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Strategy and e-Business Models
Strategy and e-Business Models
Strategy and e-Business Models
Strategy and e-Business Models
Strategy and e-Business Models
Strategy and e-Business Models
Strategy and e-Business Models
Strategy and e-Business Models
Strategy and e-Business Models
Strategy and e-Business Models
Strategy and e-Business Models
Strategy and e-Business Models
Strategy and e-Business Models
Strategy and e-Business Models
Strategy and e-Business Models
Strategy and e-Business Models
Strategy and e-Business Models
Strategy and e-Business Models
Strategy and e-Business Models
Strategy and e-Business Models
Strategy and e-Business Models
Strategy and e-Business Models
Strategy and e-Business Models
Strategy and e-Business Models
Strategy and e-Business Models
Strategy and e-Business Models
Strategy and e-Business Models
Strategy and e-Business Models
Strategy and e-Business Models
Strategy and e-Business Models
Strategy and e-Business Models
Strategy and e-Business Models
Strategy and e-Business Models
Strategy and e-Business Models
Strategy and e-Business Models
Strategy and e-Business Models
Strategy and e-Business Models
Strategy and e-Business Models
Strategy and e-Business Models
Strategy and e-Business Models
Strategy and e-Business Models
Strategy and e-Business Models
Strategy and e-Business Models
Strategy and e-Business Models
Strategy and e-Business Models
Strategy and e-Business Models
Strategy and e-Business Models
Strategy and e-Business Models
Strategy and e-Business Models
Strategy and e-Business Models
Strategy and e-Business Models
Strategy and e-Business Models
Strategy and e-Business Models
Strategy and e-Business Models
Strategy and e-Business Models
Strategy and e-Business Models
Strategy and e-Business Models
Strategy and e-Business Models
Strategy and e-Business Models
Strategy and e-Business Models
Strategy and e-Business Models
Strategy and e-Business Models
Strategy and e-Business Models
Strategy and e-Business Models
Strategy and e-Business Models
Strategy and e-Business Models
Strategy and e-Business Models
Strategy and e-Business Models
Strategy and e-Business Models
Strategy and e-Business Models
Strategy and e-Business Models
Strategy and e-Business Models
Strategy and e-Business Models
Strategy and e-Business Models
Strategy and e-Business Models
Strategy and e-Business Models
Strategy and e-Business Models
Strategy and e-Business Models
Strategy and e-Business Models
Strategy and e-Business Models
Strategy and e-Business Models
Strategy and e-Business Models
Strategy and e-Business Models
Strategy and e-Business Models
Strategy and e-Business Models
Strategy and e-Business Models
Strategy and e-Business Models
Strategy and e-Business Models
Strategy and e-Business Models
Strategy and e-Business Models
Strategy and e-Business Models
Strategy and e-Business Models
Strategy and e-Business Models
Strategy and e-Business Models
Strategy and e-Business Models
Strategy and e-Business Models
Strategy and e-Business Models
Strategy and e-Business Models
Strategy and e-Business Models
Strategy and e-Business Models
Strategy and e-Business Models
Strategy and e-Business Models
Strategy and e-Business Models
Strategy and e-Business Models
Strategy and e-Business Models
Strategy and e-Business Models
Strategy and e-Business Models
Strategy and e-Business Models
Strategy and e-Business Models
Strategy and e-Business Models
Strategy and e-Business Models
Strategy and e-Business Models
Strategy and e-Business Models
Strategy and e-Business Models
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Strategy and e-Business Models

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  • Definitions 1 Administrative Staff turnover: Number of admin staff leaving divided by number of admin staff at beginning of year. 2 Administrative staff: Employees other than experts. 3 Average professional experience: Experts' average professional experience in number of years.  4 Competence enhancing customers: Share of revenues from customers with projects that Celemi's experts learn from. 5 Customers: categorized under three headings. Number excludes book customers. 6 Education level: Employees at year end with Primary education (“Grundskola”, calculated as =1), Secondary (“Gymnasium” =2) and Tertiary (“Universitet” = 3). 7 Expert turnover: Number of experts leaving divided by number of experts at beginning of year. 8 Experts with tertiary degree: Number of experts with a tertiary degree divided by total number of experts. 9 Experts: Employees working directly with customer projects. Top management are regarded as experts. 10 Five largest customers: Share of revenues from 5 largest customers. 11 Growth in professional competence: Growth over last year in total number of years of professional competence. 12 Image enhancing customers: Share of revenues from customers that improve Celemi's image or gives referrals. 13 Intangible Investments % Value Added: Investments in R&D, Marketing and IT charged as cost in normal P&L, divided by Value Added. 14 Liquid reserves: Cash reserves in number of days, assuming normal business.  15 Net investment Ratio: Investment in tangible fixed assets as % of fixed assets. 16 Net Return on Equity: Profit after 28% tax divided by average equity. 17 Number of employees: Two definitions are used: Average number employed during year for efficiency indicators, year-end numbers for growth/renewal and stability indicators. 18 Organization enhancing customers: Share of revenues from customers that improve Celemi's organization, brings R&D or projects that can be leveraged. 19 Profit Margin: Profit before tax divided by total Revenues 20 Profit/Value added: "Real" Profit divided by Value Added. 21 Proportion of admin. Staff: Number of admin. Staff divided by number of total staff at year-end. 22 Profit Capacity: Profit adjusted for R&D charged as cost in normal P&L. 23 Repeat orders: Share of revenues from customers buying from us also last year. 24 Revenues from new products: Share of revenues from products and concepts launched less than 5 years ago. 25 Revenues per admin. Staff: Total revenues divided by average number of admin. Staff. 26 Revenues per customer: Total revenues divided by total number of customers. 27 Rookie ratio: Number of employees with less than 2 years seniority. 28 Seniority: Number of years as Celemi employees. 29 Solidity: Equity divided by Total Assets. 30 Value Added: The value produced by Celemi's employees after payment to all outside vendors. 31 People Satisfaction Index. Scale 1-6 (highest) 32 Customer Satisfaction Index. Scale 1 - 6 (highest)
  • Service Level Agreement A Service Level Agreement (SLA) is a contract between a network service provider and a customer that specifies, usually in measurable terms, what services the network service provider will furnish. Many Internet service providers ( Internet service provider ) provide their customers with an SLA. More recently, IS departments in major enterprises have adopted the idea of writing a Service Level Agreement so that services for their customers (users in other departments within the enterprise) can be measured, justified, and perhaps compared with those of outsourcing network providers. Some metric that SLAs may specify include: What percentage of the time services will be available The number of users that can be served simultaneously Specific performance benchmark to which actual performance will be periodically compared The schedule for notification in advance of network changes that may affect users Help desk response time for various classes of problems Dial-in access availability Usage statistics that will be provided total cost of ownership TCO (total cost of ownership) is a type of calculation designed to help consumers and enterprise managers assess both direct and indirect costs and benefits related to the purchase of any IT component. The intention is to arrive at a final figure that will reflect the effective cost of purchase, all things considered. When you decide to buy a computer you may go through a TCO analysis: for example, the greater cost price of a high-end computer might be one consideration, but one that would have to be balanced by adding likely repair costs and earlier replacement to the purchase cost of the bargain brand. TCO analysis originated with the Gartner Group several years ago and has since been developed in a number of different methodologies and software tools. TCO analysis performs calculations on extended costs for any purchase - these are called fully burdened costs . For the consumer's purchase of a computer, the fully burdened cost may include costs of purchase, repairs, maintenance, and upgrades. For the business purchase of a computer, the fully burdened costs can also include such things as service and support, networking, security, user training, and software licensing. The TCO has to be compared to the total benefits of ownership (TBO) to determine the viability of the purchase.
  • Provides wireless personalized content and services to customers Flight information, targeted commerce transaction … Generates revenues by distributing content and value-added services to wireless content providers and operators handling their customer care and billing systems developing customized content to meet the needs of their customers increasing their revenue per user through longer airtime and more calls
  • Transcript

    • 1. Strategy and e-Business Models IFIP I3E’2001 Zurich, October 2001 Yves Pigneur HEC Lausanne [email_address] (+41 21) 692.3416
    • 2. Agenda <ul><li>Strategy pages </li></ul><ul><ul><li>Value creation & differenciation </li></ul></ul><ul><li>Business model components > Model 8 </li></ul><ul><ul><li>Product innovation 11 </li></ul></ul><ul><ul><ul><li>Value proposition, target and aptitudes </li></ul></ul></ul><ul><ul><li>Customer relationship 24 </li></ul></ul><ul><ul><ul><li>Feel, serve and protect customer </li></ul></ul></ul><ul><ul><li>Infrastructure & logistics 49 </li></ul></ul><ul><ul><ul><li>Logistics, process and alliances </li></ul></ul></ul><ul><ul><li>Finance & revenu e 66 </li></ul></ul><ul><li>Measure > Me a sure 75 </li></ul><ul><li>Simulation </li></ul><ul><ul><li>Scenarios for uncertainty > Sc e nario 89 </li></ul></ul><ul><ul><li>Case study: mobile commerce > mobile 90 </li></ul></ul>http://inforge.unil.ch/yp/Talk/ifip.htm
    • 3. General context technology Electronic commerce Strategy Business models Industry IT strategy allows Levier to change Allows impact impact Intermediary Community standard infrastructure integration Customer Relationship Product Innovation logistics infrastructures Finance Revenue [Bloch, 1999] Brand Promotion Customer service Costs Diffusion time Learning New products New channels New businesses ... improve reduce create
    • 4. Models and ontologies <ul><li>The Enterprise Ontology > html </li></ul><ul><ul><li>Collection of business terms and definitions (activities, organization, strategy, marketing, time …) </li></ul></ul><ul><li>Toronto Virtual Enterprise Ontology (TOVE) </li></ul><ul><li>Ontology Interchange Language (OIL) </li></ul><ul><ul><li>Primitives for modelling ( frame & logic) and automatic reasoning (consistency) </li></ul></ul><ul><li>Still to conceive for (e-) business models </li></ul>XML is coming
    • 5. Transaction phases Buyer seller The information systems have to support: catalog payment logisti cs After-sale order information Identify product Promote product influence Negotiate Negotiate payment BUY SELL goods Consume Serve information Query Answer Find source Find customer information
    • 6. «How the Internet influences industry structure» [ Porter , 2001 ]
    • 7. Strategic positioning <ul><li>Correct goal </li></ul><ul><li>Attractive value proposition </li></ul><ul><li>Differentiated value chain </li></ul><ul><li>Priorities </li></ul><ul><li>Integration (coordination) </li></ul><ul><li>Continuity (of direction) </li></ul>[ Porter , 2001 ] differentiation Price wars Differentiation Partnerships Control of internal resources Imitation and reproduction (cloning) Differentiated value chain All opportunities Priority and focus Indirect revenue (advertising) Value & direct revenue (higher price) Revenue, market share customer acquisition Profit « ABSENCE OF STRATEGY » STRATEGY
    • 8. Business model Innovation produit Gestion des relations-clients Gestion des infrastructures Aspects financiers Financial aspects HOW MUCH? What is the revenue model ? the profit model ? designed to last? WHO? How to manage relationships with customers , satisfy them and generate revenues to be on the winning side? Customer Relationship WHAT? What is the scope of products and services, its value (its benefits) for the customer, the capabilties to deliver them in an innovating way? Product innovation HOW? How to organize the infrastructure , its resources, the knowledge and the structure of resulting costs , manage the value chain and processes, build alliances to achieve performance ? Infrastructure logistics
    • 9. Rethinking the traditional organization [Hagel, 1999] Product innovation Customer relationship mngt Infrastructure management Economy Culture Competition Speed is the key to be the first on the market Employee centered Battle for talents, low barriers to entry, many small players thrive Economies of scope are key to acquire a large number of customers Highly service oriented customer comes first Battle for scope, rapid consolidation, big players dominate Economies of scale are key for reducing cost in managing large volumes Cost focused stress on standardization efficiency Battle for scale rapid consolidation, a few big players dominate
    • 10. Elements of a business model CUSTOMER personalization distribution community PRODUCT Target Value proposition Capabilties INFRASTRUCTURE Resources Activities/processes Alliances/networks value for resources for Revenue  Value added + Costs Profit On-line sales Electronic markets Info-mediation Value chain Decision processes Markets get a feel serve protect CRM channels dis-intermediation Price
    • 11. Value proposition <ul><li>To characterize product innovation, the value proposition </li></ul><ul><li>defines, </li></ul><ul><li>the actual product or service, and </li></ul><ul><li>the value or benefits perceived by customers of the products and services offered by the firm. </li></ul><ul><li>In the case of e-business this offer naturally includes a strong information system component, principally the Internet. </li></ul>VALUE PROPOSITION CAPABILITES TARGET Targeted customers Competencies, aptitudes Product Innovation
    • 12. Value proposition - examples <ul><li>Facilitate research </li></ul><ul><ul><li>and reduce transaction costs </li></ul></ul><ul><li>Speed up distribution </li></ul><ul><ul><li>particularly digital goods (written, music, image, software) </li></ul></ul><ul><li>Improve the quality of service </li></ul><ul><ul><li>by personalization, for example </li></ul></ul><ul><li>Improve facility and experience of buying </li></ul><ul><ul><li>capitalizing on game aspects </li></ul></ul><ul><li>Improve the transparency of information </li></ul><ul><ul><li>by opening up the information system </li></ul></ul><ul><li>Develop a sense of community </li></ul><ul><ul><li>and improve the diffusion of knowledge, contacts and trust </li></ul></ul><ul><li>Bind complementary products </li></ul>Illustrations ticketless Yield Management Barcelone Loterie Romande reservation easyCar
    • 13. Classification of business models (I) <ul><li>Brokerage Brokerage </li></ul><ul><ul><li>Buy/sell fulfillment, market exchange, business trading community, buyer aggregator, distributor, virtual mall, metamediary, auction broker, reverse auction, classified, search agent </li></ul></ul><ul><li>Advertising Advertising </li></ul><ul><ul><li>Generalized portal, personnalized portal, specialized portal, attention/incentive marketing, free model, bargain discounter </li></ul></ul><ul><li>Infomediary Infomediary </li></ul><ul><ul><li>Recommender system, registration model </li></ul></ul><ul><li>Merchant Merchant </li></ul><ul><ul><li>Virtual merchant, catalog merchant, surf-and-turf, bit vendor </li></ul></ul><ul><li>Manufacturer Manufacturer </li></ul><ul><li>Affiliate Affiliate </li></ul><ul><li>Community Community </li></ul><ul><ul><li>voluntary contributor model, knowledge networks </li></ul></ul><ul><li>Subscription Subscription </li></ul><ul><li>Utility Utility </li></ul>http://ecommerce.ncsu.edu/business_models.html
    • 14. Classification of business models (II) Functional integration Degree of innovation lower higher Single functions Integrated function e-shop e-procurement e-mall e-auction Info brokerage Trust service value chain service provider Virtual community Collaboration platform Third party marketplace Value chain integrator Le Shop Saci Buy.com Ricardo Swisskey Reuters FedExp Intership iVillage AssureNet Gofish eMerge Business-to-business [Timmers, 1998]
    • 15. Classification of business models (III) Integration AGORA eBay, PriceLine … ALLIANCE AOL, iVillage … AGGREGATION Amazon, Chemdex … VALUE CHAIN Dell, Cisco … low high Control hierarchy auto-organization Dynamic pricing creativity Process integration Selection and convenience [apscott, 2000] Distributive network FedExp, UPS …
    • 16. Classification of business models (IIIb) [apscott, 2000] www2. actnet . com / pdf /2410671. pdf
    • 17. Classification of business models (end) Influence of seller low high Influence of buyer low high POWER Electronic barter Swap Barter Alaxis Online sale Products: Amazon LeShop Brun Passot Services: AutoWeb E*trade easyJet aggregation: EMB Online buy Portals: AOL, Yahoo Zdnet Group buying: Cendant Mercata Accompany Pressure of seller Pressure of buyer competition cooperation Electronic market search : Acses auction: eBay PriceLine Ricardo plate-form: TPN Register, linkom goFish
    • 18. Multi-role models - syndication <ul><li>Delivery of an information that will be reused and integrated in an other one, </li></ul><ul><li>for a payment generally in the form of a subscription </li></ul><ul><li>with a complicated content management </li></ul><ul><li>> ICE </li></ul>[Werbach, 2000] product infrastructure customer iSYNDICATE 1’200 editors 270’000 sites web Illustrations Inktomi Quote.com Create the content SOURCES iSyndicate Linkshare (e-comm) Screaming Media Assemble the content Manage the relationship between the sources and the distributors SYNDICATORS Women.com Yahoo! E*Trade Deliver the content to the consumers DISTRIBUTORS Internet Explore the content Create revenues by subscription, payments or advertising Missions CUSTOMER ROLE
    • 19. Multi-function model & ASP <ul><li>Complete coverage of process or a value system </li></ul><ul><li>Deep knowledge of the profession </li></ul><ul><li>High added value </li></ul><ul><li>High differentiation </li></ul><ul><li>ASP (application service provider) </li></ul>Illustrations Target Value proposition Aptitudes professional multiple difficult
    • 20. Multi-technology model – wireless <ul><li>Voice </li></ul><ul><li>Internet </li></ul><ul><li>WAP </li></ul>Auctions Portals Illustrations
    • 21. Multi-member model – P2P Illustrations [Gartner, 2001] <ul><li>Atomistic </li></ul><ul><li>User-centered </li></ul><ul><li>Data centered </li></ul><ul><li>Compute-centered </li></ul><ul><li>Web mk2 </li></ul>
    • 22. Capabilities VALUE PROPOSITION Capabilities TARGET Customers Competencies [Bagchi, 2000] capability
    • 23. Capabilities Network <ul><li>A capability depends on another </li></ul><ul><li>When its performance depends on the another’s </li></ul>[IBM, 1999] Forum with authors attract people
    • 24. Part II - Customer Relationship CUSTOMER personalization distribution community PRODUCT Target Value proposition Capabilties INFRASTRUCTURE Resources Activities/processes Alliances/networks value for resources for Revenue  Value added + Costs Profit On-line sales Electronic markets Info-mediation Value chain Decision processes Markets get a feel serve protect CRM channels dis-intermediation Price
    • 25. <ul><li>Interactive order by the customer </li></ul><ul><ul><li>selection of the model, personalization, receiving of price, receiving of a confirmation </li></ul></ul><ul><li>delivery of the model </li></ul><ul><ul><li>without having it in stock, by assembling the order, on time with a minimum cost </li></ul></ul>Feel and serve customer In-house core competencies Rigid processes Products/ services channels Customers Manufacture and sale products Customers’ needs Integrated channels Products/ services Flexible processes Outsourcing/ In-house competencies Feel and serve customers Build to order [Kalakota, 2001] Customer relationship
    • 26. CRM – Customer Relationship Management MARKETING SALES SERVICE <ul><li>Customer care </li></ul><ul><li>Call center, messaging, web … </li></ul><ul><li>Self-service </li></ul><ul><li>Pro-active, quality of service, … </li></ul><ul><li>Sales force (SFA - Sales Force Automation) </li></ul><ul><ul><li>Prevision, contacts, estimate, proposition, follow up … </li></ul></ul><ul><li>Convert a visitor to a customer and keep the customer </li></ul><ul><li>initiative, campaign </li></ul><ul><li>from telemarketing to messaging </li></ul><ul><li>one-to-one marketing </li></ul><ul><li>personalization </li></ul>Customer Base
    • 27. Dis-intermediation Cost (shirt) % profit [Benjamin, 1995] serve Added value Customer Retailer Distributor Producer $20.91 $11.36 $20.45 Price $52.72 $31.81 $20.45 $52.72 Producer Retailer Distributor Customer $52.72 0% Producer Customer Retailer Distributor $41.34 28% Producer Customer Retailer Distributor $20.45 62%
    • 28. Functions of intermediaries <ul><li>Facilitate </li></ul><ul><li>Matching between an offer and a demand </li></ul><ul><li>the research of products (& their sellers) </li></ul><ul><li>the aggregation of products (& of sellers) </li></ul><ul><li>the aggregation of customers (& and their needs) </li></ul><ul><ul><li>buying clubs, customer associations, group buying </li></ul></ul><ul><li>the protection of the private sphere and the management customer profiles </li></ul><ul><li>putting sellers under pressure </li></ul><ul><li>evaluation of needs and the suggestion of the adequate product </li></ul><ul><li>the management of risk (insurance) </li></ul><ul><li>the distribution of the articles </li></ul><ul><li>the diffusion of information on products </li></ul><ul><li>influence on the buying act (Marketing) </li></ul><ul><li>the transmission of information about the customer </li></ul>Intermediaries improve the efficiency of the exchange between producers and consumers, by aggregating transactions and creating economies of scale or scope
    • 29. Distribution channels Airline Travel Agency Reservation S. Illustrations [Klein, 2001] 80% by Internet! Otopenia …
    • 30. Scenarios for intermediation [Sakar, 1995] tc PC < tc PI + tc IC tc PC > tc PI + tc IC tc’ PC < tc’ PI + tc’ IC tc’ PC > tc’ PI + tc’ IC Supplier Consumer Intermediary tc PI tc IC tc PC Pre-internet Post-internet The intermediaries augmentthe efficiency of the exchanges between suppliers and consumers, When they aggregate transactions for creating scale or scope economies IV. Intermediary reinforce by the Internet re-intermediation III. Cyber-mediairy extra-intermediation II. Threatened intermediary dis-intermediation I. Direct market reinforced by Internet ultra-intermediation
    • 31. Intermediaries More expensive with intermediary Cheaper with intermediary Pre-internet Post-internet Expedia … Illustrations More expensive with intermediary Cheaper with intermediary [Sakar, 1995] standard ultra-intermediation extra-intermediation dis-intermediation re-intermediation IV. Intermediary reinforce by the Internet III. Cyber-mediary II. Threatened intermediary I. Direct market reinforced by the Internet
    • 32. Moves of threatened intermediaries tc PC < tc PI + tc IC tc’ PC < tc’ PI + tc’ IC tc’ PC > tc’ PI + tc’ IC Pre-internet Post-internet [Scott, 2000] tc PC > tc PI + tc IC IV. Intermediary reinforce by the Internet > SCOTT III. Cyber-mediary > SCOTT II. Threatened intermediary > SCOTT I. Direct market reinforced by the Internet > SCOTT Integration capabilities (direct access) Perpetual innovation capabilities (new entrants, spin-off ) Collaborative SCM capabilities (virtual enterprise)
    • 33. Distribution channel conflict <ul><li>For established companies (incumbents, bricks-and-mortars) </li></ul><ul><li>Risk of cannibalization </li></ul><ul><li>Difficulty to reconcile to ways of selling </li></ul><ul><ul><li>on the sales force level </li></ul></ul><ul><ul><li>Compaq and its resellers and the advent of direct sales </li></ul></ul><ul><li>Former competencies, advantage or disadvantage? </li></ul><ul><ul><li>unusable or contra-productive, in case of radical innovation </li></ul></ul><ul><ul><li>Capitalization possible, if innovation incremental </li></ul></ul><ul><li>QUESTION: start doing e-commerce : </li></ul><ul><ul><li>Integrated entity? </li></ul></ul><ul><ul><li>Separated company? </li></ul></ul>[Afuah, 2001]
    • 34. Personalization feel 2 3 4a 5 4b Establish the configuration Planing of production Listen to the customer One-to-one Mass-customization Distribution CRM Production (internal) ERP Outsourcing (external) SCM
    • 35. Mass customization stable dynamic stable dynamic Change of processes Change of product Mass production Continuous amelioration Mass customization Invention [Piller, 2000] Production of a product or service for a large market which satisfies the needs of every single customer on one or the other characteristic of the product at a cost close to mass production
    • 36. One-to-one marketing <ul><li>perceive every customer as an individual </li></ul><ul><li>win his confidence and loyalty (and keep it for a long time) </li></ul><ul><li>by satisfying his needs in a personalized way </li></ul><ul><li>on the basis of information you have on the customer </li></ul><ul><ul><li>without abusing </li></ul></ul><ul><li>in the line of direct marketing and database marketing </li></ul>Attract retain start dialogue Motivate action Conduct transaction [Peppers, 1993]
    • 37. Personalization strategies in e-business low high low high Degree of digitalization of customized components Degree of customer integration required [Piller, 2000] Housing www.streif.de Computer www.dell.com Fitness www.efit.com Cosmetics www.reflect.com Jewelry www.expressions.com Flowers 1.800-flowers.com Ski www.myski.com Configuration Innovation Add-on Attention Watches www.idtown.com Print www.iprint.com Video www.kideo.com Press www.individual.com
    • 38. Recommending techniques <ul><li>Non-Personnalized Recommendations </li></ul><ul><ul><li>Same for all the customers </li></ul></ul><ul><ul><li>Based on customer’s notices </li></ul></ul><ul><li>Attribute-Based Recommendations action-to-item affinities </li></ul><ul><ul><li>Based on syntactical elements (search) </li></ul></ul><ul><li>Item-to-Item Recommendations item-to-item affinities </li></ul><ul><ul><li>Based on the products the customer was interested in or bought </li></ul></ul><ul><li>People-to-People Recommendations people-to-people affinities </li></ul><ul><ul><li>Based on other customers advice who had a previous similar commercial behavior </li></ul></ul><ul><ul><li>Collaborative Filtering (correlation) </li></ul></ul><ul><li>Entrées: buy data | Ranking [likert] | Text | Choice </li></ul>[Schafer, 1999]
    • 39. Taxonomy for recommending techniques manual automatized Automatization (intervention of customer) Ephemeral (one session) persistent (many sessions) persistency [Schafer, 1999] <ul><li>Non-Personalized </li></ul><ul><li>Attribute-Based </li></ul><ul><li>Item-to-Item </li></ul><ul><li>People-to-People </li></ul>Non-Personalized Customer comments Amazon Delivers Attribute-Based Customer who Bought Item-to-Item Book Matcher People-to-People
    • 40. <ul><li>Suggest a personalized content </li></ul><ul><li>maintain a privileged relation with the customer </li></ul><ul><li>preserve a track of each visit and a customer profile </li></ul><ul><li>manage an individualized interaction </li></ul><ul><ul><li>promotion, action, catalogue, historic, ... </li></ul></ul><ul><ul><li>from business rules (if … then) </li></ul></ul><ul><ul><li>and from the client's profile </li></ul></ul><ul><ul><li>without interfering (too much) with his private life </li></ul></ul>Recommending system – rule based Conversion prospect  client
    • 41. Recommending system - Collaborative filtering <ul><li>anticipate customers needs </li></ul><ul><ul><li>recommend products </li></ul></ul><ul><li>from his preferences </li></ul><ul><ul><li>as if we knew him for a long time </li></ul></ul><ul><li>and from preferences of other clients with similar tastes </li></ul><ul><ul><li>word of mouth & correlation (if you liked this, then you should also like this …) </li></ul></ul><ul><ul><li>learn by experience </li></ul></ul><ul><ul><li>agents (intelligent) </li></ul></ul><ul><ul><ul><li>big mass of information </li></ul></ul></ul>rating Catherine and Fabian seem to have a similar judgement to Isabelle's for the books 1, 2 (& 3); their rating (explicit) is used for Isabelle's (implicit) for the book 4: between 4 and 5
    • 42. Comparaison [Fink, 2000]
    • 43. Trust protect TRUST SECURITY PRIVACY Contribute to the establishment of Fear: financial losses Fear: loss of intimacy INFO- MEDIARY COMMUNITY Contribute QUALITY BRAND Notoriety … Certification Verification et authorization Escrow Notary, payments Expertise Guarantee of quality Rating Reputation of actors Insurance Risk management Conflict Conflict resolution
    • 44. Trust factors [McKnight, 2000] TRUST propensity To trust mechanisms 3d party seal Reputation Perceived quality Of the meerchant Of web site de confiance For trust (encryption …) intention belief of e-business Exploratory phase To buy To trust Web experience Commitment phase
    • 45. Community <ul><li>Group of people or entities </li></ul><ul><ul><li>that share values or interests </li></ul></ul><ul><ul><li>and use the le Net regularly & at the same place </li></ul></ul>transaction Business, trading, occasions, barter … interest Idea sharing, communication … fantasy Role games, fantasy world… relation Assistance (disease), sharing of experiences … [Hagel, 1997] Put pressure on sellers Meeting of sellers/buyers Target customers Buy Union (mass) Market mix (informed) Barter New age (unselfish, elitist) Sale target (spendthrift)
    • 46. Types of communities Community virtual [Schubert, 1999] Community interest Community business Community leasure Community internet Community network Community research Community relationhip Community fantasy Community merchant Community transaction Community commerce SkiRando Ultima Online EMB Ricardo TPN Register ISworld Social interest Commercial interest goal media
    • 47. <ul><li>one-to-tribe marketing </li></ul><ul><li>target a group statistically homogenous </li></ul><ul><li>so that the member of the community feels the company </li></ul><ul><li>and can discuss with his congeners </li></ul><ul><li>to avoid the isolation feeling due to personalization </li></ul><ul><li>from profiles (mimetic) </li></ul><ul><ul><li>in considering the eventual </li></ul></ul><ul><ul><li>demultiplication of personalities </li></ul></ul><ul><li>model of the television (themes) ? </li></ul><ul><ul><li>we watch programs </li></ul></ul><ul><ul><li>we assist events </li></ul></ul><ul><ul><li>we comment them in groups </li></ul></ul><ul><ul><li>in real time … </li></ul></ul><ul><li>major stake for media groups </li></ul>Community and marketing One-to-Tribe One-to-One
    • 48. <ul><li>Datawarehouse and data mining </li></ul><ul><ul><li>to study client behavior and anticipate his needs </li></ul></ul><ul><li>The client grumbles when the vendor exaggerates (or doesn't explain) </li></ul><ul><li>But the client gives information if he is « rewarded » (miles, …) </li></ul><ul><ul><li>loyalty program (M-CUMULUS, Qualifyer, …) </li></ul></ul><ul><li>This information belongs to the client </li></ul><ul><ul><li>Cookies & web, Intuit , SmartCard (CASH)… </li></ul></ul><ul><ul><ul><li>allows tracking the client's behavior on DIFFERENT sites </li></ul></ul></ul><ul><ul><ul><li>unlike loyalty cards (specific to a shop) </li></ul></ul></ul><ul><ul><li>he can reinforce it </li></ul></ul><ul><ul><li>sell it or authorize - or not - access to vendors </li></ul></ul><ul><ul><li>leave it to an intermediary for a good use ... </li></ul></ul>Battle for information & privacy PASSEPORT ( OPS )
    • 49. <ul><li>Receives, merges and manages the buyers information </li></ul><ul><li>protects the buyer </li></ul><ul><li>supplies information to vendors </li></ul><ul><li>puts the vendors under pressure </li></ul><ul><li>obtains advantages for the buyer on the behalf of the vendors </li></ul><ul><ul><li>for the information given to the vendors </li></ul></ul><ul><li>prefigured by Portals , buying clubs, associations of consumers … </li></ul><ul><li>requires skills and rare technologies </li></ul><ul><li>Who can become info-mediary? </li></ul><ul><ul><li>Fiduciaries </li></ul></ul><ul><ul><li>Merchants </li></ul></ul><ul><ul><li>buying clubs & consumer associations </li></ul></ul><ul><ul><li>databases </li></ul></ul><ul><ul><li>media, portals, … </li></ul></ul>Infomediary brand trafic emotion [Hagel, 2000]
    • 50. Part III - Infrastructure management CUSTOMER personalization distribution community PRODUCT Target Value proposition Capabilties INFRASTRUCTURE Resources Activities/processes Alliances/networks value for resources for Revenue  Value added + Costs Profit On-line sales Electronic markets Info-mediation Value chain Decision processes Markets get a feel serve protect CRM channels dis-intermediation Price
    • 51. Infrastructure and logistics Infrastructure management Computerized system Buyer seller catalog payment logistics After-sale order logistics standards information Identify product Promote product influence Negotiate Negotiate payment BUY SELL goods Consume Serve information Query Answer Find source Find customer information
    • 52. Reference model IT infrastructure Information services search directories online catalogs product evaluation request for proposal conditions Business models Agreement services contracting brokerage exchange e-market setting prices negotiation Settlement services authentication certification escrow logistics payment dispute resolution [Schmid, 1997]
    • 53. Standards - XML <ul><li>Collection of business components (product, supplier, order, …) </li></ul><ul><li>and standard processes (fulfillment, invoicing, delieving …) </li></ul><ul><li>XML tags for inter-application exchanges </li></ul><ul><ul><li>EAI, B2B, … </li></ul></ul><ul><ul><li>EDI legacy (ISO codes, X12 components) </li></ul></ul><ul><li>bizTalk </li></ul><ul><ul><li>By Microsoft </li></ul></ul><ul><ul><li>Simple Object Access Protocol ( SOAP ) </li></ul></ul><ul><li>Common Business Library (CBL) </li></ul><ul><ul><li>By CommerceOne </li></ul></ul><ul><li>Commerce XML (cXML) </li></ul><ul><ul><li>By Ariba </li></ul></ul><ul><li>and also Bolero, IOTP, OAGIS, OCF … </li></ul>Scénario ABC [Haifei Li, 2000]
    • 54. Standards - ebXML Initiative OASIS & UN-CEFAC (Edifact) UML TPA Trading Partner Arrangement
    • 55. CONTRAT Trading Partner Agreement (TPA) [Dan, 2001]
    • 56. Logistics: the hidden face of e-commerce <ul><li>Shop </li></ul><ul><ul><li>department and/or stock (eventually separated) </li></ul></ul><ul><li>Franchise or partnership </li></ul><ul><ul><li>fragmented sector: multitude of small shops </li></ul></ul><ul><li>Multi-channel distribution center existing </li></ul><ul><ul><li>mail order business with a certain volume </li></ul></ul><ul><li>Ad hoc distribution centers </li></ul><ul><ul><li>mail order business with a high volume </li></ul></ul><ul><li>and also </li></ul><ul><li>Virtual warehouse (partnership with third party) </li></ul><ul><ul><li>outsourcing </li></ul></ul><ul><ul><li>use of distribution centers FedEx , for ex. </li></ul></ul><ul><li>Direct sending by manufacturer </li></ul><ul><ul><li>outsourcing </li></ul></ul><ul><ul><li>integration of information systems </li></ul></ul>resources transportation warehousing [Kalakota, 1999]
    • 57. Order fulfillment (warehousing) centralized distributed self-operated outsourced Structure Operation Dedicated Fulfillment Center Distributed Delivery Centers Third-Party Fulfillment Center Partner Fulfillment Opération Build-to-order Manufacturer Direct Shipment In-store [Kalakota, 1999]
    • 58. Changing the warehousing approach centralized distributed in house outsourced Structure Operation Dedicated Fulfillment Center Distributed Delivery Centers Third-Party Fulfillment Center Partner Fulfillment Opération Exemples Volumes Investment Flexibility
    • 59. Value chain & activities infrastructure Human resources Technology development Procurement inbound logistics production outbound logistics marketing & sale After-sale Main activities Support activities Value activities e-SCM e-procurement e-alliance
    • 60. Configuration of activities [ Revaz , 1995 ]
    • 61. Value-oriented model FAP f 1 Possible contact s1 s1 Contact searcher c 1 Ad Association Read ad $ $ Ad $ Ad $ Checkedad Ad $ Ad $ Submitted ad Read an ad Submit a n ad Publish an ad Place an ad Distribute an ad Check an ad [Gordijn, 2000] Legend: Actor Value exchange Flows: AND Scenario delimiter Scenario Path (x) OR (x) <ul><li>Solution: </li></ul><ul><li>The FAPs offer the service. </li></ul><ul><li>The Ad Association redistributes the ads. </li></ul><ul><li>FAPs add most value </li></ul>Value activit y Value interface Value port <ul><li>Place an ad </li></ul><ul><li>Read an ad </li></ul><ul><li>Redistribute an ad </li></ul>
    • 62. Value-oriented model – second configuration [Gordijn, 2000] Flows: <ul><li>Redistribute an ad </li></ul>Possible contact s1 s1 Contact searcher c 1 Ad Association Read ad $ $ Ad $ Checkedad Brand $ Submitted ad Read an ad Submit a n ad Publish an ad Place an ad Maintain brandname Check an ad FAP f 1 Check an ad Legend: Actor Value exchange AND Scenario delimiter Scenario Path (x) OR (x) <ul><li>Solution: </li></ul><ul><li>The Ad Association performs most activities. </li></ul><ul><li>The Ad Association adds most value </li></ul><ul><li>Shift in power </li></ul><ul><li>Read an ad </li></ul><ul><li>Place an ad </li></ul>Value activit y Value interface Value port
    • 63. Value-oriented ontology [Gordijn, 2000] assigned- to has-in between contains requests offers Value interface Value port Value exchange Value offering Value object has-out 1..n 0..1 0..n 0..n 1 1 0..n 0..n 2..n 0..n 1..n 1 Value activity 1..n 0..1 has assigned-to 1 1..n Composite Actor Elementary Actor decomposed-into is-a is-a 2..n 0..n Actor with similar Market segment 1..n 0..n Composite Object Elementary Object decomposed-into is-a is-a 2..n 0..n
    • 64. Coordination (& integration) Order processing Order confirmation Planing of realization destocking loading Planing delivery Customer service Prevision Planing of stock Planing of capacity MRP choice supplier Availability stock Scheduling Stock allocation order of priorities Scheduling manufacturing Scheduling distribution Process Order planning Process Replenishment Process Production & assemblage Process Distribution <ul><li>profitable? </li></ul><ul><li>available in the inventory? </li></ul><ul><li>can be manufactured? </li></ul><ul><li>integration with shipping companies </li></ul><ul><li>tracking by the customers </li></ul><ul><li>return of goods </li></ul><ul><li>flexibilityy </li></ul><ul><li>integration </li></ul><ul><li>BPR (business process reengineering) </li></ul><ul><li>INTEGRATION WITH ERP & SCM </li></ul>[Kalakota, 2001] processes
    • 65. Alliances et partnerships Author marketing Distributor inventory Amazon.com sales Information systems coordination contents Shipping transport tracking Affiliate sales Customer buy content Bank payment deliver deliver order sale order sales critics Credit card clearance returns alliances
    • 66. Electronic Data Interchange (EDI) ECR EDI Efficient customer Response from to Order BUY Reception Payment Company A Supply SALE Delivery Invoicing Company B Bank A Bank A Clearing selection, comparaison, ... order or statistics Delivery invoice paiement confirmation Before sale sale production & distribution After-sale
    • 67. Vendor-managed inventory (VMI) Manufacturer VMI - DC VMI - DC VMI - DC Fabr. - DC [Waller, 1999] Retailer Retailer Retailer 3d party - DC Retailer Retailer Retailer Retailer Retailer DC = distribution center Collaborative Planning, Forecasting, and Replenishment (CPFR)
    • 68. E-market <ul><li>AGGREGATION </li></ul><ul><li>MATCHING </li></ul><ul><ul><li>Identify sellers and buyers </li></ul></ul><ul><ul><li>Matching their needs </li></ul></ul><ul><li>FACILITATION </li></ul><ul><ul><li>facilitate the transactions </li></ul></ul><ul><ul><ul><li>bargaining </li></ul></ul></ul><ul><ul><li>manage the commitment </li></ul></ul><ul><ul><li>garantee trust </li></ul></ul>[Dai, 2000]
    • 69. e-SCM, e-procurement and e-market supply chain Power of buyers  Reduced transaction costs Improved information access group buying … Reduced selling costs bigger market access Dis-intermediation … Power of suppliers  Customers’ needs Integrated channels Products/ services Flexible processes Outsources/ In-house competencies procurement Electronic market suppliers buyers Market Vs. relation
    • 70. Strategic network Production cost Coordination cost low high low high [Malone, 1993] United Color of Benetton HIERARCHY MAKE Supply chain MARKET BUY NETWORK Co-production partnership Externalization Virtualization Holding
    • 71. Part IV - Finance CUSTOMER personalization distribution community PRODUCT Target Value proposition Capabilties INFRASTRUCTURE Resources Activities/processes Alliances/networks value for resources for Revenue  Value added + Costs Profit On-line sales Electronic markets Info-mediation Value chain Decision processes Markets get a feel serve protect CRM channels dis-intermediation Price
    • 72. Value creation <ul><li>«The creation of an economic value stays the measure of success» </li></ul><ul><li>PROFIT </li></ul><ul><li>  = (P – V C ).Q – F C </li></ul><ul><ul><li>P the unit price of a product </li></ul></ul><ul><ul><li>V C the variable cost of a unit </li></ul></ul><ul><ul><li>Q the number of products sold </li></ul></ul><ul><ul><li>F C fixed costs </li></ul></ul>Aspects financiers
    • 73. Income models REVENUE one time recurrent sale registry subscription advertisement use Income of the subscription fees to become a member Paid by the buyer and/or the vendor transaction commission Income, percentage of a transaction made by the settlement (affiliate program) Income of online sales paid by the buyer Income of the ad banners posted on the shopfront Paid by the vendor <ul><li>Phone </li></ul><ul><li>registry </li></ul><ul><li>subscription </li></ul><ul><li>Usage </li></ul><ul><ul><li>Time </li></ul></ul><ul><ul><li>Services </li></ul></ul>combination
    • 74. Income models - examples buy : advertisement subscription commission market : commission subscription ad barter : - advertisement subscription sale : transaction commission ( intermediary ) Commission, Subscription, ad Auctions ( eBay ) Subscription, ad, commission Buying clubs ( cendant ) Commission Affiliation ( millicent ) Transaction (content) Infomediation ( netZero ) Transaction (sale) Online sale ( Dell ) Subscription, ad, sponsoring Virtual community ( iVillage ) Revenue model Business models
    • 75. Pricing - Dutch Flower Auction [Kambil, 1999] Illustration
    • 76. Auction software - objects [Kumar, 1999]
    • 77. Auction software - process [Kumar, 1999]
    • 78. <ul><li>Based on </li></ul><ul><ul><li>catalog </li></ul></ul><ul><ul><li>negotiation between the seller and the buyer </li></ul></ul><ul><ul><li>auction </li></ul></ul><ul><ul><li>request for proposal (RFP) </li></ul></ul><ul><li>« good bye to fixed pricing » ? </li></ul><ul><ul><li>Suppliers enjoy price differenciation in order to avoid comparison </li></ul></ul><ul><ul><li>Customers enjoy low price and gaming using comparison </li></ul></ul><ul><li>Yield Management </li></ul><ul><li>Allows to calculate in real time (online if on the Internet) </li></ul><ul><li>the best prices </li></ul><ul><li>for maximazing the profit generated by the sales </li></ul><ul><li>based on a forecasting model of sale behavior (for micro-segments) </li></ul>Transforming the pricing [Klein, 2000] Yield Management
    • 79. Yield Management <ul><ul><li>Air Transportation ( American Airline since 1978 + 1.4 billion in 1989-1991) </li></ul></ul><ul><ul><li>Hotel industry ( Marriott + 30 million en 1991) </li></ul></ul><ul><ul><li>Car renting ( Hertz 1989 ) </li></ul></ul><ul><ul><li>Leisure parc ( Futuroscope ) </li></ul></ul><ul><ul><li>Rail road ( TGV Suisse-Paris) </li></ul></ul><ul><ul><li>Cyber-cafe ( EasyEverything ) </li></ul></ul>[ Phillips , 2000]
    • 80. Yield Management - conditions <ul><li>Perishable product </li></ul><ul><ul><li>No value after a given date (seat onboard, room, …) </li></ul></ul><ul><li>Variable demand and rigid production capacity </li></ul><ul><ul><li>Demand changes (high, low, …) </li></ul></ul><ul><ul><li>Offer is fixed </li></ul></ul><ul><li>Reservation </li></ul><ul><ul><li>Before the use of the service </li></ul></ul><ul><li>Price differenciation </li></ul><ul><ul><li>Elasticity (demand/price) is variable according to the segment </li></ul></ul><ul><ul><li>Attract customer with high sensity to price with low prices (apex) </li></ul></ul><ul><ul><li>Keep demanding people with price barriers (1st class) </li></ul></ul><ul><li>High fixed cost & low variable cost </li></ul><ul><li>Price leverage </li></ul><ul><ul><li>Small increase of revenu causes significative increase of profit </li></ul></ul>
    • 81. Intangible assets measuring models [Sveiby, 2001] http:// www . sveiby .com.au/ intangibleMethods . htm MEASURE
    • 82. Intangible Assets Monitor, Balanced Scorecard and Intellectual Capital Value Tangibles assets Intangible assets Growth/Renewing Efficiency Stability Clients Processes Training/Learning Supplier partner Systems Patents knowledge Aptitudes Experience formation Growth/Renewing Efficiency Stability Growth/Renewing Efficiency Stability Individual profit generator Knowledge perspective Customer capital Organizational capital Human capital Structural capital Logistics management Customer management Product innovation External structure Internal structure Individual competencies IAM [Sveiby, 2001] BSC [Nolan, 1995] IC [Edvinsson, 1997]
    • 83. Intangible assets in Celemi
    • 84. Intellectual capital in Skandia [Edvinsson, 1997]
    • 85. Balanced scorecard Customer management Product innovation Logistics management Financial Aspects CUSTOMER RELATION Goals Measures How do the customers perceive us? INFRASTRUCTURE Goals Measures In which process do we have to prove excellence? PRODUCT INNOVATION Goals Measures How to improve our services and our quality? FINANCE Goals Measures How do shareholder perceive us? & initiatives & initiatives & initiatives & initiatives Scope Scale talent Value
    • 86. BALANCED SCORECARD software From cause to effect
    • 87. BALANCED SCORECARD for IS Learning and Innovation Internal Processes Customer Perspective Value Contribution Increase of end-user productivity IT Staff Mr. xyz Objectives Key Performance Indicators (KPI’s) Targets (Baseline/Year n) Initiatives Account-ability % hidden / unproductivity costs <ul><li>Implement and conduct Acadys-Survey </li></ul><ul><li>Set up education program </li></ul><ul><li>Set standards </li></ul>A statement of what is critical to the success of the vision How success in achieving the objectives will be measured and tracked Do Wells required to achieve objectives What group or person is responsible for the measure 56 % by Acadys Reduc-tion by 5 %p.a. The level of performance or rate of improvement needed Train end-users efficiently and quickly Capability or activity needed to develop, improve or secure in order to reach strategic objectives Value Drivers [Bader, 2000] Illustration
    • 88. BALANCED SCORECARD for IS Objectives Increase End-user Productivity V3.3 Speed up upgrade of infrastructure products and services and equipment/ connection of new users or partners Key Performance Indicators (KPIs) <ul><li>SLA fulfillment rate </li></ul><ul><li>% problems/requests solved within 1 h, 1h to 6h, 1 day, more / total help-desk problems/requests </li></ul>Value Drivers Provide Cost-Efficient Services at Quality V3.1 Ensure reliable environment (availability, performance, security) at SLAs V3.2 Provide quick and effective problems/requests solving V3.6 Develop prospective capacity planning V3.7 Assess new technologies to increase end-user productivity V4.10 Align ’IT factory’ costs on best in class providers <ul><li>Average lead and execution time for global desktop upgrade </li></ul><ul><li># Non-standard desktops / # standard desktops </li></ul><ul><li>SLA fulfillment rate (e.g. # interventions / # users (for the period)) </li></ul><ul><li>Budget forecasts based on capacity planning (HW forecast, engineering and migration resources...) </li></ul><ul><li># New technologies (e.g PC, OS...) assessed within the period </li></ul><ul><li>Fixed and variable costs / # desktops </li></ul><ul><li>TCO for user survey vs benchmark (ACADYS): actuals vs benchmarks (visible and user hidden costs) </li></ul><ul><li>Costs for migration (e.g. Common Office Envirt Engineering...) </li></ul><ul><li># business applications / functionality (e.g. Visio, flowchart...) </li></ul>V3 V4 [Bader, 2000] EXEMPLE Illustration
    • 89. BALANCED SCORECARD for IS V3 - Increase End-User Productivity MONTH JUNE TABLE 3 Identify and fix issues on segment 5: response time ACTIONS Contributor : POYC Comments : Bi-Yearly End-Users Survey: Application and Service Quality Quality of training Application User-Friendly System Response Time System Availability User Satisfaction (Support) Problem Solving Help-Desk Accessibility Help-Desk Contact Quality Average # of users % of pulled users 4.2 4.0 3.0 3.0 2.1 3.0 4.0 4.0 3.5 4.2 4.5 4.9 4.8 4.5 4.9 3.9 C P Seg.1 800 C P Seg.2 1.100 C P Seg.3 650 C P Seg.4 750 C P Seg.5 700 END-USER ASSESSMENT (0 to 5) C: Current survey P: Previous survey TARGET IS 3.5 OR OVER 4.5 4.1 4.0 4.0 2.8 2.9 4.0 4.0 3.5 4.2 3.5 3.9 4.8 4.5 4.9 3.9 3.9 4.0 3.5 3.8 3.1 3.7 4.0 4.0 3.5 4.2 4.0 3.9 4.8 4.5 4.9 3.9 4.2 4.0 3.0 3.0 3.1 3.5 4.0 4.0 3.5 4.2 2.5 2.9 4.8 4.5 4.9 3.9 3.5 4.0 3.0 3.0 1.5 2.0 3.0 3.0 3.5 4.2 3.5 3.9 4.8 4.5 2.9 3.0 3.9 3.9 4.0 3.9 4.0 4.0 3.8 3.8 3.2 3.4 10 10 8 8 15 15 15 15 90 90 [Bader, 2000] EXEMPLE Illustration
    • 90. BALANCED SCORECARD for CIOs Vision and strat egy Corporate Contribution <ul><li>Control IT Expenses </li></ul><ul><ul><li>percentage above or within budget </li></ul></ul><ul><ul><li>allocation of the different budget items </li></ul></ul><ul><ul><li>IT budget as a percentage of turnover </li></ul></ul><ul><ul><li>IT expenses per staff member </li></ul></ul><ul><li>Sell to third parties </li></ul><ul><ul><li>financial benefits steeming form selling products and services </li></ul></ul><ul><li>Business value of new IT projects </li></ul><ul><ul><li>Financial evaluation based on ROI, NPV, IRR, PB </li></ul></ul><ul><ul><li>Business evaluation based on Information Economics </li></ul></ul><ul><li>Business value of the IT function </li></ul><ul><ul><li>percentage of the development capacity engaged in strategic projects </li></ul></ul><ul><ul><li>relationship between new developments / infrastructures investments / replacement investments </li></ul></ul>Internal Processes <ul><li>Efficiency Software Development </li></ul><ul><ul><li>% of changes and adjustments made throughout different development stages </li></ul></ul><ul><ul><li>number of defects per function point in the first year of production </li></ul></ul><ul><ul><li>number of function points per person per month </li></ul></ul><ul><ul><li>average number of delays late in delivering software </li></ul></ul><ul><ul><li>average unexpected budget increase </li></ul></ul><ul><ul><li>% of projects performed within SLA </li></ul></ul><ul><ul><li>% of code that is reused </li></ul></ul><ul><ul><li>% of maintenance activities </li></ul></ul><ul><ul><li>visible and invisible backlog </li></ul></ul><ul><li>Efficiency operations </li></ul><ul><ul><li>% unavailability of the mainframe </li></ul></ul><ul><ul><li>% unavailability of the network </li></ul></ul><ul><ul><li>response times per category of users </li></ul></ul><ul><ul><li>% of jobs done within set times </li></ul></ul><ul><ul><li>% of reruns </li></ul></ul><ul><ul><li>average time between system failures </li></ul></ul><ul><ul><li>ratio operational costs/installed MIPS </li></ul></ul><ul><li>Acquisition PCs and PC software </li></ul><ul><ul><li>average lead time for deliveries </li></ul></ul><ul><li>Problem management </li></ul><ul><ul><li>average answer time of help desk </li></ul></ul><ul><ul><li>% of question answered within set time </li></ul></ul><ul><ul><li>% of solutions within SLA </li></ul></ul><ul><li>User Education </li></ul><ul><ul><li>% of users that already perceived education (per technology / applications) </li></ul></ul><ul><ul><li>quality index of education </li></ul></ul><ul><li>Managing IT staff </li></ul><ul><ul><li>number of people hours that can be charged internally or externally </li></ul></ul><ul><ul><li>% of people hours that are charged on projects </li></ul></ul><ul><ul><li>satisfaction index of IT staff </li></ul></ul><ul><li>Use of communication software </li></ul><ul><ul><li>% of IT staff that can access groupware facilities (inter- and intranet) </li></ul></ul><ul><ul><li>% of IT staff that effectively use groupware-facilities </li></ul></ul>Learning and Growth <ul><li>Permanent Education of staff </li></ul><ul><ul><li>number of educational days per person </li></ul></ul><ul><ul><li>education budget as % of total IT budget </li></ul></ul><ul><li>Expertise of the IT staff </li></ul><ul><ul><li>Number of years of IT experience per staff member </li></ul></ul><ul><ul><li>age pyramid of the IT staff </li></ul></ul><ul><li>Age of the type Applications portfolio </li></ul><ul><ul><li>Number of applications per age category </li></ul></ul><ul><ul><li>Number of implications younger than 5 years </li></ul></ul><ul><li>Research and emerging technologies </li></ul><ul><ul><li>% of budget spent on IT research </li></ul></ul>Customer = User <ul><li>Research IT supplier </li></ul><ul><ul><li>% of applications managed by IT </li></ul></ul><ul><ul><li>% of applications delivered by IT </li></ul></ul><ul><ul><li>% of in-house applications </li></ul></ul><ul><li>Partnership with users </li></ul><ul><ul><li>index of user involvement in generating new strategic applications </li></ul></ul><ul><ul><li>index of user involvement in developing new application </li></ul></ul><ul><ul><li>frequency of IT Steering Committee meetings </li></ul></ul><ul><li>User satisfaction </li></ul><ul><ul><li>index of user friendliness of applications </li></ul></ul><ul><ul><li>index of user satisfaction </li></ul></ul><ul><ul><li>index of availability of applications and systems </li></ul></ul><ul><ul><li>index of functionality of applications </li></ul></ul><ul><ul><li>% of application development and operations within the Service Level Agreement (SLA) </li></ul></ul>[van Granbergen, 1997]
    • 91. Metrics for e-business [Corporate Executive Board, 1999] FINANCE PROCESSUS CLIENT CLIENT CLIENT PROCESSUS PRODUIT PRODUIT PROCESSUS
    • 92. Metrics for e-business [Corporate Executive Board, 1999] (SALES EFFICIENCY AND TRANSACTIONAL EXCELLENCE) Illustration
    • 93. E-Performance [Agrawal, 2000] <ul><li>ATTRACTION </li></ul><ul><li>Visitor base </li></ul><ul><li>Visitor acquisition cost </li></ul><ul><li>Visitor advertising revenue </li></ul><ul><li>CONVERSION </li></ul><ul><li>customer base </li></ul><ul><li>customer acquisition cost </li></ul><ul><li>customer conversion rate </li></ul><ul><li>nb transactions / customer </li></ul><ul><li>revenue / transaction </li></ul><ul><li>revenue / customer </li></ul><ul><li>customer gross income </li></ul><ul><li>customer maintenance cost </li></ul><ul><li>customer operating cost </li></ul><ul><li>customer churn rate </li></ul><ul><li>… </li></ul><ul><li>RETENTION </li></ul><ul><li>repeat-customer base </li></ul><ul><li>r-customer acquisition cost </li></ul><ul><li>r-customer conversion rate </li></ul><ul><li>nb transactions / r-customer </li></ul><ul><li>revenue / transaction </li></ul><ul><li>revenue / r-customer </li></ul><ul><li>r-customer gross income </li></ul><ul><li>r-customer maintenance cost </li></ul><ul><li>r-customer operating cost </li></ul><ul><li>r-customer churn rate </li></ul><ul><li>… </li></ul>
    • 94. Management Cokpit http:// www .management-cockpit. com /
    • 95. SCENARIO PLANNING 1 2 3 A B C D ? Clear-enough future forecast Traditional toolkit Alternate futures Discrete options Game theory Decision analysis True ambiguity No basis for forecast analogies Pattern recognition Range of futures No natural option Scenario planning Levels of uncertainty: [Courtney, 1997] Emerging scenarios
    • 96. Mobile - Framework <ul><li>PRODUCT INNOVATION </li></ul><ul><li>Conceive of attractive new services and contents, and figure out how best to bring them to market </li></ul><ul><li>INFRASTRUCTURE MANAGEMENT </li></ul><ul><li>Build and manage facilities for high volume, repetitive, operational tasks </li></ul><ul><li>CUSTOMER RELATIONSHIP MANAGEMENT </li></ul><ul><li>Identify, attract, and build relationships with customers </li></ul>Product Customer Infrastructure Payment Communication Access Platform Network Device Marketing Relation mgmt Personalization Telecom operator Device manufacturer Internet player content provider Case study
    • 97. Mobile - Product (payment) «a killer attitude, no killer application» Product Customer Infrastructure Communication Platform Network Device Marketing Relation mgmt Personalization Payment Access <ul><li>Existing credit card </li></ul><ul><li>Nokia/VISA agreement </li></ul><ul><li>France Telecom’s ItiAchat using Motorola’s StarTAC-D phone </li></ul><ul><li>Phone operator provides credit </li></ul><ul><li>Sonera Mobile Pay in Finland „Dial-a-Coke“ </li></ul><ul><li>New virtual credit/debit card </li></ul><ul><li>Paybox.net in Germany </li></ul>
    • 98. Mobile - Low cash transaction value [ McKinsey , 2000 ] EUR 300 milliards (Europe) Vending machines, Parking, Movie tickets Public transportation, Tolls, Laundry, Fast food Smart airport, Gambling Smart card barriers : <ul><li>Need of recharge (ATM dependent) </li></ul><ul><li>Lack of information feedback (e.g., remaining balance) </li></ul><ul><li>Dedicated & complex hardware (wire-lined POS & confirmation machine) </li></ul>Credit card barriers : Smart phone advantages : <ul><li>ATM independent </li></ul><ul><li>Visual real time feedback </li></ul><ul><li>Standard & common device (no wire line connection required, no confirmation machines required) </li></ul><ul><li>High penetration of mobile phones </li></ul><ul><li>Tailor-made solution for micro-payments </li></ul><ul><li>Multifunctional </li></ul><ul><li>Automatic identification control </li></ul><ul><li>Relatively low penetration among users and merchants/ vendor machines </li></ul><ul><li>Inefficient in transactions lower than $10 </li></ul><ul><li>Mono-functional (payments only) </li></ul><ul><li>Difficulty for customers & merchants to verify each other </li></ul>Estimate
    • 99. Mobile - Product (communication) Product Customer Infrastructure Payment Platform Network Device Marketing Relation mgmt Personalization Communication Access SMS E-mail Instant messaging Unified messaging nomad
    • 100. Mobile - Product (access) Product Customer Infrastructure Payment Communication Access Platform Network Device Marketing Relation mgmt Personalization Information Multimedia Transaction <ul><li>News </li></ul><ul><li>Alerts </li></ul><ul><li>Sports </li></ul><ul><li>Financial </li></ul><ul><li>Entertainment </li></ul><ul><li>Program </li></ul><ul><li>Travel </li></ul><ul><li>Guide </li></ul><ul><li>Find me services </li></ul><ul><li>Yellow pages </li></ul><ul><li>Dictionary </li></ul><ul><li>Traffic </li></ul><ul><li>FINANCIAL </li></ul><ul><li>Banking </li></ul><ul><li>Broking </li></ul><ul><li>SHOPPING </li></ul><ul><li>Retailing </li></ul><ul><li>Ticketing </li></ul><ul><li>Auctions </li></ul><ul><li>Reservations </li></ul><ul><li>Travel </li></ul><ul><li>Betting </li></ul><ul><li>MEMBERSHIP </li></ul><ul><li>Loyalty programs </li></ul><ul><li>Medical records </li></ul><ul><li>ENTERTAINMENT </li></ul><ul><li>Gaming </li></ul><ul><li>Music </li></ul><ul><li>TV </li></ul><ul><li>Characters </li></ul><ul><li>IN-CAR ELECTRONICS </li></ul><ul><li>Music </li></ul><ul><li>Traffic </li></ul><ul><li>GPS </li></ul>Anytime Anywhere Time/location-sensitive services WAP
    • 101. Mobile - Infrastructure Product Customer Infrastructure Payment Communication Access Platform Network Device Marketing Relation mgmt Personalization WAP middleware aggregator UMTS PKI GPS Operating system Speech recognition Bluetooth battle for standards
    • 102. Mobile - Customer Product Customer Infrastructure Payment Communication Access Platform Network Device Marketing Personalization <ul><li>to identify and attract customers </li></ul><ul><li>to generate economies of scope </li></ul><ul><li>to build customer loyalty and trust </li></ul><ul><li>to understand their attitudes and needs </li></ul><ul><li>to customize usage of services and content </li></ul><ul><li>to provide the customer with the right content </li></ul><ul><ul><li>PUSH information has to be relevant and timely to avoid being rejected </li></ul></ul><ul><ul><li>PULL information has to be easily accessed and relevant to generate usage </li></ul></ul>Relation mgmt battle for customer ownership
    • 103. Mobile - Three scenarios Market chaos Operator integration competition cooperation Portal syndication product Infrastructure customer [c-qential, 2000]
    • 104. Mobile – Operator integration BUNDLED SCENARIO 1 <ul><li>The operator leverages its control of the network and its ownership of the customers to extend its role </li></ul>Product Customer Infrastructure Payment Communication Access Platform Network Device Marketing Relation mgmt Personalization <ul><li>subscription, airtime charges and pay-per-use from customers </li></ul><ul><li>commission fee (for processing, billing …) from content providers </li></ul><ul><li>derived from sale of devices through operators </li></ul><ul><li>margins from selling content </li></ul>traffic could be a device-centric in place of an oprator-centric scenario …
    • 105. Mobile - Market chaos UN-BUNDLED SCENARIO 2 <ul><li>A marketplace where customers have distinct relationship with device makers, operators and content providers </li></ul>Product Customer Infrastructure Payment Communication Access Platform Network Device Marketing Relation mgmt Personalization <ul><li>subscription and airtime charges from customers </li></ul><ul><li>sales of content and services: pay-per-use & subscription </li></ul><ul><li>sales of devices </li></ul><ul><li>sales of profiling information </li></ul>content
    • 106. Mobile - Portal syndication RE-BUNDLED SCENARIO 3 <ul><li>Aggregators (infomediaries) syndicate content providers to create portals that deliver customized offerings </li></ul>Product Customer Infrastructure Payment Communication Access Platform Network Device Marketing Relation mgmt Personalization <ul><li>subscription and airtime charges from customers </li></ul><ul><li>margins from selling content and services through wortals </li></ul><ul><li>subscription and pay-per-use </li></ul><ul><li>advertising fee </li></ul><ul><li>charges for personalized bundled services and content </li></ul>customers
    • 107. Evaluation of scenarios Scenarios Pros Cons Operator <ul><li>Operators control customer experience </li></ul><ul><li>Intense price competition among operators will keep service affordable </li></ul><ul><li>Ability to provide unified billing for services and content </li></ul><ul><li>Breadth and quality of content and commerce are limited </li></ul><ul><li>Users will ultimately choose services based on content brand names </li></ul>Market <ul><li>Capitalizes on strengths of individual players </li></ul><ul><li>Customer has direct contact with content provider </li></ul><ul><li>No big brother : protection of private life </li></ul><ul><li>Risk of anarchy </li></ul><ul><li>Difficulty to reach the customer and maintain the distribution channels </li></ul>Portal <ul><li>Allows users a virtually seamless transition from the desktop to mobile world </li></ul><ul><li>Core competency is a provision of highly customized content and services </li></ul><ul><li>Portal may just serve as a launch pad to the Internet for users </li></ul><ul><li>Rules for sharing third-party content with mobile users are complex and uncertain </li></ul>Product Customer Infrastructure
    • 108. <ul><li>Model </li></ul><ul><li>Based on (differential) equations </li></ul><ul><ul><li>Stocks and flows </li></ul></ul><ul><ul><li>converters and connectors </li></ul></ul><ul><li>manages feed-back loops explicitely </li></ul><ul><ul><li>positive (reinforcement) </li></ul></ul><ul><ul><li>or negative (correction) </li></ul></ul><ul><li>allows simulating the behavior </li></ul><ul><ul><li>In a virtual world </li></ul></ul><ul><li>in a learning perspective </li></ul>System dynamics Decision Support system learning Computer-aided design inventory + order rate delivery rate Service time Productivity SIMULATE
    • 109. Customer- relationship Product innovation Infrastructures logistics Finance revenue System dynamics
    • 110. Simulation
    • 111. Strategic postures ? Shape the future Play a leadership role Setting standards Creating demand Adapt the future With through speed, Agility and flexibility Recognizing and capturing Opportunities in existing markets Defend & react Set barriers Defensive competition Reserve the right to play Invest sufficiently to stay In the game Avoid premature commitments [Courtney, 1997]
    • 112. Conclusion Business model What? Who? How? How much? Measure Simulation scenarios = BUSINESS PLAN + + strategy Customer- relationship Product innovation Infrastructure logistics Finance revenue INNOVATION Goals Me a sures & initiatives
    • 113. Research … XML Frame e-business model ontology Project
    • 114. Research … Project [Pigneur, 2001] e-business model handbook XML Case-based reasoning <ul><li>Business model </li></ul><ul><li>(Un-) bundled corporation </li></ul><ul><li>Breakthrough strategy </li></ul>CUSTOMER PRODUCT LOGISTICS FINANCE Critiquing system <ul><li>Critical success factor </li></ul><ul><li>Balanced scorecard </li></ul><ul><li>Resource-based view </li></ul>Simulation environment <ul><li>System dynamics </li></ul><ul><li>Dynamic resource system </li></ul><ul><li>Scenario Planning </li></ul>DEFINE CLASS DESIGN ASSESS MEASURE CRITIQUE MODEL FORECAST SIMULATE BUSINESS ONTOLOGY OBSERVED CASES ENGINEERING TOOL Framework for Tool for E-BUSINESS MODEL HANDBOOK

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