e-Business
explained through an e-Business Model approach
MATIS
Janvier 2002
Yves Pigneur
HEC Lausanne
yves.pigneur@unil.ch
(+41 21) 692.3416
Université de Lausanne
WEB | AGENDA | FIN
Agenda
•
e-Business
–
•
pages
an e-Business Model Approach to Strategy
Business model components
– Product innovation
•
> Model
15
Value proposition, Target Customer and Capabilities
– Customer Relationship
•
35
Information, Feel & Serve and Trust & Loyalty
– Infrastructure Management
•
63
Assets, Activity Configuration and Partner Network
– Financial Aspects
•
•
•
80
Revenue Model, Cost Model and Profit/Loss
Measure
Simulation
– scenarios for uncertainty
© 2002 Pigneur, HEC Lausanne
> Measure
91
> Scenario
105
e-business 2
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e-Business and the « Hype cycle »
[Gartner Group, 2001]
© 2002 Pigneur, HEC Lausanne
e-business 3
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General context
[Bloch, 1999]
technology
allows
Electronic commerce
... improve
Levier to change
Customer
Relationship
Strategy
Product
Innovation
reduce
logistics
infrastructures
Allows
Finance
Revenue
impact
create
Business models
Brand
Promotion
Customer service
Costs
Diffusion time
Learning
New products
New channels
New businesses
IT strategy
impact
infrastructure
standard
Industry
Intermediary
integration
Community
© 2002 Pigneur, HEC Lausanne
e-business 4
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«How the Internet influences industry structure»
[Porter, 2001]
© 2002 Pigneur, HEC Lausanne
e-business 5
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Strategic positioning
[Porter, 2001]
STRATEGY
« ABSENCE OF STRATEGY »
Profit
Revenue, market share
customer acquisition
Value & direct revenue (higher price)
Indirect revenue (advertising)
Priority and focus
All opportunities
Differentiated value chain
Imitation and reproduction (cloning)
Control of internal resources
Partnerships
Differentiation
Price wars
1.
2.
3.
4.
5.
6.
Correct goal
Attractive value proposition
Differentiated value chain
Priorities
Integration (coordination)
Continuity (of direction)
© 2002 Pigneur, HEC Lausanne
e-business 6
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Why an e-Business Model Approach to e-Strategy?
• A buzzword with no precise definition
– […] Executives, reporters and analysts who use the term don't have a clear
idea of what it means. They use it to describe everything from how a company
earns revenue to how it structures its organization [Linder, 2001]
• Dynamic business environment
– Shorter product life cycles
– Increased & global competition
– New Information and Communication Technologies (ICT)
• Evolving dynamic business networks
– Business Webs [Tapscott & al., 2000]
– Co-opetition [Brandenburger & al., 1996]
– Fluid organizations [Selz, 1999]
© 2002 Pigneur, HEC Lausanne
e-business 7
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e-Business Models: Opportunities
A company that defines it’s business model can...
• …react to rapid change
– Business architects/designers
• …share knowledge
– Business decisions
– buy in
• …simulate & learn
– System dynamics
– Scenarios
© 2002 Pigneur, HEC Lausanne
e-business 8
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e-Business Model Approach: what is it?
Planning level
Architectural
level
Implementation
level
Strategy
Business
Model
Business
Processes
Information &
Communication
Technology (ICT)
pressure
e-Business
opportunities & change
e-Business
processes
e-Business Technology layer
© 2002 Pigneur, HEC Lausanne
e-business 9
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Models and ontologies
• The Enterprise Ontology
> html
– Collection of business terms and definitions
(activities, organization, strategy, marketing, time …)
• Toronto Virtual Enterprise Ontology (TOVE)
• Ontology Interchange Language (OIL)
– Primitives for modelling (frame & logic) and automatic reasoning (consistency)
Still to conceive for (e-) business models
© 2002 Pigneur, HEC Lausanne
e-business 10
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Business model
WHO?
How to manage
relationships with
customers, satisfy
them and generate
revenues to be on the
winning side?
Customer
Gestion
des
Relationship
relations-clients
Product
Innovation
innovation
produit
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?
© 2002 Pigneur, HEC Lausanne
Infrastructure
Gestion des
logistics
infrastructures
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?
Financial
Aspects
aspects
financiers
HOW MUCH?
What is the revenue
model? the profit
model? designed to
last?
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e-Business Model Approach: Core Elements of e-Business?
[Ben Lagha, Osterwalder, Pigneur, 2001]
CUSTOMER
RELATIONSHIP
PRODUCT
INNOVATION
value for
resources for
INFRASTRUCTURE
MANAGEMENT
Information
Target Customer
Resources/assets
Feel & serve
Value proposition
Activities/processes
Trust & loyalty
Capabilities
Partner network

Revenue
price
Value added
+
Costs
profit
The e-Business Model Framework (eBMF)
© 2002 Pigneur, HEC Lausanne
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e-Business Model Approach: Relationships between concepts
value for
PRODUCT
INNOVATION
resource
for
INFRASTRUCTURE
MANAGEMENT
© 2002 Pigneur, HEC Lausanne
CUSTOMER
RELATIONSHIP
feedback for
resource
for
built
on
cost
resource for
revenue for
FINANCIAL
ASPECTS
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e-Business Model Approach: Relationships between concepts
PRODUCT
INNOVATION
CUSTOMER
RELATIONSHIP
TARGET CUSTOMER
INFORMATION
has needs
value for
sold through
VALUE PROPOSITION
to enable
supposes
resource
for
to collect
FEEL & SERVE
feedback for
CAPABILITIES
builds
on
to improve
to establish
to improve
TRUST & LOYALTY
resource
for
revenue for
builds
on
INFRASTRUCTURE
MANAGEMENT
FINANCIAL
ASPECTS
RESOURCES & ASSETS
REVENUE MODEL
resource for
builds on
cost
ACTIVITY CONFIGURATION
resource for
builds on
PARTNER NETWORK
© 2002 Pigneur, HEC Lausanne
to increase
PROFIT / LOSS
resource for
diminishes
COST MODEL
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Product Innovation
Product
Innovation
[Ben Lagha, Osterwalder, Pigneur, 2001]
CUSTOMER
RELATIONSHIP
resources for
INFRASTRUCTURE
MANAGEMENT
Information
Target Customer
Resources/assets
Feel & serve
Value proposition
Activities/processes
Trust & loyalty
Capabilities
Partner network

Revenue
price
© 2002 Pigneur, HEC Lausanne
PRODUCT
INNOVATION
value for
Value added
+
Costs
profit
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Target Customer : Geographical Reach
• With the Internet you are immediately global
– increasing reach
– languages, cultures and legal systems…
• Location loses importance
– Surgeons in New York can operate in France
(Operation Lindbergh) - (pdf)
• Low distribution costs for digital products
– text, images, sound, software, numbers
• Increased competition
– a tailor in Shanghai can hand-make a suit for
a lawyer in Boston and FedEx it to him
© 2002 Pigneur, HEC Lausanne
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Target Customer : Irrelevance of Time
Product
Innovation
• Always open (24/7)
Increasing routinization/automation
© 2002 Pigneur, HEC Lausanne
www.leshop.ch
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Target Customer : Increasing Flow of Information
Product
Innovation
• Decreasing searching costs - the
customer is better informed
www.comparis.ch
© 2002 Pigneur, HEC Lausanne
• Higher expectations
“the competition is
just one-click-away”
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Value Proposition
Product
Innovation
To characterize product innovation, the value proposition
• defines,
• the actual product or service, and
• the value or benefits perceived by customers of the products and services
offered by the firm.
• In the case of e-business this offer naturally includes a strong information
system component, principally the Internet.
TARGET
Targeted customers
© 2002 Pigneur, HEC Lausanne
VALUE PROPOSITION
CAPABILITES
Competencies, aptitudes
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Value proposition - examples
• Facilitate research
– and reduce transaction costs
reservation
• Speed up distribution
– particularly digital goods (written, music, image, software)
ticketless
• Improve the quality of service
– by personalization, for example
• Improve facility and experience of buying
– capitalizing on game aspects
Barcelone
Loterie Romande
• Improve the transparency of information
– by opening up the information system
Yield Management
• Develop a sense of community
– and improve the diffusion of knowledge,
contacts and trust
• Bind complementary products
© 2002 Pigneur, HEC Lausanne
easyCar
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Value Proposition
Product
Innovation
PRODUCT INNOVATION
innovation
service
level
CUSTOMER RELATIONSHIP
© 2002 Pigneur, HEC Lausanne
VALUE
PROPOSITION
cost
advantage
INFRASTRUCTURE MANAGEMENT
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Value Proposition : Case Study
Product
Innovation
Audible.com makes it possible for the customer to
listen to audiobooks, lectures, radio, newspapers
and more, either at their desktop computer or onthe-go with a portable device. (complementary
product innovation)
The value for the customer consists in :
• A new complementary product for computers &
portable devices (product innovation)
• The low price of the product (because of digital
distribution)
• Speeded up distribution & access (over the Internet)
• Improved shopping experience (through samples &
critics)
© 2002 Pigneur, HEC Lausanne
e-business 22
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Value Proposition : Case Study
Product
Innovation
LiveManuals helps people find interactive product
manuals on the Web to understand how their
products work (innovation + service)
The value for LiveManuals customers consists in :
•
•
•
•
•
Finding support information for thousands of products (product innovation)
Using live product simulations to see how they work
Getting fast answers with interactive user manuals
Tracking warranties (personalization)
Storing all the customer’s model numbers in one place (personalization)
The value for LiveManual partners consist in :
• Making their products more accessible
• Specializing on their core competencies
© 2002 Pigneur, HEC Lausanne
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Value Proposition : Case Study
Product
Innovation
The medical nutrition network of Novartis
wants to help people deliver better
nutritional care.
(service)
The value consists in :
• Educational material
• Updates on the latest in the Medical
Nutrition field at Novartis
• Support services for consumers, health
professionals and patients
© 2002 Pigneur, HEC Lausanne
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Capabilities
[Bagchi, 2000]
Product
Innovation
TARGET
Customers
VALUE PROPOSITION
Capabilities
Competencies
© 2002 Pigneur, HEC Lausanne
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Capabilities Network
[IBM, 1999]
•
•
Product
Innovation
A capability depends on another
When its performance depends on the another’s
attract
people
Forum
with authors
© 2002 Pigneur, HEC Lausanne
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Classification of business models (I)
•
Brokerage Brokerage
– Buy/sell fulfillment, market exchange, business trading community, buyer aggregator,
distributor, virtual mall, metamediary, auction broker, reverse auction, classified, search
agent
•
Advertising Advertising
– Generalized portal, personnalized portal, specialized portal, attention/incentive marketing,
free model, bargain discounter
•
Infomediary Infomediary
– Recommender system, registration model
•
Merchant Merchant
– Virtual merchant, catalog merchant, surf-and-turf, bit vendor
•
•
•
Manufacturer Manufacturer
Affiliate Affiliate
Community Community
– voluntary contributor model, knowledge networks
•
•
Subscription Subscription
Utility Utility
© 2002 Pigneur, HEC Lausanne
http://ecommerce.ncsu.edu/business_models.html
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Classification of business models (II)
Integrated
function
[Timmers, 1998]
Business-to-business
Value chain integrator
eMerge
Functional integration
Third party marketplace
Collaboration platform AssureNet
Virtual community
iVillage
e-mall
Buy.com
value chain service provider FedExp Intership
e-procurement
Single
functions
Gofish
e-shop
e-auction Ricardo
Saci
Le Shop
lower
© 2002 Pigneur, HEC Lausanne
Trust service
Swisskey
Info brokerage Reuters
Degree of innovation
higher
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Classification of business models (III)
auto-organization
[apscott, 2000]
Dynamic pricing
creativity
AGORA
ALLIANCE
eBay, PriceLine …
AOL, iVillage …
Distributive network
hierarchy
Control
FedExp, UPS …
AGGREGATION
VALUE CHAIN
Amazon, Chemdex …
Dell, Cisco …
Selection and convenience
low
Process integration
high
Integration
© 2002 Pigneur, HEC Lausanne
e-business 29
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Classification of business models (IIIb)
[apscott, 2000]
www2.actnet.com/pdf/2410671.pdf
© 2002 Pigneur, HEC Lausanne
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Classification of business models (end)
Group buying:
Cendant
Mercata
Accompany
Online
buy
plate-form:
TPN Register, linkom
goFish
auction:
eBay
PriceLine
Ricardo
Electronic
market
search:
Acses
aggregation:
EMB
Electronic
barter
low
Influence of buyer
high
Portals:
AOL, Yahoo
Zdnet
Swap
Barter
Alaxis
low
Online
sale
Products:
Amazon
LeShop
Brun Passot
Services:
AutoWeb
E*trade
easyJet
high
Influence of seller
© 2002 Pigneur, HEC Lausanne
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Multi-role models - syndication
[Werbach, 2000]
product
infrastructure
customer
ROLE
SOURCES
SYNDICATORS
DISTRIBUTORS
CUSTOMER
Missions
Create the
content
Assemble the
content
Manage the
relationship
between the
sources and the
distributors
Deliver the
content to the
consumers
Explore the
content
iSyndicate
Linkshare (e-comm)
Screaming Media
Women.com
Yahoo!
E*Trade
Internet
•
•
•
Inktomi
Quote.com
Create revenues
by subscription,
payments or
advertising
Delivery of an information that will be reused and
integrated in an other one,
for a payment generally in the form of a
subscription
with a complicated content management
> ICE
© 2002 Pigneur, HEC Lausanne
iSYNDICATE
1’200 editors
270’000 sites web
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Multi-function model & ASP
•
•
•
•
Complete coverage of process or a value system
Deep knowledge of the profession
High added value
High differentiation
• ASP (application service provider)
Target
professional
Value proposition
multiple
Aptitudes
difficult
© 2002 Pigneur, HEC Lausanne
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Multi-technology model – wireless
Auctions
Portals
• Voice
© 2002 Pigneur, HEC Lausanne
• Internet
• WAP
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Customer Relationship
Customer
relationship
[Ben Lagha, Osterwalder, Pigneur, 2001]
CUSTOMER
RELATIONSHIP
resources for
INFRASTRUCTURE
MANAGEMENT
Information
Target Customer
Resources/assets
Feel & serve
Value proposition
Activities/processes
Trust & loyalty
Capabilities
Partner network

Revenue
price
© 2002 Pigneur, HEC Lausanne
PRODUCT
INNOVATION
value for
Value added
+
Costs
profit
e-business 35
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WEB | AGENDA | FIN
Feel and serve customer
Customer
relationship
[Kalakota, 2001]
• Interactive order by the customer
– selection of the model, personalization, receiving of price, receiving of a
confirmation
• delivery of the model
– without having it in stock, by assembling the order, on time with a minimum cost
Manufacture and sale products
In-house core
competencies
Rigid
processes
Products/
services
channels
Customers
Flexible
processes
Outsourcing/
In-house
competencies
Feel and serve customers
Customers’
needs
© 2002 Pigneur, HEC Lausanne
Integrated
channels
Products/
services
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Commercial transaction
Customer
relationship
Buyer
Consume
Query
information
influence
Negotiate
BUY
goods
Find
customer
Negotiate
payment
Promote
product
Find
source
information
information
Identify
product
SELL
Serve
Answer
seller
awareness
© 2002 Pigneur, HEC Lausanne
evaluation
purchase
After-sale
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CRM – Customer Relationship Management
Customer
relationship
– Sales force (SFA - Sales Force Automation)
• Prevision, contacts, estimate, proposition, follow up …
– Convert a visitor to a customer and keep the customer
SALES
Customer Base
SERVICE
Customer care
– Call center, messaging, web …
– Self-service
– Pro-active, quality of service, …
© 2002 Pigneur, HEC Lausanne
MARKETING
– initiative, campaign
– from telemarketing to messaging
– one-to-one marketing
personalization
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Feel & Serve : What is a Channel?
Customer
relationship
• A channel can be defined as a set of mechanisms or a network via
which a firm “goes to market” and delivers its value proposition.
– Owned channels - direct (i.e. Web, phone, fax…)
– Owned channels - indirect (i.e. brand shops)
– Partner channels (intermediation i.e. retail, shops, ...)
• More precisely it defines how a firm is “in touch” with its customers for a
variety of tasks
– Customer Buying Cycle (CBC)
– Customer Service Life Cycle (CSLC)
© 2002 Pigneur, HEC Lausanne
The purpose is to make the
right quantities of the right
products or service available at
the right place, at the right time
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Feel & Serve : Customer Buying Cycle
Customer
relationship
[Muther, 2000; Ives, 2000]
Implementation and Use
Training
Monitoring
Maintenance
Troubleshooting
Reverse Logistics (Returns)
Life Cycle Management
Community
Advertising
Promotions
Public Relations
Partnerships

AFTER
SALES
AWARENESS

Offer (Specification)
Negotiation
Decision
Contract
Order & Order Tracking
Billing & Payment
(Financing)
(Risk taking)
Fulfillment
© 2002 Pigneur, HEC Lausanne

PURCHASE
EVALUATION

Information
Consulting
(&Requirements)
Specification
Testing
(Community)
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Feel & Serve : Channel Design
Barnes & Noble Inc.
Customer
relationship
CHANNEL
Awareness
Evaluation
Purchase
After sales
Barnes and Noble
Stores
(Retail)
Promotion of
authors and books
Reading corners
Coffee shops
Sales person
Cash registry
(cash/credit card)
Return books
barnesandnoble.co
m
(Website)
Banners to books
etc.
Search function
Customer review
Critics
Excerpt
Shopping cart
checkout
(Credit card)
Order status
Return books
Transaction history
Affiliation Network
(Internet)
Specialized
affiliate Websites
Expert
commentaries
Recommendation
Barnes and Noble
University
(Website)
Free online courses
Courses based on
books etc.
TV, Print, Movies
(Mass media)
Mass advertising
© 2002 Pigneur, HEC Lausanne
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Compaq
Université de Lausanne
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Distribution channels
End users
Market
Large
organization
Medium
Business
Individual
Prof
Small
Business
Home User
Change in
the market
preference
Procurement strategy
Needs
Preferences
Buying behaviour
Channels
Corporate
Resellers
Distribution strategy
H
Organization focus
Network
Vendors
Value Added
Traditionnal
Resellers
Dealers
Selection
criteria
Training
Software
Vendors
Products
Retail
Programs
PC's
Vendors
TIME
© 2002 Pigneur, HEC Lausanne
Alternate
Periph.
Vendors
Historical situation
Actual situation
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Feel & Serve : Dis-intermediation (who owns the customer?)
[Benjamin, 1995]
Cost
Customer
relationship
% profit
(shirt)
Producer
Distributor
Retailer
Customer
$52.72
0%
Producer
Distributor
Retailer
Customer
$41.34
28%
Producer
Distributor
Retailer
Customer
$20.45
62%
Producer
Distributor
Retailer
Added value
$20.45
$11.36
$20.91
Price
$20.45
$31.81
$52.72
© 2002 Pigneur, HEC Lausanne
Customer
$52.72
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Functions of intermediaries
Customer
relationship
Facilitate
• Matching between an offer and a demand
• the research of products (& their sellers)
• the aggregation of products (& of sellers)
• the aggregation of customers (& and their needs)
– buying clubs, customer associations, group buying
•
•
•
•
•
•
•
•
the protection of the private sphere and the management customer profiles
putting sellers under pressure
evaluation of needs and the suggestion of the adequate product
the management of risk (insurance)
the distribution of the articles
the diffusion of information on products
influence on the buying act (Marketing)
the transmission of information about the customer
Intermediaries improve the efficiency of the exchange between producers and
consumers, by aggregating transactions and creating economies of scale or scope
© 2002 Pigneur, HEC Lausanne
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Feel & Serve : Distribution channels
[Klein, 2001]
Customer
relationship
Otopenia …
Airline
Reservation S.
Travel Agency
80% by Internet!
© 2002 Pigneur, HEC Lausanne
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Scenarios for intermediation
[Sakar, 1995]
Customer
relationship
Intermediary
tcIC
tcPI
Supplier
tcPC
Consumer
Pre-internet
Post-internet
tc’PC < tc’PI + tc’IC
tc’PC > tc’PI + tc’IC
tcPC < tcPI + tcIC
tcPC > tcPI + tcIC
I. Direct market
reinforced by Internet
II. Threatened
intermediary
ultra-intermediation
dis-intermediation
III. Cyber-mediairy
IV. Intermediary
reinforce by the Internet
extra-intermediation
re-intermediation
The intermediaries augmentthe efficiency of the exchanges between suppliers and consumers,
When they aggregate transactions for creating scale or scope economies
© 2002 Pigneur, HEC Lausanne
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Feel & Serve : Intermediaries
Customer
relationship
[Sakar, 1995]
Pre-internet
More expensive with intermediary
More expensive
with intermediary
I. Direct market reinforced by
the Internet
ultra-intermediation
Post-internet
Cheaper with
intermediary
III. Cyber-mediary
extra-intermediation
Cheaper with intermediary
II. Threatened intermediary
dis-intermediation
IV. Intermediary reinforce by
the Internet
re-intermediation
Expedia …
© 2002 Pigneur, HEC Lausanne
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Moves of threatened intermediaries
Customer
relationship
[Scott, 2000]
Pre-internet
tcPC < tcPI + tcIC
tc’PC < tc’PI + tc’IC
I. Direct market reinforced by
the Internet
> SCOTT
tcPC > tcPI + tcIC
II. Threatened intermediary
> SCOTT
Integration capabilities
(direct access)
Post-internet
tc’PC > tc’PI + tc’IC
© 2002 Pigneur, HEC Lausanne
III. Cyber-mediary
IV. Intermediary reinforce by
the Internet
> SCOTT
> SCOTT
Perpetual innovation capabilities
(new entrants, spin-off)
Collaborative SCM capabilities
(virtual enterprise)
e-business 48
Université de Lausanne
WEB | AGENDA | FIN
Distribution channel conflict
[Afuah, 2001]
Customer
relationship
For established companies (incumbents, bricks-and-mortars)
• Risk of cannibalization
• Difficulty to reconcile to ways of selling
– on the sales force level
– Compaq and its resellers and the advent of direct sales
• Former competencies, advantage or disadvantage?
versus
– unusable or contra-productive, in case of radical innovation
– Capitalization possible, if innovation incremental
•
QUESTION: start doing e-commerce:
– Integrated entity?
– Separated company?
© 2002 Pigneur, HEC Lausanne
e-business 49
Université de Lausanne
WEB | AGENDA | FIN
Information
Customer
relationship
• Data Warehousing
– gather information
• Data Mining
– find relations between information
• Business Intelligence
– learn from information
– OLAP
• Personalization
– use information for customer relationship
– recommending systems
– personnel customer memory
© 2002 Pigneur, HEC Lausanne
Online Analytical Processing
(OLAP)
e-business 50
Université de Lausanne
WEB | AGENDA | FIN
Personalization
Customer
relationship
Listen to the customer
CRM
Establish the2configuration
Distribution
5
Planing of3production
Production
4a(internal)
ERP
Outsourcing
4b(external)
SCM
© 2002 Pigneur, HEC Lausanne
e-business 51
Université de Lausanne
WEB | AGENDA | FIN
Mass customization
Customer
relationship
[Piller, 2000]
Change of product
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
dynamic
Mass
customization
Invention
Mass production
Continuous
amelioration
stable
stable
dynamic
Change of processes
© 2002 Pigneur, HEC Lausanne
e-business 52
Université de Lausanne
WEB | AGENDA | FIN
One-to-one marketing
Customer
relationship
[Peppers, 1993]
•
•
•
•
perceive every customer as an individual
win his confidence and loyalty (and keep it for a long time)
by satisfying his needs in a personalized way
on the basis of information you have on the customer
– without abusing
in the line of direct marketing and
database marketing
Attract
retain
Conduct
transaction
start
dialogue
Motivate
action
© 2002 Pigneur, HEC Lausanne
e-business 53
Université de Lausanne
WEB | AGENDA | FIN
Personalization strategies in e-business
Customer
relationship
[Piller, 2000]
high
Configuration
Innovation
Housing
Fitness
Cosmetics
Computer
www.efit.com
www.reflect.com
www.dell.com
Press
Jewelry
www.individual.com
www.expressions.com
Watches
www.idtown.com
Print
www.iprint.com
Flowers
1.800-flowers.com
Video
Ski
www.kideo.com
www.myski.com
Add-on
low
Degree of customer integration required
www.streif.de
Attention
low
high
Degree of digitalization of customized components
© 2002 Pigneur, HEC Lausanne
e-business 54
Université de Lausanne
WEB | AGENDA | FIN
Taxonomy for recommending techniques
Customer
relationship
[Schafer, 1999]
1.
2.
3.
4.
Non-Personalized
Attribute-Based
Item-to-Item
People-to-People
People-to-People
Amazon Delivers
Book Matcher
persistent
persistency
(many sessions)
Non-Personalized
Customer comments
Item-to-Item
Ephemeral
Customer who Bought
(one session)
manual
automatized
Automatization (intervention of customer)
© 2002 Pigneur, HEC Lausanne
e-business 55
Université de Lausanne
WEB | AGENDA | FIN
Information : Recommending system – rule based
•
•
•
•
Conversion
prospect  client
Suggest a personalized content
maintain a privileged relation with the customer
preserve a track of each visit and a customer profile
manage an individualized interaction
–
promotion, action, catalogue, historic, ...
– from business rules (if … then)
– and from the client's profile
–
without interfering (too much) with his private life
© 2002 Pigneur, HEC Lausanne
e-business 56
Université de Lausanne
WEB | AGENDA | FIN
Information : Recommending system - Collaborative filtering
Customer
relationship
• anticipate customers needs
– recommend products
• from his preferences
– as if we knew him for a long time
• and from preferences of other clients with similar tastes
– word of mouth & correlation
– learn by experience
– agents (intelligent)
•
(if you liked this, then you should also like this …)
big mass of information
rating
Isabelle
Thomas
Mathieu
Catherine
Benoît
Fabian
book 1
1
5
5
2
1
book 2
1
2
2
2
3
1
book 3
5
1
book 4
?
4
3
3
5
3
4
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
© 2002 Pigneur, HEC Lausanne
e-business 57
Université de Lausanne
WEB | AGENDA | FIN
Trust & Loyalty
Customer
relationship
TRUST
Contribute to the
establishment of
SECURITY
Certification
Verification et authorization
Escrow
Fear: financial losses
QUALITY
Notary, payments
Expertise
Guarantee of quality
PRIVACY
Rating
Fear: loss of intimacy
Reputation of actors
Insurance
Contribute
Risk management
INFO- MEDIARY
COMMUNITY
BRAND
Notoriety …
© 2002 Pigneur, HEC Lausanne
e-business 58
Université de Lausanne
WEB | AGENDA | FIN
Trust & Loyalty : Community
Customer
relationship
[Hagel, 1997]
Group of people or entities
– that share values or interests
– and use the le Net regularly &
at the same place
transaction
interest
fantasy
relation
© 2002 Pigneur, HEC Lausanne
Business, trading,
occasions, barter …
Idea sharing,
communication …
Role games,
fantasy world…
Assistance (disease),
sharing of experiences …
One-to-One
Put pressure on
sellers
One-to-Tribe
Meeting of
sellers/buyers
Buy
Market
Union
mix
(mass)
(informed)
Barter
Sale
New age
target
(unselfish, elitist)
(spendthrift)
Target customers
e-business 59
Université de Lausanne
WEB | AGENDA | FIN
Types of communities
Customer
relationship
[Schubert, 1999]
Community
virtual
goal
Community
interest
Community
leasure
Social interest
Community
relationhip
SkiRando
Community
fantasy
Ultima Online
Community
research
Community
business
Commercial interest
ISworld
Community
commerce
TPN Register
Community
transaction
Ricardo
Community
merchant
EMB
media
Community
network
© 2002 Pigneur, HEC Lausanne
Community
internet
e-business 60
Université de Lausanne
WEB | AGENDA | FIN
Community and marketing
Customer
relationship
one-to-tribe marketing
• target a group statistically homogenous
• so that the member of the community feels the company
• and can discuss with his congeners
• to avoid the isolation feeling due to personalization
• from profiles (mimetic)
– in considering the eventual
demultiplication of personalities
•
model of the television (themes) ?
•
– we watch programs
– we assist events
– we comment them in groups
– in real time …
major stake for media groups
© 2002 Pigneur, HEC Lausanne
One-to-One
One-to-Tribe
e-business 61
Université de Lausanne
WEB | AGENDA | FIN
Battle for information & privacy
Customer
relationship
• Datawarehouse and data mining
– to study client behavior and anticipate his needs
• The client grumbles when the vendor exaggerates (or doesn't explain)
• But the client gives information if he is « rewarded » (miles, …)
– loyalty program (M-CUMULUS, Qualifyer, …)
• This information belongs to the client
– Cookies & web, Intuit, SmartCard (CASH)…
• allows tracking the client's behavior on DIFFERENT sites
• unlike loyalty cards (specific to a shop)
– he can reinforce it
– sell it or authorize - or not - access to vendors
– leave it to an intermediary for a good use ...
PASSEPORT (OPS)
© 2002 Pigneur, HEC Lausanne
e-business 62
Université de Lausanne
WEB | AGENDA | FIN
Trust & Loyalty : Infomediary
Customer
relationship
[Hagel, 2000]
•
•
•
•
•
Receives, merges and manages the buyers information
protects the buyer
supplies information to vendors
puts the vendors under pressure
obtains advantages for the buyer on the behalf of the vendors
– for the information given to the vendors
•
•
prefigured by Portals, buying clubs, associations of consumers …
requires skills and rare technologies
•
Who can become info-mediary?
–
–
–
–
–
Fiduciaries
Merchants
buying clubs & consumer associations
databases
media, portals, …
© 2002 Pigneur, HEC Lausanne
brand
emotion
traffic
e-business 63
Université de Lausanne
WEB | AGENDA | FIN
Infrastructure Management
Infrastructure
management
[Ben Lagha, Osterwalder, Pigneur, 2001]
CUSTOMER
RELATIONSHIP
resources for
INFRASTRUCTURE
MANAGEMENT
Information
Target Customer
Resources/assets
Feel & serve
Value proposition
Activities/processes
Trust & loyalty
Capabilities
Partner network

Revenue
price
© 2002 Pigneur, HEC Lausanne
PRODUCT
INNOVATION
value for
Value added
+
Costs
profit
e-business 64
Université de Lausanne
WEB | AGENDA | FIN
Value chain & activities
Infrastructure
management
Support activities
infrastructure
Human
resources
Technology
development
Procurement
e-procurement
inbound
logistics
production
e-SCM
outbound
logistics
marketing &
sale
After-sale
Main activities
Value
e-alliance
© 2002 Pigneur, HEC Lausanne
e-business 65
Université de Lausanne
WEB | AGENDA | FIN
Activity Configuration : Value Chain
[Porter, 1985]
© 2002 Pigneur, HEC Lausanne
Infrastructure
management
e-business 66
Université de Lausanne
WEB | AGENDA | FIN
Activity Configuration : Value Configuration
Infrastructure
management
[Revaz, 1995] [Wallin, 2000]
Tôles laminées
Metalu
Alliages reçus
Informations alliages
Alusun
Presser
(13)
Tôles pressées
Laminer
(1)
Tôles laminées
Découper
(14)
Tôles pressées
Rechercher
alliages (5)
Nouvel alliage
Tôles découpées
Presser
(2)
Tôles pressées
Eléments soudés
Commandes
Capots moteurs
Suivre les contrats (6)
Stocker (15)
Découper
(3)
Toits
Souder (9)
Eléments soudés
Livrer (10)
E1
Stocker (4)
Emettre des
propositions
Panneaux alu
Eléments soudés
Capots moteurs
Toits
Aerotech
Cartel
E2
Informations
Concevoir
(16)
Conclure des
contrats
Montants
encaissés
Livrer (7)
Rechercher
composants
(17)
Plans
Propositions
émises
Contrats
Panneaux alu
Capots moteurs
Commandes
Assembler
(8)
Toits
Composants
Informations
Composants
Tableaux de bord
Landcar
Gérer les stocks (11)
Tableaux de bord
SkyStar
© 2002 Pigneur, HEC Lausanne
Tableaux de bord
Livrer (12)
e-business 67
Université de Lausanne
WEB | AGENDA | FIN
Case study: ColorMailer
[Ben Lagha, Osterwalder, Pigneur, 2001]
Infrastructure
management
ColorMailer...
• ...is a brand of Colorplaza Ltd., an independent
company based in Vevey/Switzerland, active in the
field of digital imaging and in the development of
multimedia Internet applications.
• ...offers products and services in the domain of
digital imaging for private customers.
• …bets on the increasing number of owners of
digital cameras and scanners (~ 30 million
people).
Http://www.colormailer.com
© 2002 Pigneur, HEC Lausanne
e-business 68
Université de Lausanne
WEB | AGENDA | FIN
Coordination (& integration)
Infrastructure
management
[Kalakota, 2001]
Prevision
Planing of
stock
Planing of
capacity
Order planning
Order
confirmation
Replenishment
• flexibilityy
•integration
MRP
choice supplier
Process
Order
processing
Process
Planing of
realization
Availability stock
Scheduling
Process
Stock allocation
order of priorities
• profitable?
• available in the inventory?
• can be manufactured?
Scheduling
manufacturing
Scheduling
distribution
• BPR (business process reengineering)
•INTEGRATION WITH ERP & SCM
© 2002 Pigneur, HEC Lausanne
Production & assemblage
destocking
loading
Planing
delivery
Customer
service
Process
Distribution
• integration with shipping companies
• tracking by the customers
• return of goods
e-business 69
Université de Lausanne
WEB | AGENDA | FIN
Case study: Infrastructure management element at ColorMailer
[Ben Lagha, Osterwalder, Pigneur, 2001]
Infrastructure
management
ColorMailer
Website
Printing
infrastructure
RESOURCES/ASSETS
in-house
Resources
for
ACTIVITY CONFIGURATION
Need
for
Packing
staff
Need
for
upload
images
Print of
images
Delivery
of items
Marketing
of product
services
Resources
for
PARTNER NETWORK
out-house
© 2002 Pigneur, HEC Lausanne
e-business 70
Université de Lausanne
WEB | AGENDA | FIN
Partner Network : Alliances and partnerships
Infrastructure
management
Bank
payment
clearance
order
Distributor
inventory
deliver
Credit card
Amazon.com
Shipping
sales
Information systems
coordination
contents
sale
deliver
order
sales
Affiliate
critics
sales
transport
tracking
Customer
buy
content
Author
marketing
© 2002 Pigneur, HEC Lausanne
e-business 71
Université de Lausanne
WEB | AGENDA | FIN
Electronic Data Interchange
from
EDI
to
ECR
Efficient customer Response
Company A
Company B
selection, comparaison, ...
BUY
order or statistics
Order
Reception
Delivery
invoice
Payment
paiement
Bank A
© 2002 Pigneur, HEC Lausanne
SALE
Before sale
Supply
sale
Delivery
Invoicing
production & distribution
After-sale
confirmation
Clearing
Bank A
e-business 72
Université de Lausanne
WEB | AGENDA | FIN
Partner Network : e-SCM, e-procurement and e-market
Infrastructure
management
Power of buyers 
buyers
suppliers
procurement
Electronic
market
Market Vs. relation
Reduced transaction costs
Improved information access
group buying …
Reduced selling costs
bigger market access
Dis-intermediation …
supply chain
Customers’
needs
Integrated
channels
Products/
services
Flexible
processes
Outsources/
In-house
competencies
Power of suppliers 
© 2002 Pigneur, HEC Lausanne
e-business 73
Université de Lausanne
WEB | AGENDA | FIN
Partner Network : Strategic network
Infrastructure
management
[Malone, 1993]
high
Production cost
Co-production
partnership
BUY
Externalization
NETWORK
MARKET
Virtualization
Holding
Coordination cost
low
low
MAKE
HIERARCHY
high
Supply chain
© 2002 Pigneur, HEC Lausanne
e-business 74
Université de Lausanne
WEB | AGENDA | FIN
Infrastructure and logistics
Infrastructure
management
Buyer
Consume
Query
information
influence
Negotiate
BUY
goods
Find
customer
Negotiate
payment
Promote
product
Find
source
information
information
Identify
product
SELL
Serve
Answer
payment
logistics
seller
catalog
Computerized system
© 2002 Pigneur, HEC Lausanne
order
After-sale
e-business 75
Université de Lausanne
WEB | AGENDA | FIN
Logistics: the hidden face of e-commerce
[Kalakota, 1999]
•
Infrastructure
management
Shop
– department and/or stock (eventually separated)
•
Franchise or partnership
– fragmented sector: multitude of small shops
•
Multi-channel distribution center existing
– mail order business with a certain volume
•
Ad hoc distribution centers
– mail order business with a high volume
and also
• Virtual warehouse (partnership with third party)
– outsourcing
– use of distribution centers FedEx, for ex.
•
transportatio
n
Direct sending by manufacturer
– outsourcing
– integration of information systems
© 2002 Pigneur, HEC Lausanne
warehousing
e-business 76
Université de Lausanne
WEB | AGENDA | FIN
Order fulfillment (warehousing)
Infrastructure
management
[Kalakota, 1999]
outsourced
Third-Party
Fulfillment
Center
Manufacturer
Direct
Shipment
Partner
Fulfillment
Opération
Operation
Build-to-order
self-operated
Dedicated
Fulfillment
Center
centralized
In-store
Distributed
Delivery
Centers
distributed
Structure
© 2002 Pigneur, HEC Lausanne
e-business 77
Université de Lausanne
WEB | AGENDA | FIN
outsourced
Third-Party
Fulfillment
Center
Partner
Fulfillment
Opération
Dedicated
Fulfillment
Center
Distributed
Delivery
Centers
centralized
Volumes
Investment
Flexibility
© 2002 Pigneur, HEC Lausanne
Infrastructure
management
in house
Operation
Changing the warehousing approach
distributed
Structure
e-business 78
Université de Lausanne
WEB | AGENDA | FIN
Standards - XML
Infrastructure
management
[Haifei Li, 2000]
• Collection of business components (product, supplier, order, …)
• and standard processes (fulfillment, invoicing, delieving …)
• XML tags for inter-application exchanges
– EAI, B2B, …
– EDI legacy (ISO codes, X12 components)
• bizTalk
– By Microsoft
– Simple Object Access Protocol (SOAP)
• Common Business Library (CBL)
Scénario ABC
– By CommerceOne
• Commerce XML (cXML)
– By Ariba
•
and also Bolero, IOTP, OAGIS, OCF …
© 2002 Pigneur, HEC Lausanne
e-business 79
Université de Lausanne
WEB | AGENDA | FIN
Standards - ebXML
Infrastructure
management
Initiative OASIS & UN-CEFAC (Edifact)
UML
Trading
TPA Partner
Arrangement
© 2002 Pigneur, HEC Lausanne
e-business 80
Université de Lausanne
WEB | AGENDA | FIN
Financial Aspects
Financial
Aspects
[Ben Lagha, Osterwalder, Pigneur, 2001]
CUSTOMER
RELATIONSHIP
resources for
INFRASTRUCTURE
MANAGEMENT
Information
Target Customer
Resources/assets
Feel & serve
Value proposition
Activities/processes
Trust & loyalty
Capabilities
Partner network

Revenue
price
© 2002 Pigneur, HEC Lausanne
PRODUCT
INNOVATION
value for
Value added
+
Costs
profit
e-business 81
Université de Lausanne
WEB | AGENDA | FIN
Value creation and revenues - a simple equation
Financial
Aspects
«The creation of an economic value stays the measure of success»
• PROFIT
 = (P – VC).Q – FC
FINANCIAL
ASPECTS
REVENUE MODEL
to increase
P
the unit price of a product
VC the variable cost of a unit
Q
the number of products sold
PROFIT / LOSS
diminishes
COST MODEL
FC fixed costs
© 2002 Pigneur, HEC Lausanne
e-business 82
Université de Lausanne
WEB | AGENDA | FIN
Income models
combination
Phone
• registry
REVENUE
one time
• subscription
• Usage
sale
• Time
• Services
registry
recurrent
subscription
Income of the subscription fees to become a member
Paid by the buyer and/or the vendor
advertisement
Income of the ad banners posted on the shopfront
Paid by the vendor
use
transaction
Income of online sales paid by the buyer
commission
Income, percentage of a transaction made by the settlement
(affiliate program)
© 2002 Pigneur, HEC Lausanne
e-business 83
Université de Lausanne
WEB | AGENDA | FIN
Revenue Models
• Selling
– selling a good : flowers
(i.e. www.fleurop.ch)
– selling a service : brokerage
(i.e. www.consors.ch)
© 2002 Pigneur, HEC Lausanne
Financial
Aspects
• Revenue Sharing
– affiliation programs
(i.e.Amazon.com)
– commission
(i.e.ColorMailer.com & partners)
e-business 84
Université de Lausanne
WEB | AGENDA | FIN
Revenue Models (…continued…)
Financial
Aspects
• Providing/Leasing
– Application Service Providers (ASP)
(i.e. JD Edward Enterprise Resource Planning (ERP))
• Advertising/Sponsoring
– www.romandie.com / www.yahoo.com
www.jdedwards.com
© 2002 Pigneur, HEC Lausanne
e-business 85
Université de Lausanne
WEB | AGENDA | FIN
Revenue Models (...continued)
Financial
Aspects
• Transaction Cut
– auctions (i.e. eBay.com)
– brokerage
(i.e. SWX Swiss Exchange www.swx.ch)
• Licensing
– intellectual capital (Rambus)
– Software (i.e. Oracle, Microsoft, …)
• Franchising
– Benetton, McDonalds
© 2002 Pigneur, HEC Lausanne
e-business 86
Université de Lausanne
WEB | AGENDA | FIN
Pricing Models
Financial
Aspects
• Free
– subsidized through other
revenues (i.e. advertising)
• Fixed Pricing
–
–
–
–
menu pricing (ev. with discount)
subscription
pay per use
below cost (...subsidized)
Free: le Monde
• One-to-one bargaining
Subscription: WS Journal
– negotiation
• Auction
– reverse auction
– dutch auction
– ...
Dutch Flower Auction
© 2002 Pigneur, HEC Lausanne
e-business 87
Université de Lausanne
WEB | AGENDA | FIN
Pricing Models (…continued)
Financial
Aspects
• Real-time Market Driven
– offer/demand (i.e. stock markets)
• Lowest price
– (i.e. through agents,
through proof)
• Barter
– no money flow
• Product Mix dependant
colruyt.be
– bundling (i.e. computers,
mobile phones, hotels)
barterdirectory.com.au
© 2002 Pigneur, HEC Lausanne
e-business 88
Université de Lausanne
WEB | AGENDA | FIN
Transforming the pricing
[Klein, 2000]
• Based on
–
–
–
–
•
catalog
negotiation between the seller and the buyer
auction
request for proposal (RFP)
« good bye to fixed pricing »?
– Suppliers enjoy price differenciation in order to avoid comparison
– Customers enjoy low price and gaming using comparison
Yield Management
• Allows to calculate in real time (online if on the Internet)
• the best prices
• for maximazing the profit generated by the sales
• based on a forecasting model of sale behavior
(for micro-segments)
© 2002 Pigneur, HEC Lausanne
Yield Management
e-business 89
Université de Lausanne
WEB | AGENDA | FIN
Trends towards dynamic and online pricing
[Klein, 2000]
Financial
Aspects
• Based on
–
–
–
–
•
catalog
negotiation between the seller and the buyer
auction
request for proposal (RFP)
« good bye to fixed pricing »?
– Suppliers enjoy price differenciation in order to avoid comparison
– Customers enjoy low price and gaming using comparison
Yield Management
• Allows to calculate in real time (online if on the Internet)
• the best prices
• for maximazing the profit generated by the sales
• based on a forecasting model of sale behavior
(for micro-segments)
© 2002 Pigneur, HEC Lausanne
e-business 90
Université de Lausanne
WEB | AGENDA | FIN
Yield Management - conditions
• Perishable product
– No value after a given date (seat onboard, room, …)
• Variable demand and rigid production capacity
– Demand changes (high, low, …)
– Offer is fixed
• Reservation
– Before the use of the service
• Price differenciation
– Elasticity (demand/price) is variable according to the segment
– Attract customer with high sensity to price with low prices (apex)
– Keep demanding people with price barriers (1st class)
• High fixed cost & low variable cost
• Price leverage
– Small increase of revenu causes significative increase of profit
© 2002 Pigneur, HEC Lausanne
e-business 91
Université de Lausanne
WEB | AGENDA | FIN
Intangible assets measuring models
[Sveiby, 2001]
MEASURE
http://www.sveiby.com.au/intangibleMethods.htm
© 2002 Pigneur, HEC Lausanne
e-business 92
Université de Lausanne
WEB | AGENDA | FIN
Intangible Assets Monitor, Balanced Scorecard and Intellectual Capital
IAM
Value
Individual
profit generator
[Sveiby, 2001]
Tangibles assets
Intangible assets
External structure
BSC
[Nolan, 1995]
Individual competencies
Growth/Renewing
Growth/Renewing
Growth/Renewing
Efficiency
Efficiency
Efficiency
Stability
Stability
Stability
Clients
Supplier
partner
Internal structure
Knowledge perspective
Processes
Customer
management
Systems
Patents
knowledge
Training/Learning
Logistics
management
Aptitudes
Experience
formation
Product
innovation
Structural capital
IC
[Edvinsson, 1997]
Customer capital
© 2002 Pigneur, HEC Lausanne
Organizational capital
Human capital
e-business 93
Université de Lausanne
WEB | AGENDA | FIN
Intangible assets in Celemi
© 2002 Pigneur, HEC Lausanne
e-business 94
Université de Lausanne
WEB | AGENDA | FIN
Intellectual capital in Skandia
[Edvinsson, 1997]
© 2002 Pigneur, HEC Lausanne
e-business 95
Université de Lausanne
WEB | AGENDA | FIN
Balanced scorecard
How do the customers perceive
us?
CUSTOMER RELATION
Goals
Measures
In which process do we have to
prove excellence?
& initiatives
Customer
management
INFRASTRUCTURE
Goals
Measures
& initiatives
Product
innovation
PRODUCT INNOVATION
Goals
Measures
& initiatives
Logistics
management
Financial
Aspects
FINANCE
Goals
Measures
& initiatives
How to improve our services and
our quality?
© 2002 Pigneur, HEC Lausanne
How do shareholder perceive
us?
e-business 96
Université de Lausanne
WEB | AGENDA | FIN
BALANCED SCORECARD software
From cause to effect
© 2002 Pigneur, HEC Lausanne
e-business 97
Université de Lausanne
WEB | AGENDA | FIN
BALANCED SCORECARD for IS
[Bader, 2000]
Learning and Innovation
Internal Processes
Customer Perspective
Value Contribution
Objectives
Increase of
end-user
productivity
A statement of
what is critical to
the success of
the vision
© 2002 Pigneur, HEC Lausanne
Value Drivers
Train end-users
efficiently and
quickly
Capability or
activity needed
to develop,
improve or
secure in order
to reach
strategic
objectives
Key Performance
Indicators (KPI’s)
% hidden /
unproductivity
costs
How success in
achieving the
objectives will
be measured
and tracked
Targets
(Baseline/Year n)
56 % by
Acadys
Reduction by
5 %p.a.
The level of
performance or
rate of
improvement
needed
Initiatives
• Implement and
conduct AcadysSurvey
• Set up education
program
• Set standards
Do Wells
required to
achieve objectives
Accountability
IT Staff
Mr. xyz
What group or
person is
responsible for the
measure
e-business 98
Université de Lausanne
WEB | AGENDA | FIN
BALANCED SCORECARD for IS
[Bader, 2000]
Objectives
Value Drivers
V3.1 Ensure reliable environment
(availability, performance, security)
at SLAs
V3
Increase
End-user
Productivity
© 2002 Pigneur, HEC Lausanne
 SLA fulfillment rate (e.g. # interventions / # users (for the period))
V3.2 Provide quick and effective
problems/requests solving
 SLA fulfillment rate
 % problems/requests solved within 1 h, 1h to 6h, 1 day, more
V3.3 Speed up upgrade of infrastructure
products and services and equipment/
connection of new users or partners
 Average lead and execution time for global desktop upgrade
 # Non-standard desktops / # standard desktops
V3.6 Develop prospective capacity planning
 Budget forecasts based on capacity planning (HW forecast,
V3.7 Assess new technologies to increase
end-user productivity
 # New technologies (e.g PC, OS...) assessed within the period
V4
Provide
Cost-Efficient
Services at Quality
Key Performance Indicators (KPIs)
V4.10 Align ’IT factory’ costs on best in
class providers
/
total help-desk problems/requests
engineering and migration resources...)
 Fixed and variable costs / # desktops
 TCO for user survey vs benchmark (ACADYS): actuals vs
benchmarks (visible and user hidden costs)
 Costs for migration (e.g. Common Office Envirt Engineering...)
 # business applications / functionality (e.g. Visio, flowchart...)
e-business 99
Université de Lausanne
WEB | AGENDA | FIN
BALANCED SCORECARD for IS
[Bader, 2000]
MONTH
JUNE
TABLE
V3 - Increase End-User Productivity
3
Bi-Yearly End-Users Survey: Application and Service Quality
C: Current survey
END-USER ASSESSMENT (0 to 5)
Seg.1
Seg.2
C P
C
P
Seg.3
Seg.4
C P
Seg.5
C P
C P
Quality of training 4.2 4.0
4.5 4.1
3.9 4.0
4.2 4.0
3.5 4.0
Application User-Friendly 3.0 3.0
4.0 4.0
3.5 3.8
3.0 3.0
3.0 3.0
System Response Time 2.1 3.0
2.8 2.9
3.1 3.7
3.1 3.5
1.5 2.0
System Availability 4.0 4.0
4.0 4.0
4.0 4.0
4.0 4.0
3.0 3.0
User Satisfaction (Support) 3.5 4.2
3.5 4.2
3.5 4.2
3.5 4.2
3.5 4.2
Problem Solving 4.5 4.9
3.5 3.9
4.0 3.9
2.5 2.9
3.5 3.9
Help-Desk Accessibility 4.8 4.5
4.8 4.5
4.8 4.5
4.8 4.5
4.8 4.5
Help-Desk Contact Quality 4.9 3.9
4.9 3.9
4.9 3.9
4.9 3.9
2.9 3.0
Average 3.9 3.9
4.0 3.9
4.0 4.0
3.8 3.8
3.2 3.4
650
750
700
15 15
90 90
# of users
% of pulled users
800
10 10
1.100
8
8
15 15
P: Previous survey
TARGET IS 3.5
OR OVER
Contributor: POYC
Comments:
Identify and fix issues on segment 5:
response time
© 2002 Pigneur, HEC Lausanne
e-business 100
Université de Lausanne
WEB | AGENDA | FIN
BALANCED SCORECARD for
CIOs
[van Granbergen, 1997]
Corporate Contribution
• Control IT Expenses
–
percentage above or within budget
–
allocation of the different budget items
–
IT budget as a percentage of turnover
–
IT expenses per staff member
• Sell to third parties
–
financial benefits steeming form selling products and
services
Customer = User
• Research
–
–
–
IT supplier
% of applications managed by IT
% of applications delivered by IT
% of in-house applications
• Partnership with users
–
index of user involvement in generating new strategic
applications
–
index of user involvement in developing new
application
–
frequency of IT Steering Committee meetings
• User satisfaction
–
index of user friendliness of applications
–
index of user satisfaction
–
index of availability of applications and systems
–
index of functionality of applications
–
% of application development and operations within
the Service Level Agreement (SLA)
• Business value of new IT projects
–
Financial evaluation based on ROI, NPV, IRR, PB
–
Business evaluation based on Information Economics
• Business value of the IT function
–
percentage of the development capacity engaged in
strategic projects
–
relationship between new developments /
infrastructures investments / replacement investments
Vision and strategy
Learning and Growth
• Permanent Education of staff
–
number of educational days per person
–
education budget as % of total IT budget
• Expertise of the IT staff
–
Number of years of IT experience per staff member
–
age pyramid of the IT staff
• Age of the type Applications portfolio
–
Number of applications per age category
–
Number of implications younger than 5 years
Internal Processes
• Efficiency Software Development
–
% of changes and adjustments made throughout
different development stages
–
number of defects per function point in the first year of
production
–
number of function points per person per month
–
average number of delays late in delivering software
–
average unexpected budget increase
–
% of projects performed within SLA
–
% of code that is reused
–
% of maintenance activities
–
visible and invisible backlog
• Efficiency
–
–
–
–
–
–
–
operations
% unavailability of the mainframe
% unavailability of the network
response times per category of users
% of jobs done within set times
% of reruns
average time between system failures
ratio operational costs/installed MIPS
• Acquisition PCs and PC software
–
average lead time for deliveries
• Problem management
–
average answer time of help desk
–
% of question answered within set time
–
% of solutions within SLA
• User Education
–
% of users that already perceived education (per
technology / applications)
–
quality index of education
• Managing IT staff
–
number of people hours that can be charged internally
or externally
–
% of people hours that are charged on projects
–
satisfaction index of IT staff
• Use of communication software
–
% of IT staff that can access groupware facilities (interand intranet)
–
% of IT staff that effectively use groupware-facilities
• Research and emerging technologies
–
% of budget spent on IT research
© 2002 Pigneur, HEC Lausanne
e-business 101
Université de Lausanne
WEB | AGENDA | FIN
Metrics for e-business
[Corporate Executive Board, 1999]
FINANCE
PROCESSUS
CLIENT
CLIENT
CLIENT
PROCESSUS
PRODUIT
PRODUIT
PROCESSUS
© 2002 Pigneur, HEC Lausanne
e-business 102
Université de Lausanne
WEB | AGENDA | FIN
Metrics for e-business
[Corporate Executive Board, 1999]
(SALES EFFICIENCY AND TRANSACTIONAL EXCELLENCE)
© 2002 Pigneur, HEC Lausanne
e-business 103
Université de Lausanne
WEB | AGENDA | FIN
E-Performance
[Agrawal, 2000]
ATTRACTION
CONVERSION
RETENTION
• Visitor base
• Visitor acquisition cost
• Visitor advertising revenue
• customer base
• customer acquisition cost
• customer conversion rate
• nb transactions / customer
• revenue / transaction
• revenue / customer
• customer gross income
• customer maintenance cost
• customer operating cost
• customer churn rate
•…
• repeat-customer base
• r-customer acquisition cost
• r-customer conversion rate
• nb transactions / r-customer
• revenue / transaction
• revenue / r-customer
• r-customer gross income
• r-customer maintenance cost
• r-customer operating cost
• r-customer churn rate
•…
© 2002 Pigneur, HEC Lausanne
e-business 104
Université de Lausanne
WEB | AGENDA | FIN
Management Cokpit
http://www.management-cockpit.com/
© 2002 Pigneur, HEC Lausanne
e-business 105
Université de Lausanne
WEB | AGENDA | FIN
Scenario planning
SIMULATE
[Courtney, 1997]
Levels of uncertainty:
1
A
B
2
3
?
C
D
Clear-enough future
Alternate futures
Range of futures
True ambiguity
forecast
Discrete options
No natural option
No basis for forecast
Traditional toolkit
Game theory
Decision analysis
Scenario
planning
analogies
Pattern recognition
simulation
© 2002 Pigneur, HEC Lausanne
e-business 106
Université de Lausanne
WEB | AGENDA | FIN
Strategic postures
[Courtney, 1997]
?
Shape the future
Adapt the future
Reserve the right to play
Defend & react
Play a leadership role
With through speed,
Agility and flexibility
Invest sufficiently to stay
In the game
Set barriers
Setting standards
Creating demand
Recognizing and capturing
Opportunities in existing
markets
Avoid premature
commitments
Defensive competition
© 2002 Pigneur, HEC Lausanne
e-business 107
Université de Lausanne
WEB | AGENDA | FIN
System dynamics
Model
• Based on (differential) equations
Decision
Support
system
learning
– Stocks and flows
– converters and connectors
Computer-aided
design
• manages feed-back loops explicitely
– positive (reinforcement)
– or negative (correction)
• allows simulating the behavior
– In a virtual world
Service
time
• in a learning perspective
order
delivery
rate
rate
inventory
+
Productivity
© 2002 Pigneur, HEC Lausanne
e-business 108
Université de Lausanne
WEB | AGENDA | FIN
System dynamics
Customerrelationship
Product
innovation
Infrastructures
logistics
Finance
revenue
© 2002 Pigneur, HEC Lausanne
e-business 109
Université de Lausanne
WEB | AGENDA | FIN
Simulation
© 2002 Pigneur, HEC Lausanne
e-business 110
Université de Lausanne
WEB | AGENDA | FIN
e-Business Models: HEC Lausanne Research Objectives
[Ben Lagha, Osterwalder, Pigneur, 2001]
E-Business Model
Language (eBML)
E-Business Model Handbook
- navigate in concepts (www)
- graphical representation
- illustrative examples
- ontology representation (xml)
- graphical representation
- knowledge sharing
E-Business Model Ontology
or Framework (eBMF)
- concepts/models (components)
- links between concepts/models
E-Business Model
Simulation
E-Business Model
Design Tool
- scenarios (system dynamics)
- learn about Business Models
- be prepared
- computer assisted design
- evaluation
- change management
E-Business Model
Games
- play, learn & understand
© 2002 Pigneur, HEC Lausanne
e-business 111
Université de Lausanne
WEB | AGENDA | FIN
Next …
[Pigneur, 2001]
e-business model handbook
BUSINESS
ONTOLOGY
OBSERVED
CASES
ENGINEERING
TOOL
FINANCE
LOGISTICS
CUSTOMER
DEFINE
CLASS
DESIGN
ASSESS
MEASURE
CRITIQUE
MODEL
FORECAST
SIMULATE
© 2002 Pigneur, HEC Lausanne
PRODUCT
• Business model
• (Un-) bundled corporation
• Breakthrough strategy
• Critical success factor
• Balanced scorecard
• Resource-based view
• System dynamics
• Dynamic resource system
• Scenario Planning
Case-based
reasoning
Framework for
E-BUSINESS
MODEL
HANDBOOK
Tool for
Critiquing
system
Simulation
environment
e-business 112
Université de Lausanne
WEB | AGENDA | FIN
XML ontology
© 2002 Pigneur, HEC Lausanne
e-business 113
Université de Lausanne
WEB | AGENDA | FIN
Value Proposition selon [Kambil, 1997] en Protégé-2000
Décomposition des dimensions de la valeur
• rôle du client
• coût
• performance
© 2002 Pigneur, HEC Lausanne
e-business 114
Université de Lausanne
WEB | AGENDA | FIN
Value Proposition selon [Kambil, 1997] en Protégé-2000
© 2002 Pigneur, HEC Lausanne
e-business 115
Université de Lausanne
WEB | AGENDA | FIN
Capacités selon [Wallin, 2000] en Protégé-2000
© 2002 Pigneur, HEC Lausanne
e-business 116