3 1b E Business

Professor Petter Gottschalk Electronic Business 1

Electronic Business

Professor Petter Gottschalk

Norwegian School of Management BI

Professor Petter Gottschalk Electronic Business 2

Properties of the Internet for E-Business

1. Mediating technology

2. Universality

3. Network externalities

4. Distribution channel

5. Time moderator

6. Assymetry shrinker

7. Infinite virtual capacity

8. Low cost standard

9. Creative destroyer

10. Cost reducer

Afuah and Tucci, Internet Business Models and Strategies, 2003

Professor Petter Gottschalk Electronic Business 3

Drivers of Digital Transformation

1. Electronic delivery

2. Information intensity

3. Customizability

4. Aggregation effects

5. Search costs

6. Real-time interface

7. Contracting risk

8. Network effects

9. Standardization

10. Competencies

Andal-Ancion, Cartwright and Yip, Sloan Management Review, 2003

Professor Petter Gottschalk Electronic Business 4

Strategies for Digital Transformation

A. Classic disintermediation. Cutting away layers of middlement, such as distributors, that separate the company from its customers.

B. Remediation. Introducing middlement as intermediaries such as market-facing enterprises.

C. Network-based mediation. Building strategig aliances and partnerships with new and existing players.

Andal-Ancion, Cartwright and Yip, Sloan Management Review, 2003

Professor Petter Gottschalk Electronic Business 5

Drivers of Strategy for Digital Transformation

1. Electronic delivery A

2. Information intensity A

3. Customizability

4. Aggregation effects B

5. Search costs

6. Real-time interface

7. Contracting risk B

8. Network effects C

9. Standardization C

10. Competencies

Andal-Ancion, Cartwright and Yip, Sloan Management Review, 2003

Professor Petter Gottschalk Electronic Business 6

Electronic Commerce

• Buying, selling, or exchanging products, services, and information, via computer networks such at the Internet.

• Delivery of goods, services, information, or payments over computer networks or by any other electronic means.

• Reducing customer search and switching costs

Weill and Vitale, Place to Space - Migrating to eBusiness Models, 2001

Professor Petter Gottschalk Electronic Business 7

Electronic Business

• Marketing, buying, selling, delivering, servicing, and paying for products, services, and information across networks linking an enterprise and its prospects, customers, agents, suppliers, competitors, allies, and complementors.

• Conduct of business and business processes over computer networks based on nonproprietary standards.

Weill and Vitale, Place to Space - Migrating to eBusiness Models, 2001

Professor Petter Gottschalk Electronic Business 8

E-Commerce & E-Business

E-Commerce is what you do…E-Business is what you are…

• Marketing• Selling• Buying of

products and services on the Internet

E-Business• Enterprise designed for success

in the Information Age• Creates new sources of shareholder

value– Building customer loyalty– Optimizing business process– Creating new products and services– Managing risk and compliance– Reaching new markets– Enhancing human capital– Harnessing technology– Achieving market leadership

E-Commerce

Professor Petter Gottschalk Electronic Business 9

1. Content Provider is a firm that creates and provides content (information, products, and services) in digital form to customers via third parties.

2. Direct to Customer is a firm that communicates directly with its customers.

3. Full Service Provider is a firm that provides totat coverage of customer needs in a particular domain.

4. Intermediary is a firm such as a portal, an auction, and an aggregator.

Business Models for E-Business

Weill and Vitale, Place to Space - Migrating to eBusiness Models, 2001

Professor Petter Gottschalk Electronic Business 10

5. Shared Infrastructure is a firm that provides infrastructure shared by its owners.

6. Value Net Integrator is a firm that coordinates information in member value chains.

7. Virtual Community sponsor is a firm that creates communication between members.

8. Whole of Enterprise / Government is a single point of contact for users.

Business Models for E-Business (cont.)

Weill and Vitale, Place to Space - Migrating to eBusiness Models, 2001

Professor Petter Gottschalk Electronic Business 11

Business Model: Content Provider

Professor Petter Gottschalk Electronic Business 12

Business Model: Direct to Customer

Professor Petter Gottschalk Electronic Business 13

Business Model: Full-Service Provider

Professor Petter Gottschalk Electronic Business 14

Business Model: Intermediary

Professor Petter Gottschalk Electronic Business 15

Business Model: Shared Infrastructure

Professor Petter Gottschalk Electronic Business 16

Business Model: Value Net Integrator

Professor Petter Gottschalk Electronic Business 17

Business Model: Virtual Community

Professor Petter Gottschalk Electronic Business 18

Business Model: Whole of Enterprise / Government

Professor Petter Gottschalk Electronic Business 19

Direct to Customer

Virtual CommunityIntermediary

Whole of Enterprise

Full-Service Provider

Value Net Integrator

Content Provider

Shared Infrastructure

Great extent

Integration with

customers

Little extent

Little extent Integration with partners Great extent

Business Models for E-Business

Professor Petter Gottschalk Electronic Business 20

Shared standard IT applications

Shared information technology services

Human information technology infrastructure

Information technology components

Local applications

Infrastructure for Electronic Business

Weill and Vitale, Place to Space - Migrating to eBusiness Models, 2001

Professor Petter Gottschalk Electronic Business 21

13 Applications infrastructure

7 Communications

6 Data management

9 IT management

4 Security

20 Architecture and standards

7 Channel management

2 IT research and development

2 IT education

70 Infrastructure Services

Weill and Vitale, Place to Space - Migrating to eBusiness Models, 2001

Professor Petter Gottschalk Electronic Business 22

70 Infrastructure Services 1. Applications infrastructure1.1 Internet policies such as employee access1.2 Enforce Internet policies1.3 Email policies such as inappropriate and personal mail, herassment policies,

filtering policies1.4 Enforce email policies1.5 Centralized management of e-business applications such as common standards1.6 Centralized management of infrastructure capacity such as server traffic1.7 Integrated mobile computing applications such as access for internal users1.8 ERP (enterprise resource planning) services1.9 Middleware linking systems on different platforms1.10 Wireless applications such as web applications for wireless devices1.11 Application services provision to business units1.12 Workflow applications such as groupware1.13 Payment transaction processing such as EFT (electronic funds transfer)

Professor Petter Gottschalk Electronic Business 23

70 Infrastructure Services 2. Communications2.1 Communications network services2.2 Broadband communication services2.3 Intranet capabilities to support publishing, directories, etc.2.4 Extranet capabilities to support information and applications2.5 Workstation networks2.6 EDI linkages to customers and suppliers2.7 Electronic support to groups3. Data management3.1 Manage key data independent of applications3.2 A centralized data warehouse that summarizes key information3.3 Data management advice and consultancy3.4 Electronic provision of management information3.5 Storage farms or storage area networks3.6 Knowledge management in terms of communities of practice etc.

Professor Petter Gottschalk Electronic Business 24

70 Infrastructure Services 4. IT management4.1 Large scale data processing facilities4.2 Server farms including mail server, web servers and printer servers4.3 Installation and maintenance of workstations and LANs4.4 Information systems planning for strategy4.5 Information systems project management4.6 Negotiate with suppliers and outsourcers4.7 Service level agreements4.8 Common systems development environment4.9 Pilot e-business initiatives such as pilot web shopfronts5. Security5.1 Security policies for use of information systems5.2 Enforce security policies for information systems5.3 Disaster planning for business applications5.4 Firewall on secure gateway services

Professor Petter Gottschalk Electronic Business 25

70 Infrastructure Services 6. Architecture and standards6.1 Specify architectures for data6.2 Specify architectures for technology6.3 Specify architectures for communications6.4 Specify architectures for applications6.5 Specify architectures for work 6.6 Enforce architectures for data6.7 Enforce architectures for technology6.8 Enforce architectures for communications6.9 Enforce architectures for applications6.10 Enforce architectures for work6.11 Specify architecture standards for data6.12 Specify architecture standards for technology6.13 Specify architecture standards for communications6.14 Specify architecture standards for applications6.15 Specify architecture standards for work

Professor Petter Gottschalk Electronic Business 26

70 Infrastructure Services 6. Architecture and standards (cont)6.16 Enforce architecture standards for data6.17 Enforce architecture standards for technology6.18 Enforce architecture standards for communications6.19 Enforce architecture standards for applications6.20 Enforce architecture standards for work 7. Channel management7.1 Electronic file transfer protocols7.2 Kiosks7.3 Web sites7.4 Call centres7.5 IVRs7.6 Mobile phones7.7 Mobile computing

Professor Petter Gottschalk Electronic Business 27

70 Infrastructure Services 8. IT research and development8.1 Identify and test new technologies for business purposes8.2 Evaluate proposals for new information systems initiatives9. IT education9.1 Training and use of IT9.2 Management education for generating value from IT use

Professor Petter Gottschalk Electronic Business 28

Weill and Vitale, Place to Space - Migrating to eBusiness Models, 2001

8

E-Business

Models

70

Infrastructure

Services

Contingent Infrastructure Services

Professor Petter Gottschalk Electronic Business 29

Business Model: Content Provider

Infrastructure service # 3.5:

Storage farms and networks

Professor Petter Gottschalk Electronic Business 30

Business Model: Direct to Customer

Infrastructure service # 1.13:

Payment transaction processing

Professor Petter Gottschalk Electronic Business 31

Business Model: Full-Service Provider

Infrastructure service # 1.6:

Centralized server capacity

Professor Petter Gottschalk Electronic Business 32

Business Model: Intermediary

Infrastructure service # 3.6:

Knowledge management systems

Professor Petter Gottschalk Electronic Business 33

Business Model: Shared Infrastructure

Infrastructure service # 6.3:

Architecture for communication

Professor Petter Gottschalk Electronic Business 34

Business Model: Value Net Integrator

Infrastructure service # 3.2:

Centralized data warehouse

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Business Model: Virtual Community

Infrastructure service # 9.1:

Training and use of IT

Professor Petter Gottschalk Electronic Business 36

Business Model: Whole of Enterprise / Government

Infrastructure service # 3.2:

Centralized data warehouse

Professor Petter Gottschalk Electronic Business 37

Individual term paper (50%)

The objective of the individual term paper is the written presentation of a difficult question in a clear manner. Therefore, clarity in the organization of the paper and logical flow is as important as substance. It is not expected that you cover all issues in the literature. It is extremely important that your own thinking is the base.

The individual term paper should be entitled ""Knowledge Management Systems in Electronic Business". It should address and discuss how knowledge management can improve and support electronic business. An important task is to identify and discuss research literature. Therefore, the literature review is an important part of the paper. Research literature linking knowledge management and e-business may be hard to find, so you will have to spend a lot of time searching in library databases.

A causal loop diagram must illustrate the main constructs (phenomena) and their relationships.

The individual term paper should be 10 - 20 pages. Each student will hand in the individual term paper on or before April 15.

Professor Petter Gottschalk Electronic Business 38

Individual term paper (50%)

Literature

• El Sawy, O A (2001), Redesigning enterprise processes for e-business, McGraw-Hill, Boston, Massachusetts, USA.

• Fahey, Srivastava, Sharon and Smith (2001). “Linking e-business and operating processes: The role of knowledge management”, IBM Systems Journal, 40 (4): 889-907.

• Sveiby (2001), “A knowledge-based theory of the firm to guide in strategy formulation”, Journal of Intellectual Capital, 2 (4): 344-358.

• ?

• ?

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Professor Petter Gottschalk Electronic Business 39

SECOND GENERATION E-BUSINESS

(El Sawy 2001)

Knowledge Management

Professor Petter Gottschalk Electronic Business 40

Knowledge Principles in E-Business Processes8. Analyze and Synthesize. Analysere og syntetisere. Utnytt de

interaktive analyse- og syntesemulighetene rundt en prosess til å generere merverdi. En forretningsprosess kan bli redesignet ved å benytte eksisterende kunnskap.

9. Connect, Collect and Create. Koble, samle og skape. Smart vekst i gjenbrukbar kunnskap rundt prosessen gjennom alle som berører den. En forretningsprosess kan bli redesignet ved å la kunnskap utvikle seg rundt den gjennom alle menneskene som deltar i prosessen.

10. Personalize. Personliggjøre. Gjør prosessen intim ved hjelp av preferansene og vanene til deltakerne. En forretningsprosess kan bli redesignet ved å øke dens evne til å lære om preferansene og vanene til kunder og prosessutførere.

(El Sawy 2001)

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(Fahey et al. 2001)

KM develops and evaluates….

By addressing such questions as…

In order to…

…knowledge stock …know how …increase external performance

…knowledge flow …know what …increase internal performance

…knowledge use …know why …increase quality of life

KM focal points, questions, and goals

Professor Petter Gottschalk Electronic Business 42

(Fahey et al. 2001)

Sample e-business generated knowledge issues

Business Issues Knowledge Issues

Customer solutions What specific types of customer functionalityHow e-business will affect solutionsWhy some customers respond

Rivals What new forms of customer valueHow new rivals emergeWhy emergent rivals will reshape traditional industry boundaries

Professor Petter Gottschalk Electronic Business 43

(Fahey et al. 2001)

Business Issues

Knowledge Issues

Market place What strategy models workHow strategy models workWhy strategy models work

Assets What assets increase in importanceHow to develop critically required assetsWhy assets change in importance in e-business

Sample e-business generated knowledge issues

Professor Petter Gottschalk Electronic Business 44

(Fahey et al. 2001)

Business Issues Knowledge Issues

Business Processes What business processes change in e-businessHow do they changeWhy do they change

Sample e-business generated knowledge issues

Professor Petter Gottschalk Electronic Business 45

Core operating processes in e-business

1. Product Development Management – PDM.

2. Supply Chain Management – SCM.

3. Customer Relationship Management – CRM.

(Fahey et al. 2001)

Professor Petter Gottschalk Electronic Business 46

(Fahey et al. 2001)

Knowledge issues in operating processes

Processes Know-What Know-How Know-Why

PDM What level of increased speed?

How can we share the content and the context?

Why are continual new product enhancements important?

SCM What changes are needed?

How do these changes?

Why do these changes?

CRM What are our customers needs?

How can we collect relevant information?

Why have customer expectations changed?

Professor Petter Gottschalk Electronic Business 47

Business Model: Content Provider

Know-What?

Know-How?

Know-Why?

Professor Petter Gottschalk Electronic Business 48

Business Model: Direct to Customer

Know-What?

Know-How?

Know-Why?

Professor Petter Gottschalk Electronic Business 49

Business Model: Full-Service Provider

Know-What?

Know-How?

Know-Why?

Professor Petter Gottschalk Electronic Business 50

Business Model: Intermediary

Know-What?

Know-How?

Know-Why?

Professor Petter Gottschalk Electronic Business 51

Business Model: Shared Infrastructure

Know-What?

Know-How?

Know-Why?

Professor Petter Gottschalk Electronic Business 52

Business Model: Value Net Integrator

Know-What?

Know-How?

Know-Why?

Professor Petter Gottschalk Electronic Business 53

Business Model: Virtual Community

Know-What?

Know-How?

Know-Why?

Professor Petter Gottschalk Electronic Business 54

Business Model: Whole of Enterprise / Government

Know-What?

Know-How?

Know-Why?

Professor Petter Gottschalk Electronic Business 55

Three families of intangible assets

(Sveiby 2001)

Professor Petter Gottschalk Electronic Business 56

Knowledge Transfers

(Sveiby 2001)