD process about the “Enterprise 2.0” article, what would your decision be? Why? TechTopic: How the Internet works Technology, Markets and Intermediation First Case Readings: Write-Up Launch Internet Explorer Browser.lnk - “Electronic Markets and Electronic Hierarchies,” T. 8/26 Malone, J. Yates & R. Benjamin, Communications of the ACM, June 1987. (required)  - “The New E-Commerce Intermediaries,” P. Anderson & E. Anderson, Sloan Management Review, Summer 2002. (required)  - “The Long Tail,” C. Anderson, Wired Magazine, 2004. (highly recommended)  Case: Alibris in 2004 (required) 6
  • 7. Date Topic, Readings and Discussion Questions Due Date for … Discussion Questions: 1. Briefly describe how the following concepts (from the Malone et al. article) are evident in the Alibris business model: a. Electronic communication effect b. Electronic brokerage effect c. Electronic integration effect d. Evolution of an electronic market from biased to unbiased to personalized. 2. Apply Anderson & Anderson’s 9-function framework and their predictions about the value-creating capabilities of these functions in the online world to assess the viability and sustainability of Alibris’ business model. 3. Place yourself in 2004, at the end of the case. Imagine you had $500,000 to invest. How much would you have invested in Alibris? Why? Tech Topic: How collaborative filtering works 9/2 B2B Marketplaces Readings: - “The Power of Virtual Integration: An Interview with Dell Computer’s Michael Dell,” J. Magretta, HBR, March/April 1998. (required)  - “Leveraging Internet Technologies in B2B Relationships,” Jap & Mohr, California Mgmt Review, Summer 2002. (required)  Case: Covisint (B): Building an Automotive Supply Chain Exchange (required) Discussion Questions: 1. Covisint’s vision was to develop a Dell-like supply chain for the automotive industry. What will Covisint have to do to fulfill this vision? How likely is its success in this regard? 2. Using the Jap & Mohr framework, into which quadrant(s) would you place Covisint? Based on its location, how would you evaluate its value proposition? 3. How successful is Covisint likely to be in the financial and healthcare industries? Tech Topic: How EDI and XML work 9/6 Optional Second Life Lab Please email instructor if you plan to attend 7
  • 8. Date Topic, Readings and Discussion Questions Due Date for … Time: 12:00-2:00pm Location: 186 Crow 9/9 Two-Sided Network Second Readings: Case Write- - “Strategies for Two-Sided Markets,” Eisenmann, Parker Up and van Alstyne, HBR, 2006. (required)  - “Better Sales Networks,” Üstüner and Godes, HBR, 2006. (required)  - “Six Myths about Informal Networks – and how to Overcome them,” Cross, Nohria and Parker, Sloan Mgmt Review, 2002. (recommended)  Case: LinkedIn (A) (required) Discussion Questions: 1. What is LinkedIn’s value proposition? [Consider using the business model framework discussed during our second session as well as the Üstüner & Godes article in your response.] 2. To what extent can LinkedIn be described as a two-sided network (rather than merely a social network)? Apply key concepts of two-sided networks discussed by Eisenmann et al (incl. vendors, merchants, same-side and cross-side network effects) to the LinkedIn case to illustrate how well these concepts fit LinkedIn’s business model. 3. If you were a member of the LinkedIn board in 2005, which of the two revenue-generating proposals would you support? Why? [To the extent applicable, use the arguments from the two-sided network readings to explain your answer.] TechTopic: How search works 9/16 Platform Competition Readings: - “Winner-Take-All in Networked Markets,” HBS Note, (from Study.Net) (required) Case: Facebook Platform (required) Discussion Questions: 1. Analyze the online social networking market according to the criteria of network effects, multi-homing costs and the demand for differentiated platform functionality (concepts from Eisenmann’s HBS note). Based on your analysis, would you 8
  • 9. Date Topic, Readings and Discussion Questions Due Date for … say that online social networking is a winner-take-all category? 2. Does the OpenSocial Initiative pose a serious threat to Facebook? Should they join it? 3. How can Facebook fulfill its promise to revolutionize advertising and then garner enough ad revenue to justify its $15billion valuation? TechTopic: How secure transactions work 9/23 3D Internet Guest Speaker: Tom Samson, Teamwork Dynamics Readings: - “Reverse Product Placement in Virtual Worlds,” D. Edery, HBR, 2006. (required)  - “Avatar-Based Marketing,” Hemp, HBR, 2006. (required)  - “Are you ready for E-Tailing 2.0?” Hemp, HBR, Oct 2006. (required)  Case: Linden Lab: Opening Second Life (required) Discussion Questions: 1. What opportunities do virtual worlds present for RL (real life) businesses? 2. Should Linden Lab release its server software under an open source license? 3. Would you recommend that Linden Lab pursue virtual world interoperability? Why? Why not? TechTopic: TBA 9/30 Customer Co-Production and Peer Production Co- Production/ Project Presentations in Second Life Peer Discussion Questions – for each group/industry: Production 1. Identify three firms in your industry such that each reflects Write-Up a strategy of high, medium and low customer co- and production (and/or peer-production) respectively. In order Presentation to justify each firm’s position on your low  high (in SL) continuum, compare and contrast how customer co- (and/or peer-) production has been leveraged in each firm. 2. Consider the nature of your industry’s products/services and its value-generating business processes in order to comment on the pattern and extent of co-production 9
  • 10. Date Topic, Readings and Discussion Questions Due Date for … (and/or peer production) manifest in the industry. In other words, what are the features of the product/service and the value-generating processes that either facilitate or hamper the reliance on co- and/or peer-production in your industry? 3. For each of the three firms in your analysis develop a strategy for using customer co- and/or peer-production more optimally in future. 4. Optional Bonus Question: To the extent possible, provide financial information for each of the three firms and speculate about the role that co- (and/or peer-) production has played in each firm’s performance. 10/7 Due Date for Take-Home Exam (by 9:30pm) 10