Transcript
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Electronic commerce Business Impacts Project (EBIP)
Chennai, 12 November 2002Graham Vickery & Vladimir López-Bassols
OECD/STI, Information Economy Unit
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Overview
Part I: Introduction/ Background, Methodology
Part II: Cross-country study: background and some results
Conclusions
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Introduction
Improve understanding of impacts of electronic commerce on business.
Previous case study information anecdotal, fragmented, not comparable across sectors or countries.
EBIP used common methodology for firm-level case studies to improve cross-country and cross-sector comparability.
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Approach
Broad definition of electronic commerce: electronic electronic transactions over computer-mediated networkstransactions over computer-mediated networks.
E-commerce not defined exclusively in terms of the Internet, but this is key technology in evolution of e-commerce.
Assess migration from legacy e-commerce systems such as Electronic Data Interchange (EDI) to Internet-based systems.
Map business functions to innovations
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Market systems
Val
ue C
hain
Marketplace
Marketplace
Industry
Consumer
Industry
Use value
Exchange value
Use value
Exchange value
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Business functions
Transactions widely defined:– Transaction preparation (advertising,
catalogues and stock lists, information services, negotiation)
– Transaction completion (ordering, billing and payment, finance, delivery)
– Transaction support (information capture, information management, market analysis, market development)
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Framework
Transaction Preparation•Advertising•Catalogues and Stock Lists•Information Services•Negotiation
Production Support•Information Capture•Information Management•Market Analysis•Market Development
Transaction Completion•Ordering•Billing and payment•Finance•Delivery
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Innovations Electronic commerce / Internet strategies are
innovations in how transactions are organised:– Product innovation (diversification, differentiation,
customisation, product / service bundling)– Process innovation (design integration, logistics,
production, administration / production co-ordination)
– Relational and organisational innovation (geographical expansion, market segmentation, establishing trust, increasing loyalty).
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Method: mapping business processes to innovations
Market Development - 3 main categories of innovations– Product Innovation
• e.g. diversification, product-service bundling, differentiation
– Process Innovation • e.g. internal co-ordination, external co-ordination, value
chain integration
– Relational Innovation • e.g. expansion, segmentation, trust & loyalty
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Analytical grid (“footprints”)
Transaction
Preparation
Transaction
Completion
Production
Support
C1 C2 C3 C4 C5 C6 C7 C8 C9
E1
E2
Process
Innovation
E3
E4
E5
Product
Innovation
E6
Relational
Innovation
E9
E7
E8
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Documentation
Methodology (conceptual framework) Study Plan (for sector reports):
– Value-chain mapping– Field research
• sample selection• background firm information• interviews
– Analysis– Data reporting sheets
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Value-chain mapping: an example (tourism in CAN)
RETAIL TRAVEL INDUSTRY
CONSUMER(Order/purchase/delivery airline or air charter ticket)
CRS/GDS (Reservations/Ticketing Provider)Hard Copy and Electronic Ticketing
ASP (Travel Accounting andData Processing Systems)
Bank Settlement Plan(Clearing House for ticketing transactions of
participating IATA Carriers)AIR CARRIERS
Domestic and International(Participating IATA Carriers)
NON/SCHEDULED AIRCARRIERS
WHOLESALE TRAVEL INDUSTRY
Call-inTravelOffice(Agent)
Walk-inTravelOffice(Agent)
VirtualTravelOffice(No Agent)
NewDomesticCompetitors
Consolidators(Agent/Online)
TourOperatorsAir Charters(Agent/Online)
$$ $$ $$ $$ $$ $$ $$
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Value-chains and sampling
Chose sector Select product or product
group Identify and select proactive
firms– most significant– structuring effect
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Cross-country study: background
Case studies, systematic and standardised Partnership between OECD, TNO (NLD), IPTS (EC) Studies started in late 2000, interviews/analysis
during 2001 Database: 217 firms, 30 sector reports covering 14
sectors in 11 countries Workshops: Seville (June 2001), Rome (October
2001) Synthesis Report
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Firm sample
Size: 60% large (250+), 40% small 14 sectors: 2/3 of firms in intangibles, 1/3 tangibles
– Intangibles: travel and tourism, transport and logistics, banking and financial services, business services, and music
– Tangibles: textiles and garments, book-selling, chemicals and plastics, glass, steel, non-ferrous metals, ICT-goods, automobiles, and construction
11 countries: Canada, France, Italy, Korea, Mexico, Netherlands, Norway, Portugal, Spain, Sweden, United Kingdom
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What is more important the ‘commerce’ factor or the ‘e’ factor?
Successful e-commerce strategies led by commercial commercial considerationsconsiderations.
E-commerce part of larger business and economic transformations. Successful application and use are embeddedembedded in broader business strategies with major emphasis on both e-commerce and ICT skills.
But e-commerce a major business innovationmajor business innovation that most firms will have to adopt.
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Why adopt?
Motivations high where ICT investment is already large and risk low. Most firms want to: Reduce costs Increase transaction speed and reliability Improve management capabilities Develop and/or improve collaboration capabilities Create interdependencies Better management of customer relations Create more added value
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E-commerce technologies: WWW with customers, EDI with suppliers
0%
5%
10%
15%
20%
25%
30%
35%
40%
WWW E-mail EDI Extranets Internet EDI
with customers with suppliers
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Transaction preparation on-line,completion slower to go on-line
0%2%
4%6%
8%10%12%
14%16%
18%20%
Infor
mation
servi
ces
Orderin
g
Advertis
ing
Catalogu
es
Negoti
ation
Delive
ry
Billing &
paym
ent
Finan
ce
with customers with suppliers
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Transaction preparation over Internet,completion over EDI, Internet EDI, extranets
0 50 100 150 200 250
Advertising
Catalogues
Information services
Negotiation
Ordering
Billing & payment
Finance
Delivery
WWW E-mail
Extranet Internet EDI
EDI
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What are the impacts on firms? E-commerce facilitates business relationship
management and tools lower costs to reach new customers and suppliers
Differences by sector
Product innovations more common for firms with intangible/services products
Market expansion and segmentation more common for firms with intangible/services products
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What are the impacts on firms?
Differences by firm size:
Process innovations more frequent for large firms
Small firms use Internet-based expansion strategies to make themselves known and explore new markets
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Overall the Internet is having large impacts on how firms conduct business ..
Expected/actual e-commerce impacts by business function
0%10%20%30%40%50%60%70%
Expected Effects Actual Impacts
TRANSACTIONPREPARATION
TRANSACTIONCOMPLETION
PRODUCTIONSUPPORT
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.. reshaping many business processes ..Expected/actual e-com process impacts by business process
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Divers
ificati
on
Differe
ntiati
on
Custom
isatio
n
Bundli
ng
Design
Logis
tics
Produ
ction
Co-or
dinati
on
Expan
sion
Segmen
tation
Trus
t
Loya
lty
Expected Effects Actual Impacts
PRODUCTINNOVATION
PROCESSINNOVATION
RELATIONALINNOVATION
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.. with generally positive benefits one-third of firms had positive impacts on
turnover or profitability
0% 20% 40% 60% 80% 100%
Employment
Turnover
Profitability
Increase
Decrease
No Change
NA
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Measuring impacts is not easy
Impacts of e-commerce hard to quantify
Over one-half of pro-active firms not able to report measurable impacts
Too soon or firms not able to separately identify effects solely from e-commerce
Although employment impacts difficult to measure, many firms reported up-skilling and changes in the composition of the workforce.
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Markets
Greater mix of direct and intermediated sales: bypassing traditional intermediaries, facilitating new intermediaries.
Incumbent firms and established business models benefiting, e-commerce not significantly altering established market power. Small firms may not be advantaged.
Very few firms saw e-commerce destabilising existing commercial relations.
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What policy issues are important?
Competence factors: general education, specific IT/e-business skills are crucial to involvement in e-commerce activities
Other factors:
– Costs (including technology costs)
– Confidence and trust, e.g. clarification, enforcement and cross-border inter-operability of existing legal frameworks.
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