Beyond eBusiness Chapter 5 Business Aspect Table of
Beyond e-Business Chapter 5: Business Aspect
Table of contents • Introduction • Business aspect ingredients – Business drivers – Business directions – Business network operations – Business structures – Business models • Service-dominant view • Case studies: POSH, TTU, Tra. XP • Conclusions Beyond e-Business © 2015 Paul Grefen Chapter 5: Business Aspect - 2
Business Aspect Introduction Beyond e-Business © 2015 Paul Grefen Chapter 5: Business Aspect -
Business aspect in BOAT framework Tech Bus Arch Org Beyond e-Business © 2015 Paul Grefen Chapter 5: Business Aspect - 4
Nature of the business aspect • The business (B) aspect of the BOAT framework contains those elements of networked e-business that describe the nature of e-business networks at a high level from a business-oriented point of view. • The B aspect focuses on the what and why of e -business networks – their reasons for existence. Beyond e-Business © 2015 Paul Grefen Chapter 5: Business Aspect - 5
Business aspect ingredients within organization between organizations Business Drivers Business Networked e-Business Models + Business Directions Beyond e-Business © 2015 Paul Grefen Business Structures Chapter 5: Business Aspect - 6
Business Aspect Business drivers Beyond e-Business © 2015 Paul Grefen Chapter 5: Business Aspect -
Reach • Reach of an e-business scenario determines which parties can be involved in the scenario • Use of ICT to increase reach • Three types of reach: – Geographical reach: where? – Temporal reach: when? – Modal reach: via what channels? Beyond e-Business © 2015 Paul Grefen Chapter 5: Business Aspect - 8
Reach in B 2 C application Beyond e-Business © 2015 Paul Grefen Chapter 5: Business Aspect - 9
Richness • Richness of an e-business scenario determines the intensity of the communication between parties in the scenario • Using the main communication channel(s) • Use of ICT to increase richness • Aspects: – Frequency, level of interactivity, level of detail – Used media (from plain text to virtual reality) – Adaptation to party (customization) Beyond e-Business © 2015 Paul Grefen Chapter 5: Business Aspect - 10
Increasing media richness Beyond e-Business © 2015 Paul Grefen Chapter 5: Business Aspect - 11
richness Reach & richness in e-business transformation s s e on n i s ati u b e form s n tra reach Beyond e-Business © 2015 Paul Grefen Chapter 5: Business Aspect - 12
Efficiency • Dramatical increase of the efficiency of conducting business to induce new business models IT-enabled business e-business – For example: micro-transactions • Small increase of efficiency to reduce costs of existing business models without altering the essence of these models IT-supported business e-business – For example: automated bookkeeping Beyond e-Business © 2015 Paul Grefen Chapter 5: Business Aspect - 13
Towards extreme operational efficiency S S TACTICAL OPERATIONAL O Beyond e-Business © 2015 Paul Grefen Chapter 5: Business Aspect - 14
Business Aspect Business directions Beyond e-Business © 2015 Paul Grefen Chapter 5: Business Aspect -
Business directions • Business directions are (new) ways to conduct business from the viewpoint of one party • For example: – Always being available to customers, providing direct service in an on-demand fashion – Achieving extreme efficiency by full automation to significantly lower transaction costs • Business directions are ‘inspired by’ operationalized business drivers Beyond e-Business © 2015 Paul Grefen Chapter 5: Business Aspect - 16
Overview of business directions Business driver Operationalized driver Business direction Reach Richness Efficiency Beyond e-Business © 2015 Paul Grefen Availability Accessibility Customer intimacy Transitionality Cost efficiency Time efficiency On-time and online business Multi-channel business Enhanced customer relationship managmnt Integrated bricks & clicks Completely automated business Time-compressed business Chapter 5: Business Aspect - 17
Completely automated business • Business models that can be fully supported by automated systems • Extreme increase in efficiency, both cost-wise and time-wise • Allows business models based on – transactions with small profit margin • e. g. intermediation services – large volumes of micro-transactions • e. g. digital information, digital media Beyond e-Business © 2015 Paul Grefen Chapter 5: Business Aspect - 18
Trading digital music: completely automated? Beyond e-Business © 2015 Paul Grefen Chapter 5: Business Aspect - 19
Business Aspect Business network operations Beyond e-Business © 2015 Paul Grefen Chapter 5: Business Aspect -
Disintermediation • Disintermediation is removing a link from a business network using e-business technology • Removed link often has an intermediary function between producer and consumer – E. g. retailer in e-shop scenario Beyond e-Business © 2015 Paul Grefen Chapter 5: Business Aspect - 21
Reintermediation • Reintermediation is inserting a new link into a business network using e-business technology • New link often has an intermediary function – E. g. , broker in an electronic market Beyond e-Business © 2015 Paul Grefen Chapter 5: Business Aspect - 22
Deconstruction & reconstruction • Deconstruction & reconstruction are an extreme way to reconfigure a business network: – deconstruct a complete business network into its constituent elements (links) – evaluate the added value of each elements – where necessary throw away a few, combine a few and add a few – reconstruct a completely new network • may use a different business model than the old network, yet provide the same functionality to a market Beyond e-Business © 2015 Paul Grefen Chapter 5: Business Aspect - 23
Deconstruction & reconstruction A B B Beyond e-Business © 2015 Paul Grefen D D A A C E C F D E Chapter 5: Business Aspect - 24
Substitution • Substitution is replacing a link in a network by a functionally similar link • The new link has better non-functional characteristics than the old link, for example one or more of: – is cheaper – is faster – provides better quality – has higher availability – is more trustworthy Beyond e-Business © 2015 Paul Grefen Chapter 5: Business Aspect - 25
Substitution A B C D E A B F D E Beyond e-Business © 2015 Paul Grefen Chapter 5: Business Aspect - 26
Business Aspect Business structures Beyond e-Business © 2015 Paul Grefen Chapter 5: Business Aspect -
Business structures • Business structures are (new) ways to organize the collaboration of parties in a scenario • For example: – Crowdsourcing as a way to use the power of many collaborators (the crowd) to reach business objectives • Business structures are ’powered by’ business network operations Beyond e-Business © 2015 Paul Grefen Chapter 5: Business Aspect - 28
Overview of business structures Business structure Related business network operation Dynamic partnering Substitution Dynamic outsourcing Reintermediation & Substitution Dynamic insourcing Disintermediation & Substitution Crowdsourcing Reintermediation Highly dynamic supply chain Substitution Demand chain Beyond e-Business © 2015 Paul Grefen Deconstruction and reconstruction Chapter 5: Business Aspect - 29
Dynamic service outsourcing Beyond e-Business © 2015 Paul Grefen Chapter 5: Business Aspect - 30
Highly dynamic supply chain EM 1 Beyond e-Business © 2015 Paul Grefen EM 2 Chapter 5: Business Aspect - 31
Supply and demand chain production trigger consumption trigger information flow consumption and production trigger information flow Beyond e-Business © 2015 Paul Grefen Chapter 5: Business Aspect - 32
e-business traditional Hybrid supply/demand chain production trigger customer order decoupling point information flow production trigger inf. flow Beyond e-Business © 2015 Paul Grefen customer order decoupling point consumption and configuration trigger inf. flow consumption and configuration trigger information flow Chapter 5: Business Aspect - 33
Business Aspect Business models Beyond e-Business © 2015 Paul Grefen Chapter 5: Business Aspect -
Business models • A business model describes the basic way in which a business organization makes money. • Well-known example: – e-Retailer (web shop) • There are many business models – and new ones are being created continuously • A taxonomy of reference business models can be used to organize / classify / analyze / create business models Beyond e-Business © 2015 Paul Grefen Chapter 5: Business Aspect - 35
Reference business model taxonomy Business model catalog Class Object Provisioning Intermediation Cooperation Beyond e-Business © 2015 Paul Grefen Reference business model e-Retailer e-Producer e-Integrator e-Marketplace e-Indexer e-Comparator e-Facilitator e-Collaborator e-Sourcer Chapter 5: Business Aspect - 36
E-retailer business model Business model: e-retailer Parties B 2 C Objects Time Scope Drivers Directions Networks Structures Revenue stream B 2 B is possible too Physical goods Digital goods Dynamic services can be offered too, but less common Increasing reach Increasing efficiency On-time and online Integrated bricks and clicks Disintermediation geographic & temporal reach, possibly increasing richness if physical goods Highly dynamic supply chains in specific domains Demand chains in specific domains Margin on sales price of objects Beyond e-Business © 2015 Paul Grefen Chapter 5: Business Aspect - 37
source: businessinsider. com Pets. com (1) Beyond e-Business © 2015 Paul Grefen Chapter 5: Business Aspect - 38
source: tvacres. com Pets. com (2) Beyond e-Business © 2015 Paul Grefen Chapter 5: Business Aspect - 39
E-Sourcer business model • Extreme e-business model – Heavily based on extended reach • Various specializations of crowdsourcing: – Crowdcasting • Using masses to generate ideas for business • Crowdstorming as a subspecialization – Crowdproduction • Using masses to produce (digital) goods – Crowdfunding • Using masses to fund business opportunities Beyond e-Business © 2015 Paul Grefen Chapter 5: Business Aspect - 40
E-sourcer business model Business model: e-sourcer Parties B 2 C reversed object flow Objects Digital goods can include money Time Scope reach on ‘input side’ Directions Dynamic Ultra-dynamic Increasing reach Increasing efficiency On-time and on-line Networks Reconstruction Structures Dynamic service outsourcing Revenue stream Price per output object Drivers Beyond e-Business © 2015 Paul Grefen extreme B 2 C scenario Chapter 5: Business Aspect - 41
Crowdfunding example Beyond e-Business © 2015 Paul Grefen Chapter 5: Business Aspect - 42
Crowdproduction example Beyond e-Business © 2015 Paul Grefen Chapter 5: Business Aspect - 43
Business Aspect The service-dominant view Beyond e-Business © 2015 Paul Grefen Chapter 5: Business Aspect -
Service-dominant logic • Service-dominant logic is an approach that puts the customer experience at the center point of business thinking, starting from: – services are the fundamental basis for business exchange; – services define a value-in-use for a customer, i. e. , an added value by generating a user experience; – goods (either physical or digital) are considered merely distribution mechanisms for service provisioning. Beyond e-Business © 2015 Paul Grefen Chapter 5: Business Aspect - 45
Service-dominant logic example • Music industry: – The essence of the music industry is not the sales of music objects (either physical CDs or digital tracks), but providing a music listening experience which is enabled by music services. – In other words: a music lover is not interested in owning music, but in enjoying it in the right way. – Spotify is a company that works this way. • Tra. XP also embraces service-dominant logic. Beyond e-Business © 2015 Paul Grefen Chapter 5: Business Aspect - 46
Business Aspect Case studies Beyond e-Business © 2015 Paul Grefen Chapter 5: Business Aspect -
POSH • Goal 1: sell without intervention of third-party retailers – increasing geographical (+temporal) reach – disintermediation • Goal 2: offer a broader spectrum of advisory services – increasing richness • Business direction: enhanced CRM • Business model: B 2 B/B 2 C e-retailer Beyond e-Business © 2015 Paul Grefen Chapter 5: Business Aspect - 48
POSH overview Case study: POSH Parties B 2 B B 2 C Objects Physical objects Time Scope Drivers Directions Semi-dynamic Dynamic Increasing reach Networks Enriched CRM On-time and online Disintermediation Structures None as described Model E-retailer Revenue stream Margin on sales price of objects Beyond e-Business © 2015 Paul Grefen mainly geographical, temporal secondary Chapter 5: Business Aspect - 49
TTU • Main business driver: increasing reach – Geographic + Temporal + Modal, e. g. , remote live video conferences around the clock Increasing richness not a big issue Business direction: on-time and online Business network: reintermediation Business structure: dynamic service outsourcing • Business model: none of the discussed • • Beyond e-Business © 2015 Paul Grefen Chapter 5: Business Aspect - 50
richness Increasing reach for TTU s s e n i s u b e TTU n o i t a m r o f s n a tr geo+temp+mod reach Beyond e-Business © 2015 Paul Grefen Chapter 5: Business Aspect - 51
TTU overview Case study: TTU Parties B 2 B Objects Digital services Time Scope Dynamic Drivers Increasing reach Directions Networks On-time and on-line Time-compressed business Reintermediation Structures Dynamic service outsourcing Model E-facilitator Revenue stream Fee per service Beyond e-Business © 2015 Paul Grefen B 2 C possible too, but not main aim geographical + temporal + modal Chapter 5: Business Aspect - 52
Extended (part of) Tra. XP e-business network Airline Booker Rail & Bus Booker Custo mer LSP: TTU Tra. XP Insurance Provider Rental Car Provider Social Media Provider Beyond e-Business © 2015 Paul Grefen Hotel Booker Travel Planner Chapter 5: Business Aspect - 53
Tra. XP overview Case study: Tra. XP Parties B 2 C B 2 B Objects Digital services Time Scope Dynamic Drivers Increasing richness Directions Networks Enriched CRM On-time and online Reintermediation Structures Dynamic insourcing Model E-producer E-integrator Kick-back fees, service fees, subscriptions Revenue stream Beyond e-Business © 2015 Paul Grefen Based on service-dominant logic on-time and online w. r. t. in-travel services Combinations depend on customer segment Chapter 5: Business Aspect - 54
Business Aspect Conclusions Beyond e-Business © 2015 Paul Grefen Chapter 5: Business Aspect -
Business aspect elements order (1) primitives within organization between organizations Business Drivers Business Networked e. Business Models compounds Business Directions Beyond e-Business © 2015 Paul Grefen Business Structures Chapter 5: Business Aspect - 56
Business aspect elements order (2) primitives within organization between organizations Business Drivers Business Networked e-Business Models compounds Business Directions Beyond e-Business © 2015 Paul Grefen Business Structures Chapter 5: Business Aspect - 57
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