UNIVERSITE LIBRE DE BRUXELLES Solvay Business School SEMINAIRE
UNIVERSITE LIBRE DE BRUXELLES Solvay Business School SEMINAIRE DE TECHNOLOGIES DE L’INFORMATION ET DE LA COMMUNICATION GEST 116 e. Business - Introduction Pascale Vande Velde
Content of e. Business course Technologies de l’information et de La communication Introduction – Part II Payments & security Supply chain management V. 1. 4 Solvay Business School 2
Agenda Technologies de l’information et de La communication Trends, facts and figures e. Business value drivers Application areas for e. Business Electronic marketplaces V. 1. 4 Solvay Business School 3
The internet economy boom is over Technologies de l’information et de La communication 1996: Yahoo! quote triples on first day of trading 1999: 188 IPO's double in value on first day (compared to 39 during the previous 24 years combined) 1200 Implosion 1000 800 2000: AOL buys Time Warner for USD 100+ Bn Cisco Microsoft 2001: 100. 000+ lay-offs in internet-related companies (50. 000 in 2000) ; 200+ US dot-coms companies go bankrupt in S 1 2001 Boom Post 2001 : consolidation of some players; market rationalization continues Dow Jones 600 400 In 2003, Amazon books its first net profit 200 0 Nov 1996 V. 1. 4 Nov 1997 Nov 1998 Nov 1999 Nov 2000 Nov 2001 Solvay Business School 4
Key drivers for the penetration of ebusiness Technologies de l’information et de La communication Increasing Consumer Penetration Cooperative Regulatory Environment Compelling Business Value Expanding Technology Infrastructure V. 1. 4 Solvay Business School 5
The recent adoption of the Internet has been truly amazing! Technologies de l’information et de La communication Adoption of Consumer Technologies in U. S. Years to 50 Million U. S. Users 120 100 Medium Telephone 80 Cable Millions of Users 60 Radio 40 20 Years Timeframe Telephone 25 1920 -1945 Radio 38 1922 -1960 TV 13 1951 -1964 Cable 10 1976 -1986 WWW 5 1993 -1998 TV 1990 1995 1980 1975 1970 1965 1960 1950 1945 1930 1925 1920 1955 Internet (World Wide Web) 0 Source: Morgan Stanley, “The Internet Advertising Report, ” 1998 V. 1. 4 Solvay Business School 6
Online usage is growing fast in Europe Technologies de l’information et de La communication NB : online usage measurement based on use of internet at least one hour per month (excluding email). Extrapolation based on two surveys (2, 000 phone interviews + 60, 000 internet questionnaires) n By end 2006, about 50% of the European population will use internet at least one hour per month. The growth curve will then become fairly flat n Internet penetration is the highest in Scandinavian countries with more than 60% of the population online in 2001. Southern Europe lags behind (e. g. Greece, Portugal, Spain, France) n Penetration in Belgium was moderate compared to the European average in 2001 but increased very much in the meantime from 27 to 48% in millions Source: Jupiter MMXI Internet Population Model, June 2002 V. 1. 4 Solvay Business School Online users by country 2001 Online Penetration (users) Online users in Europe 2000 -2006 Online Users in millions 7
Belgium is catching up quickly Technologies de l’information et de La communication n In 2003, about 48% of the Belgian population (> 15 years old) uses internet at least one hour per month n In December 2003, about 4, 0 million Belgians used internet at least one hour per month, which represented a 25% increase compared to October 2002 n 55% of regular home internet users use a high speed connection. It places Belgium amongst the top in terms of broadband penetration in Europe (with Sweden) n The number of connections is stagnating but the mix is evolving towards broadband (cable + ADSL) in millions Online users in Belgium 2000 -2006 Number of private connections in Belgium 1, 49 million connections for 4 million households Sources: Jupiter MMXI Internet Population Model, June 2002, In. Sites Internet Mapping, April 2002 V. 1. 4 Solvay Business School Source: ISPA, 14 th market study, September 30 th 2002 8
Real growth is in Business-to-Business Technologies de l’information et de La communication n By end 2005, online B 2 B spending in Western Europe will be worth close to € 3 trillion, with Germany and the UK accounting for over half of the total n Computer/telecom goods and aerospace industry will be the most impacted by the growth of the B 2 B commerce Online B 2 B spending in Western Europe 2000 -2005 Online B 2 B spending by industry 2000 -2006 Belgium 2001: € 3 Billion 2005: € 50 Billion Percentage of Market Online B-to-B Spending in billions Source: Jupiter European Business-to-Business Forecasts 2000 -2005, September 2001 V. 1. 4 Source: Jupiter Internet B-to-B Commerce Model, June 2000, (US only) Solvay Business School 9
Technologies de l’information et de La communication The B 2 C market is growing very fast but revenues base is smaller n In 2002, online B 2 C spending in Western Europe is worth € 20 billion, which accounts for 4% of the B 2 B market. Online B 2 C spending is forecasted to amount to € 80 billion in 2007 n By end 2007, about 4% of total retail commerce should be done via the internet n Travel, grocery, PCs and books are the most frequently goods bought on the internet n In 2003, Belgian internet surfers bought for about 0, 8 bn EUR on the internet (3 -4 orders a year @ 135 EUR/order). Most purchased goods are books and CDs. 680, 000 Belgians have booked some travels via the internet in 2003 – Source : Insites Consulting Online B 2 C spending in Western Europe 2002 and 2007 Online B 2 C spending mix 2002 € 20 Bio in 2002 Source: Jupiter MMXI Internet Commerce Model, August 2002 V. 1. 4 Solvay Business School 10
B 2 B versus B 2 C e. Commerce Technologies de l’information et de La communication The Greater Growth in B 2 B e. Commerce Is Driven by Fundamental Differences Between B 2 B and B 2 C e. Commerce Business customers are: n V. 1. 4 Access/ familiarity Retail consumers are: – Technology enabled on a broad scale – Still lacking high speed internet access at home – Readily accessible to professional training – Challenged by rapidly evolving technology n Confidence – Comfortable with electronic transactions – Lingering reservations about transacting on-line n Incentive – More cost conscious – More brand conscious – More “bottom line” oriented – Focused on value and price Solvay Business School 11
Technologies de l’information et de La communication Telecommunication developments are key to boost internet penetration in Europe n By end 2007, about 22% of the European households should use a broadband connection (ADSL, cable, fiber) to access internet thanks to the democratisation/penetration of ADSL and an increased use of existing cable infrastructure n Wireless phones will also become an increasing internet access gateway in Europe when data transmission capacity increases (3 rd generation mobiles) Broadband penetration in Western Europe 2001 -2007 Wireless penetration in Western Europe 2001 -2006 Sources: Jupiter MMXI Broadband Internet Model, October 2001 (Western Europe only) In. Sites, Belgium is European frontrunner in broadband Internet use, November 2001 V. 1. 4 Number of Wireless Subscribers in Western Europe Percentage of Households Broadband Households Belgium has one of the highest broadband penetration from 9% in 2001 to 28% in 2007 Percentage of Wireless Penetration in millions in thousands Source: Jupiter MMXI European Wireless Model, 11/01 (Western Europe only) Solvay Business School 12
n Internet-enabled handsets (UMTS, WAP, PAD…) penetration increases n However, use of internet-enabled handsets to access internet and trade via the internet remains limited (a. o. WAP technology did not meet expectations) n Data transmission capacity increase is expected to boost the use of third generation phones in the coming years Internet-enabled handsets and penetration in Western Europe 2001 -2006 Active wireless internet users in Western Europe 2001 -2006 Penetration of Internet-Enabled Handsets Number of Internet-Enabled Handsets in Western Europe Number of Active Wireless Internet Users in Western Europe in millions Percentage of Wireless Subscribers Who Are Active Users Technologies de l’information et de La communication Telecommunication developments are key to boost internet penetration in Europe/2 Source: Jupiter MMXI European Wireless Model, November 2001 (Western Europe only) V. 1. 4 Solvay Business School 13
Technologies de l’information et de La communication Digital TV is another technology facilitating internet access TV Households in Western Europe 1999 Device Platform Increase of broadcasters’bandwith New services and revenue streams New content Analog TV Features One-way transmission Analog signal (via satellite with set-top box) DTV One-way transmission Digital signal and set-top box i. DTV Two-way interactive services Digital signal and set-top box Households (in millions) Average Penetration of broadcast platforms in Western Europe: Terrestrial: 50% Cable: 31% Satellite: 26, 8% Households (in millions) TV Households in Western Europe 1999 -2008 45 IDTV penetration is relying on both interactive device platforms (PC’s, TV’s, PDA, smartphones…) and broadcasts platforms (terrestrial, cable, satellite) In the long-term, nearly all DTV households will be i. DTV-enabled 108 Source: Jupiter Strategic Planning Services: European Digital TV, markets and platforms, 2000 V. 1. 4 Solvay Business School 14
Technologies de l’information et de La communication Digital TV is another technology facilitating internet access/2 Digital and Analog TV penetration in Western Europe 1999 -2008 Low takeoff is observed due to high investments required for the solution: - Costs to broadcasters of DTV transmission (license, access, bandwidth, …) - Conversion and upgrade costs for new or adapted modulation standard (e. g. : $7 -10 M for a 2001 split between households: 2008 split between households: All analog: 137, 5 M Digital Terrestrial: 0, 8 M Digital Cable: 2 M Digital Satellite: 8, 5 M All analog: 44, 8 M Digital Terrestrial: 29, 9 M Digital Cable: 39, 4 M Digital Satellite: 38, 8 M new station, $1 -3 M to convert an existing one) - Development and manufacturing costs (station, antenna, components, broadband devices, broadcast platforms, …) - Partnerships costs (opportunity costs due to various intermediaries) - Uncertainty of consumer demand: cultural and sociodemographical aspects - Broadband Telco's market national and regional characteristics - Cable operators don’t have the money (huge debt structure) - Limited opportunities in i. TV fees (retail market) Source: Jupiter Strategic Planning Services: European Digital TV, markets and platforms, 2000 V. 1. 4 Solvay Business School 15
Cooperative Regulatory Environment Technologies de l’information et de La communication § Pricing of internet services and free competition § Dial up § ADSL V. 1. 4 § Internet security (e. g. payments) § Legal recognition of digital signatures § Application of commercial laws Solvay Business School 16
Agenda Technologies de l’information et de La communication Trends, facts and figures e. Business value drivers Application areas for e. Business Electronic marketplaces V. 1. 4 Solvay Business School 17
Value drivers Technologies de l’information et de La communication Value Creation Levers Share Price Market Perception Operational & Financial Performance Revenue Enhancement Value Creation Cost Reduction Asset Intensity Reduction Sales Volume Opportunities Enhance External Communication Increase Brand Acceptance Benefits Share Price See other levers Reach / access to new markets New value propositions Creation of new product / services Deeper customer relationships Price Brand image building Demand-supply matching Effective customer segmentation COGS Sourcing price reduction Better price-value matching Cost-to-serve improvement Sales & General admin. costs Transaction cost reduction Logistics network efficiency Effective marketing Enforcing company policy compliance Working Capital Inventory level optimization Time-to-market reduction Forecast accuracy improvement Revenue enhancements Typical: 10 -20% Best case: 55% Cost reduction Typical: 20 -45% Best case: 70% Asset intensity reduction Typical: 20 -60% Fixed Assets V. 1. 4 Logistics network productivity improvement Fleet productivity improvement Solvay Business School Best case: 90% 18
Revenues drivers Technologies de l’information et de La communication Revenue Enhancement e. Commerce Drivers Benefits New Value Propositions n Customized offerings (one-to-one marketing) n Value pricing n Individualized shop/buy/own experience n Micro-transactions n Intelligent products/services New Channels/Reach n Electronic advertising n Electronic merchandising n Electronic sales n Electronic servicing/support Individualized Customer Lifecycle n Improved contact rates n Improved targeting n Improved consideration rates n Improved closing rates (100% Dell) n Higher share of wallet (up to 300% e. g. Schwab) n Improved customer retention V. 1. 4 Solvay Business School 19
Cost drivers Technologies de l’information et de La communication ROUGH ESTIMATES Organizational Efficiency Typical Savings Level Category Human Resource Management 20 -30% Technology Facilitated Training 20 -30% 50 -80% IT Maintenance/Support Internal Interactions Asset Utilization Supply Chain Operating Costs Inventory Carrying Cost 25 -50% 10 -25% e. Business Procurement Process Buying from Suppliers External Interactions Sales and Marketing Selling to Customers V. 1. 4 Procurement Spend 20 -30% 5 -15% 20 -50% Customer Service 30 -45% Technical Support 30 -55% Solvay Business School 20
Asset Intensity drivers Technologies de l’information et de La communication Asset Intensity Reduction e. Commerce Drivers Benefits Increase Working Capital Turnover n Improved inventory turns from value network compression n Increased receivable turns from e. Commerce enabled settlement Reduced Physical Infrastructure n Reduced need for physical storefront n Reduced need for warehousing V. 1. 4 Solvay Business School 21
Agenda Technologies de l’information et de La communication Trends, facts and figures e. Business value drivers Application areas for e. Business Electronic marketplaces V. 1. 4 Solvay Business School 22
Application areas for e. Business Technologies de l’information et de La communication e. Enterprise e. Supply Side Product Development Procurement e. Demand Side Production Marketing Sales After Sales Support e. Mediary V. 1. 4 Solvay Business School 23
Supply side e. Business Technologies de l’information et de La communication e. Enterprise e. Supply Side Product Development Procurement e. Demand Side Production Marketing e. Mediary V. 1. 4 Solvay Business School Sales After Sales Support Supply side B 2 B e. Commerce offers tremendous opportunities for cost reduction and operational improvements 24
Supply-side e. Business Technologies de l’information et de La communication Supply Side e. Commerce Opportunities V. 1. 4 Definition e. Enabled Collaborative Engineering and Design Work with suppliers to design and engineer products for competitive advantage u Joint product development u Prototype development u Testing e. Procurement Purchasing of hard goods and services u Supplier selection u Order placement u Payment e. Supply Chain Management of the supply process u Demand/Supply forecasting u Inventory management u Quality assurance Solvay Business School 25
Technologies de l’information et de La communication Fiat Reduced Product Development Costs by Testing Auto Design Concepts on the Internet Objective Evaluate users’ needs for the next generation Punto, Fiat’s best selling car Description n Customers answered a Web-based survey asking them to: n indicate auto design preferences n describe what they hate in a car n suggest ideas for new features n Customers designed a car, selecting from various styles and features; final result displayed on-screen n Software captured result and traced steps customers took to evaluate and select options Results n Received over 3, 000 surveys totaling 30, 000 pages of data in three months n Survey participants were in Fiat’s key target segment n Information influenced styling and concept designs n Test cost $35, 000 -- about the cost of running multiple focus groups V. 1. 4 Solvay Business School 26
Technologies de l’information et de La communication Fujitsu used e. Procurement improve its procurement processes Objective Empower and enforcing best procurement practices to drive procurement efficiency. Commerce. One Procurement Software Capability Description n Procurement practices include: on-contract compliance, vendor consolidation, spend waste reduction, and asset reuse n Procurement tied in with ERP applications and runs on PCs through a web browser n Program allows: Automatically clearing requests through approval and purchasing Reduces ability to engage in “maverick” purchases of higher-cost products through streamlined process Allows analysis of buying patterns Enables sharing data with suppliers, creating fact-based contract negotiating leverage Results n Within a year since deploying the program, Fujitsu realized a 2 -4% savings n Estimates project a 12 -27% savings in operational spending Source: Electronic Commerce, Company web site, Commerce. One Web site n Approval process shortened to a standard of 24 hours from a less predictable timeline. Examples of poor performance of past requisition orders include a $750 order “lost” for 2 months n System rolled out to approximately 350 employees V. 1. 4 Solvay Business School 27
Demand side e. Business Technologies de l’information et de La communication e. Enterprise e. Supply Side Product Development Procurement e. Demand Side Production Marketing e. Mediary V. 1. 4 Solvay Business School Sales After Sales Support Participating in demand side e. Commerce helps to achieve revenue enhancements, reduced SG&A costs and increased customer satisfaction 28
Demand side e. Business Technologies de l’information et de La communication Demand Side e. Commerce Opportunities V. 1. 4 Definition e. Sales & Service Sales and marketing of products and services u Tailored online catalogs and ordering u Sharing inventory and production capacity information u Online order fulfillment and payment e. Support Customer management services u Self-service for customer inquiries u Tailored service offerings u Integration with customer systems u Multiple resolution channels e. Supply Chain Management of the distribution process u Collaborating with supply chain partners u Demand forecasting u Integration with customer systems u Velocity: rapidly pulling together the right partners and minimum scale to deliver compelling new product/service offerings Solvay Business School 29
Technologies de l’information et de La communication Dell Computer used the Internet to improve its sales processes to corporations Objective Reduce the costs associated with processing a purchase order and create one-to-one relationships with top customers Description n Developed Premier Pages, a web site customized for each corporate customer n Allows customers to create custom configurations, contact customer support, place orders, and track inventory n Connects directly to customer procurement managers for order approval, submission, and tracking n Provides dynamic product pricing Results n Ranked number one in corporate PC sales. Internet reached $30 million per day (8/99) n Created 27, 000 private intranet sites for corporate customers in two and half years since the program’s debut n Supply PC’s to numerous blue-chip customers, including Bayer, Toyota, Amazon. com, and Boeing Source: Company Web Site, Industry Reports V. 1. 4 Solvay Business School 30
Technologies de l’information et de La communication Cisco Is one of the leaders in implementing demand side B 2 B e. Commerce capabilities e. Sales & Marketing n Electronic catalogs, online sales support and order tracking reduce inaccurate orders from one in three to one in fifteen n “Commerce Agents” to automate and facilitate a dozen different functions e. Customer Service n Over 80% of inquires previously handled by the call center are now answered electronically reducing support staff by 300%. n Savings of $2 -15 per inquiry translate into $10. 5 M saved monthly n Customers receive extensive product information including email alerts on software bugs, product documentation, product pricing and software downloads e. Supply Chain Management n 55% of orders now pass directly from Cisco to their suppliers Source: The Economist, “When Companies Connect, ” June 26, 1999. The Gartner Group V. 1. 4 Solvay Business School 31
The e. Enterprise Technologies de l’information et de La communication e. Enterprise e. Supply Side Product Development Procurement e. Demand Side Production Marketing e. Mediary V. 1. 4 Solvay Business School Sales After Sales Support The adoption of e. Commerce within the enterprise can result in significant operating efficiencies and increased employee satisfaction 32
The e. Enterprise Technologies de l’information et de La communication V. 1. 4 Enterprise e. Commerce Opportunities Definition e. HR u Intranet u e. HR focuses on leveraging electronic channels for recruiting, orienting, developing and managing human capital more effectively and efficiently Use of generic internet technology to enable effective internal communications & collaboration – Inter-office communication – Knowledge management and exchange – Document sharing Solvay Business School 33
Technologies de l’information et de La communication Use of e. HR to achieve efficiencies in administrative processes and increase employee satisfaction Objective n Reduce the time required for HR administration and cycle time for processing, and thus improving quality of service to HR customers Description n Exploited Intranet technologies to develop a self-service application focused on the key HR processes for employees and managers n Built a standards-based, open network architecture n Created a pilot application and distributed it to approximately 100 managers for technical and functional feedback (larger rollout to follow) Results V. 1. 4 n Produced >$2. 5 m HR and line management cost reductions n Reduced total cycle time for processing and approval from weeks to hours n Empowered line managers to manage human capital more effectively n Improved employee satisfaction with HR and improved HR department credibility with their customers Solvay Business School 34
Use of e. HR to achieve efficiencies in administrative processes and increase employee satisfaction Technologies de l’information et de La communication Attract Deploy Develop Recruiting Deployment Learning • Jobs Reqs • Referrals • Applicant Process • Assignment • Skills Tracking E-scheduling www. mycandidature. com V. 1. 4 Performance Mgmt • Training admin • Appraisals • Online delivery • 360’s https. mylearning. ac • Online testing • Goal Setting centure. com • Job profile GAT maintenance Solvay Business School Reward Exit Retirement and severance • Redeployment/o http: //my. Holdings. a • Benefits/Life Eventsutplacement eccenture. com, zone Retirement, mgmt Retirement, stock options • Pension and exit • Payroll program admin • Time and artes Expenses 35
Technologies de l’information et de La communication The Introduction of an Intranet Enabled Cisco to Optimize Its Workforce Performance Objective Cope with rapid growth without increasing operating costs as well as shortening lead times. Description n Set of Intranet tools that provides scalability through automation & self service, including: n personalized portal n employee administration/ directory n recruiting & hiring n payroll, expenses reporting & compensation review n training system registration n employee communications Results n n n V. 1. 4 Increased employee satisfaction/ knowledge sharing Annual financial savings of $24 m n Reduced operating expense 11$M n Headcount avoidance 2$M n Productivity increase 5$M n Improved info flow 16$M n Maintenance & development -10$M 1% added value of getting info/learning 85$M Solvay Business School 36
Shell Technologies de l’information et de La communication Objective Drastically improve human performance by leveraging intranet for communications & knowledge sharing. Description n Pan-European intranet linking 31 operating units - functionality includes communications, training & coaching n Provides training tools, recommendations & guidance n Provides tools & guidance for coaching n Access to personnel database with personnel profile n Real time discussion forums & feedback section Results n More efficient shared service organization & processes - $m in reduced costs n More efficient HR processes - Open Resourcing n High quality internal communications and knowledge- based communities n Innovative supplier relations - Honeywell/JWT n Improved customer service V. 1. 4 Solvay Business School 37
The e. Mediaries Technologies de l’information et de La communication e. Enterprise e. Supply Side Product Development Procurement e. Demand Side Production Marketing Sales After Sales Support e. Mediary V. 1. 4 Solvay Business School 38
Emediaries description Technologies de l’information et de La communication e. Mediary Characteristics: Customer e M e d i a r i e s n “Electronic Hub” n Market making mechanism n Industry or business function specific Distributor Value of e. Mediaries: Manufacturer n Organize industries of fragmented buyers and sellers n Create new distribution channels Suppliers n Bring new products and services to market Source: Business 2. 0, “Let’s Get Vertical”, Sept 1999 V. 1. 4 Solvay Business School 39
Value added Technologies de l’information et de La communication e. Commerce Intermediaries Aggregate Buyers and Suppliers n Improved matching of potential buyers and sellers in a market n Greater access and options for both buyers and sellers Reduce Costs n Reduced searching and information transfer costs n Standardized buyer procurement Create New Marketplaces n Provide efficient venue to buy/sell surplus inventory or exchange excess capacity n Create liquidity for new products and services Source: September 1999 Business 2. 0, “Let’s Get Vertical” V. 1. 4 Solvay Business School 40
Two key models define the way e. Mediaries are established and structured Technologies de l’information et de La communication The Business-to Business Web Vertical e. Mediaries Steel Plastics Chemicals Horizontal e. Mediaries Examples: Ariba, Commerce. One, Oracle, i 2 Technologies, SAP, … Procurement e. Catalogs Examples: Chem. Connect. com Plastics. Net. com e. Steel. com (New View Technologies) Source: September 1999 Business 2. 0, “Let’s Get Vertical” V. 1. 4 Solvay Business School 41
Examples of vertical e. Mediaries Technologies de l’information et de La communication Industry V. 1. 4 Company Objective Chemicals n Provide an online marketplace for buyers and sellers of life science chemicals products Electronics n Serve as an intermediary for electronics manufacturers and electronic parts suppliers Financial Services n Act as electronic go-between for mortgage originators and the secondary mortgage market (lenders, brokers and corporates) Industrial Products n Provide a global electronic marketplace for the selling and purchasing of steel Paper n Connect buyers with suppliers of paper and related equipment through electronic trading floor and classifieds Plastics n Provides a sales and communications network for plastics industry players Solvay Business School 42
Sample of horizontal e. Mediaries Technologies de l’information et de La communication Business Functions Acquisition of nonproduction supplies ecommerce, ecatalogs V. 1. 4 Company Objective n Automates procurement of non-production supplies n Automates indirect goods and services supply chain activities n Rapid implementation (ASP) of ecommerce solutions for industrial and high technology companies (engineered products) MRO procurement n Creates an on-line MRO market for capital asset intensive industries Logistics n Connect shippers who have loads they want to move cheaply with fleet managers who have space to fill Energy Management n Help businesses understand manage their energy consumption for more effective use of power Solvay Business School 43
Agenda Technologies de l’information et de La communication Trends, facts and figures e. Business value drivers Application areas for e. Business Electronic marketplaces V. 1. 4 Solvay Business School 44
Marketplaces profiling Technologies de l’information et de La communication n In Q 42001, Booz Hamilton identified 2, 233 e marketplaces and profiled 1, 802 of them : Type of model V. 1. 4 % of marketplaces Comments Examples Developed by pure play operators 6% of marketplaces listed. Others funded by private equity Focus on cash generation Autotradecenter. com Independent 92% Consortium 5% or 92 sites Several industry players join forces to create a common forum for the exchange of goods and services Deep pocketed founders Possible difficulties to align interests of all parties Covisint. com, transora. com, … Private 3% or 57 sites One company develops a site for its customers and suppliers to facilitate transactions up and down the value chain Most common function is online cataloging Dell. com Solvay Business School 45
Technologies de l’information et de La communication n Marketplaces profiling (cont’d) In Q 42001, Booz Hamilton identified 2, 233 e marketplaces and profiled 1, 802 of them : Geographic breakdown Service offering Core service V. 1. 4 % offering Information exchange 65% Digital catalogs 63% Online auctions 55% Logistics services 21% Supply chain planning 8% Design collaboration 4% Other value added services 45% Solvay Business School 46
Marketplaces profiling (cont’d) Technologies de l’information et de La communication n With the help of the Darden Graduate School of Business at the University of Virginia, Booz Allen revisited a large sample of the e-marketplace sites (approx 1, 100 out of 1, 802) to document the failure rates in Q 32002 : – 45% of the e-marketplace have disappeared • • 21% of consortium-based sites More than 45% of independent sites – Failure rates do not differ by geography – Differences by sector • • • V. 1. 4 60% of e-marketplaces in textile and advertising/medi failed 35% of e-marketplaces in financial services, paper, aerospace and printing failed 45% of generalist sites failed Solvay Business School 47
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