WP1
System requirement specification
(summary of revised WP 1 deliverables)
CONTRACT N° :
G1RD-CT-2002-00698
ACRONYM :
e-Volution II
TITLE :
Roadmap for e-business implementation in Extended Enterprises
PROJECT CO-ORDINATOR :
Otto-von-Guericke Universität Magdeburg
TECHNICAL CO-ORDINATOR : ALTEC S.A.
PARTNERS : Mobile Business and Innovative Solutions GmbH
Investitionsbank Hessen AG
F.A.Z.-Institut für Management-, Markt- und Medieninformation GmbH
Università degli Studio di Salerno
Cybion Srl
ALTEC S.A.
TEC Consultants S.A.
WINI Büromöbel Goerg Schmidt GmbH & Co. KG
Veyhl GmbH
Graphicolor Srl
Plastifoto Srl
Vision Srl
EMEC Srl
L’Altro Studio Srl
DOCUMENT ID.:
G1RD-CT-2002-00698_WP1
DOCUMENT STATUS:
revised, under review
CLASSIFICATION :
confidential
PROJECT START DATE : 01 May 2002
DURATION : 36 months
Date of issue of this report : May 2004
Project funded by the European Community
under the ‘Competitive and Sustainable
Growth’ Programme (1998-2002)
WP 1
System requirement specification
G1RD-CT-2002-00698
Table of content
1
Overview ................................................................................................................................... 6
2
Introduction .............................................................................................................................. 7
3
4
5
2.1
BACKGROUND AND PURPOSE ............................................................................................... 7
2.2
PROJECT ACRONYMS, ABBREVIATIONS AND DEFINITIONS ....................................................... 8
2.2.1
Project acronyms and abbreviations ............................................................................................... 8
2.2.2
Project definitions ............................................................................................................................ 8
Situation analysis of small and medium sized enterprises in Europe ............................... 10
3.1
SMES AND E-BUSINESS IN EUROPE .................................................................................... 10
3.2
SMES AND E-BUSINESS IN ITALY ........................................................................................ 16
3.3
SMES AND E-BUSINESS IN GERMANY ................................................................................. 21
3.4
SMES AND E-BUSINESS IN GREECE .................................................................................... 25
Extended Enterprise .............................................................................................................. 32
4.1
INTRODUCTION .................................................................................................................. 32
4.2
OVERVIEW OF EUROPEAN RTD PROJECTS ON EE ............................................................... 33
4.3
EE DEFINITIONS ................................................................................................................ 34
4.4
DESCRIPTION OF PROJECT EXTENDED ENTERPRISE TEST CASES ......................................... 36
Industrial requirements on methodology concept .............................................................. 42
5.1
5.1.1
Methodology purpose ................................................................................................................... 42
5.1.2
Customer and user specification .................................................................................................. 42
5.1.3
Context of the work ....................................................................................................................... 43
5.2
SYSTEMATISATION OF INDUSTRIAL REQUIREMENTS ON METHODOLOGY CONCEPT .................. 43
5.2.1
Identification phase ....................................................................................................................... 44
5.2.2
Conception phase ......................................................................................................................... 46
5.2.3
Interim summary and next steps ................................................................................................... 50
5.2.4
Requirement analysis phase......................................................................................................... 51
5.2.5
Design phase ................................................................................................................................ 53
5.2.6
Implementation phase ................................................................................................................... 54
5.3
6
METHODOLOGY CONCEPT DRIVERS .................................................................................... 42
FURTHER ISSUES .............................................................................................................. 55
5.3.1
Usability requirements .................................................................................................................. 55
5.3.2
Maintainability requirements ......................................................................................................... 55
5.3.3
Support requirements ................................................................................................................... 55
5.3.4
Cultural aspects ............................................................................................................................ 56
Industrial Software requirements.......................................................................................... 57
6.1
GENERAL IT-REQUIREMENTS OF SMES AND EES ................................................................ 57
6.2
SYSTEM AND SOFTWARE CONCEPT DRIVERS ....................................................................... 57
6.2.1
System and software purpose ...................................................................................................... 57
6.2.2
Customer and user specification .................................................................................................. 58
6.3
NON-FUNCTIONAL SOFTWARE REQUIREMENTS ON THE E-VOLUTION TOOL KIT ........................ 58
© The e-Volution II consortium
page 2/113
WP 1
7
Look and feel................................................................................................................................. 58
6.3.2
Usability......................................................................................................................................... 59
6.3.3
Operating platforms ...................................................................................................................... 60
6.3.4
Technical support, maintainability and portability ......................................................................... 63
6.3.5
Security and Extended collaboration ............................................................................................ 64
6.3.6
Web Security Precautions ............................................................................................................. 64
6.3.7
General Security Precautions ....................................................................................................... 65
6.3.8
Standardisation issues .................................................................................................................. 65
Market survey for expected e-volution products ................................................................. 69
OVERVIEW OF EUROPEAN ICT AND E-BUSINESS MARKET ENVIRONMENT ............................... 69
7.1.1
Products / Solutions ...................................................................................................................... 70
7.1.2
Technology integration .................................................................................................................. 70
7.1.3
Room for improvement ................................................................................................................. 71
7.1.4
Requirements and risks ................................................................................................................ 71
7.1.5
Investments in IT ........................................................................................................................... 73
7.1.6
Trends ........................................................................................................................................... 73
7.2
MARKET ASSESSMENT ....................................................................................................... 74
7.2.1
Target groups ................................................................................................................................ 75
7.2.2
Market and competition analysis for the e-volution methodology ................................................. 75
7.2.3
Market and competition analysis for the e-volution tool-kit ........................................................... 77
7.2.4
SWOT analysis ............................................................................................................................. 86
Socio-economic findings on Extended Enterprises ............................................................ 87
8.1
CULTURAL ASPECTS OF SME COLLABORATION IN EXTENDED ENTERPRISES .......................... 87
8.1.1
Collaborative work ........................................................................................................................ 87
8.1.2
Management issues ...................................................................................................................... 87
8.1.3
Trust .............................................................................................................................................. 88
8.1.4
Training and knowledge ................................................................................................................ 88
8.2
9
G1RD-CT-2002-00698
6.3.1
7.1
8
System requirement specification
HUMAN ASPECTS OF USING E-BUSINESS IN SMES ............................................................... 89
8.2.1
Information structures and decision taking ................................................................................... 90
8.2.2
Recommendations for e-business implementation ....................................................................... 90
8.2.3
Employees .................................................................................................................................... 91
8.3
ECONOMIC FINDINGS ON EXTENDED ENTERPRISES ............................................................. 92
8.4
TRAINING REQUIREMENTS .................................................................................................. 92
8.5
RISKS ............................................................................................................................... 93
8.6
SUMMARY OF SOCIO-ECONOMIC FINDINGS .......................................................................... 93
ANNEX .................................................................................................................................... 96
9.1
PROFILE DESCRIPTION OF EXTENDED ENTERPRISE CASE STUDIES ....................................... 96
9.2
QUESTIONNAIRE ABOUT INDUSTRIAL REQUIREMENTS ......................................................... 100
9.3
QUESTIONNAIRE ABOUT SOFTWARE REQUIREMENTS .......................................................... 104
© The e-Volution II consortium
page 3/113
WP 1
System requirement specification
G1RD-CT-2002-00698
Table of figures
Figure 3-1: Main indicators of non-primary private enterprise in 2000 ............................................. 10
Figure 3-2: e-business at a glance .................................................................................................. 11
Figure 3-3: e-business current status - The hype cycle ................................................................... 12
Figure 3-4: Diffusion of e-commerce in EU companies, 1993-2003................................................. 13
Figure 3-5: Companies reporting that e-business has at least "some significance" for the way they
operate (2002/2003) ................................................................................................................ 14
Figure 3-6: The E-Readiness of 15 sectors of the EU economy (based on the eEurope 2005 eBusiness Index) ....................................................................................................................... 14
Figure 3-7: impact of e-business on customer and supplier relationships ........................................ 15
Figure 3-8: Forms of ICT used in SMEs by size of enterprise (percentage of SMEs) 1999 and 2001
................................................................................................................................................ 15
Figure 3-9: Access to Internet 1999 and 2001, by sector of industry (percentage of SMEs) ............ 16
Figure 3-10: Italian districts (as from ASSINFORM Report) ............................................................ 17
Figure 3-11: IT expense .................................................................................................................. 18
Figure 3-12: Computer based job place percentage........................................................................ 19
Figure 3-13: IT objectives................................................................................................................ 20
Figure 3-14: IT expense distribution ................................................................................................ 21
Figure 3-15: Progress on internet connections of SMEs by size ...................................................... 27
Figure 3-16: Progress in internet connections in SMEs by sector .................................................... 27
Figure 3-17: Reasons for using computers...................................................................................... 28
Figure 3-18: Reasons for using internet in the enterprise ................................................................ 29
Figure 3-19: Problems in the introduction of new technologies in enterprises ................................. 30
Figure 4-1: locate extended enterprise within manufacturing environments .................................... 35
Figure 4-2: German test cases EE structure ................................................................................... 37
Figure 4-3: The value chain of Graphicolor ..................................................................................... 39
Figure 4-4: The value chain of EMEC ............................................................................................. 41
Figure 5-1: Work context diagram ................................................................................................... 43
Figure 6-1: Operating system agreement ........................................................................................ 60
Figure 6-2: DBMS % used .............................................................................................................. 61
Figure 6-3: DSS installation ............................................................................................................ 62
Figure 6-4: Software architecture adopted ...................................................................................... 62
Figure 6-5: ICT Employees ............................................................................................................. 63
Figure 6-6: ICT employees training ................................................................................................. 64
Figure 7-1: IT investments .............................................................................................................. 69
Figure 7-2: IT costs ......................................................................................................................... 72
Figure 7-3: Red pencil outsourcing ................................................................................................. 74
Figure 7-4: Successful outsourcing ................................................................................................. 74
Figure 7-5: Development in management support systems ............................................................. 77
© The e-Volution II consortium
page 4/113
WP 1
System requirement specification
G1RD-CT-2002-00698
Table of tables
Table 2-1: Project acronyms and abbreviations ................................................................................ 8
Table 2-2: Project definitions ............................................................................................................. 9
Table 3-1: Allocation by sector and size of Greek SMEs ................................................................. 25
Table 3-2: Allocation of Greek SMEs by administrative region ........................................................ 26
Table 3-3: Estimated Greek enterprises on main ITC use rates ...................................................... 26
Table 4-1: Overview of European RTD projects on EE ................................................................... 33
Table 7-1: MIS, EIS and DSS characteristics ................................................................................. 80
Table 7-2: OLTP vs. OLAP: Application differences ........................................................................ 82
Table 7-3: OLTP vs. OLAP: Model differences ............................................................................... 82
Table 7-4: Business Intelligence Vendor Ratings as of May 2003 ................................................... 83
Table 7-5: Extract of main vendors and products ............................................................................ 85
Table 8-1: Categories of learning (Source OECD (2001) ............................................................... 89
© The e-Volution II consortium
page 5/113
WP 1
System requirement specification
G1RD-CT-2002-00698
1 OVERVIEW
The e-volution II project aims at developing an innovative management methodology to support Extended Enterprise concerning the elaboration and implementation e-business strategies. The results
of the project will strongly contribute to the enhancement of European SME’s competitiveness in an
ever increasing turbulent environment with special focus on the complexities of the Extended Enterprise supply chain.
E-Volution will contribute to improve the competitiveness of SMEs by means of collaborations with
business partners along the supply and value chain in an Extended Enterprise, based on the effective use of ITC in the context of e-business implementation. E-Volution will offer methodological and
software-based tool support for strategic decisions making concerning e-business strategies leading
to efficiency and effectiveness improvements in the Extended Enterprise and its partner enterprises.
The operational project objectives are1:
 Development of a management methodology for the planning of e-business in EEs (identification,
conception, requirements, design) and as enabler for e-business realisation (implementation, operation, re-configuration/re-integration) and monitoring/controlling on the EE level, in particular for
SMEs, covering the whole supply chain;
 Development of assisting software tools for the efficient use of the methodology;
 Development of training material of how to apply the methodology and the software;
 Validation of the project results in Extended Enterprise test and reference cases in Germany and
Italy;
 The market launch of the methodology, software and training concept for exploitation by the partners.
1
According to project Technical Annex (TA).
© The e-Volution II consortium
page 6/113
WP 1
System requirement specification
G1RD-CT-2002-00698
2 INTRODUCTION
2.1 Background and purpose
Despite the fact that WP 1: Analysis of system requirements is already finished, the partners assessed and shared the improvement achievable from a review of the industrial requirement specification, which is valuable input for the development of the methodology and software in the framework of the WP2 and WP3. Then, requirement specifications are updated and assessed by the project test cases, Industrial Reference Groups (IRG) and project external experts in order to get insights on additional industrial problems and get first assessment of the methodology and software.
The requirement analysis has to provide the structured basis for the methodology and software development in the form of a methodology and software requirements specification. This is realised by
gathering representative information from European industry, identifying the current state of the art,
the present need and future options for EEs. The already identified requirements are reviewed, assessed and advanced to define the final requirements specification for methodology and software
development. IRG recommendations are included to consider the specific national needs and peculiarities of the participating countries.
The revision of the methodological and software requirements aims at analysing the previously identified requirements, by providing an updated state-of-the-art review (literature research and analysis
of related RTD projects) and performing new interviews. The consortium carefully selected a set (18)
of companies involved in EEs (see Annex for details of the most interesting EE case studies) and,
possibly, having experience with projects on ICT implementations, therefore able to provide insights
of the current issues and highlight more clear requirements. In order to increase the number of companies interviewed, the list of companies already contacted was reviewed and those belonging to an
EE were sorted out. Moreover, the data from old questionnaires were properly processed to verify
consistency with new information. Finally, the new interviews involved members of Italian industrial
districts (e.g. ceramics, chair, furniture districts) and German best practice EEs. In fact, districts represent a good environment to find SMEs, which are involved in an EE, playing an active role and
having more clear needs about e-business.
In order to enhance the performance of the interviews and support the data processing, two new
questionnaires were designed (available in Annex and exploiting the questionnaires already drafted), analysing the EE system according to level model2 for enterprise networks from the fractal
company3 organisation theory. Each level has been specified by characteristics to be analysed and
assessed and a common approach was shared by the partners to identify the requirement identification and assessment. The result of the requirement review are updated methodology and software
requirement specifications.
The comprehensive, European-wide market survey with a special emphasis on participating nations
is the basis for a well-founded exploitation planning. Therefore, the previous results of the market
survey were reviewed and updated in connection with the review of the draft TIP and the partner’s
and consortium exploitation planning. However, the market analysis and assessment is a continuous
task, since every partner is responsible for the monitoring of his business area to be able to develop
an effective exploitation and business plan.
2
The level model distinguishes the following aspects: performance, management, legislation, culture, strategy,
finances, humans, information, processes/material.
3 The Fractal Company concept was developed in Germany in the 90-ties as new paradigm for organisation
development. Self-similarity, self-organisation and dynamic are the basic design principles of service oriented
manufacturing companies. Reconfigurable organisations and better use of human capabilities strengthen the
company’s competitiveness in turbulent markets.
© The e-Volution II consortium
page 7/113
WP 1
System requirement specification
G1RD-CT-2002-00698
2.2 Project Acronyms, abbreviations and definitions
2.2.1 Project acronyms and abbreviations
Topic
Description
ASP
Application Service Provider
b2a/a2b
Business to administration / administration to business
b2b
Business to business
b2c/c2b
Business to consumer / consumer to business
b2g/g2g
Business to government / government to business
BSC
Balance Score Card
c2c
Consumer to consumer
EE
Extended Enterprise
ICT
Information and Communication Technology
LSE
Large sized enterprise
SCM
Supply Chain Management
SME
Small and medium-sized enterprise
USP
Unique Selling Proposition
Table 2-1: Project acronyms and abbreviations
2.2.2 Project definitions
Topic
Description
Architecture
Architecture is the defined structure based on a set of design principles. The definition
of the structure includes its components, their functions, and their relationships and
interactions.
ASP
ASP is a company that offers individuals or enterprises access over the Internet to applications and related services that would otherwise have to be located in their own
personal or enterprise computers.
b2b
B2B is the exchange of products, services, or information between businesses rather
than between businesses and consumers.
b2c
B2C is or the retailing part of e-commerce on the Internet. It is often contrasted to B2B.
b2g
B2G is the concept that businesses and government agencies can use central Web
sites to ex-change information and do business with each other more efficiently than
they usually can off the Web. B2g is synonym for b2a.
Business process
A business process is defined by in- and outputs, activities, resources, and goals.
There can be different views on a business process, e.g. organisation, functions, information, work flow.
c2c
C2C comprises all relationships between end consumers.
Data mining
Data mining is sorting through data to identify patterns and establish relationships. Data
mining parameters include: Association - looking for patterns where one event is connected to another event. Sequence or path analysis - looking for patterns where one
event leads to another later event. Classification - looking for new patterns. Clustering finding and visually documenting groups of facts not previously known. Forecasting discovering patterns in data that can lead to reasonable predictions about the future
e-business
E-business is the generic term for all electronically transacted administrative and microeconomic business activities. E-business is the use of Internet technology to conduct or enhance transactions and business relations, either on the back office side (relation with suppliers and business partners), across internal processes, or on the front-
© The e-Volution II consortium
page 8/113
WP 1
System requirement specification
Topic
G1RD-CT-2002-00698
Description
office side (relations with customers).
e-business
map
road
The e-business road map is a personalised step-by-step 'road map' or guide to develop
the business with its e-business needs. The e-business road map is the visualisation of
an executable e-business strategy.
e-commerce
E-commerce is the buying and selling of goods and services on the Internet, especially
the World Wide Web.
e-organisation
E-organisation means to concentrate on electronic support of internal communication of
employees with new media. The aim is to make the company’s data accessible for the
employees at the right time and in a suitable way and at the same time to reflect as
much “know-how” and “tacit knowledge” of the employees in the company’s information
system as possible. The internal alignment is embossed with the application of intranets, document management systems, content management systems, groupware and
the whole area of office automation.
e-procurement
E-procurement is the B2B purchase and sale of supplies and services over the Internet.
Extended
prise
The Extended Enterprise is a dynamic, market-oriented business arrangement and a
concept for integrated value chains.
Enter-
The significance of the Extended Enterprise, as distinct from the conventional suppliercustomer-relationships, is the truly integration of organisation's business processes and
information systems with those of suppliers, business partners and customers.
The Extended Enterprises concept enables efficient and effective collaboration among
value chain partners, driving productivity and innovations into new heights.
HRM
Human Resource Management
Instrument
An instrument is an expedient or device for processing of scientific or technical work.
Knowledge
agement
man-
Is the name of a concept in which an enterprise consciously and comprehensively
gathers, organizes, shares, and analyzes its knowledge in terms of resources, documents, and people skills. IT involves data mining and some method of operation to
push information to users.
Method
A method is a systematic procedure that leads to technical skills for the solution of theoretical and practical tasks. Methods are basic components of a methodology.
Methodology
A methodology is characterized by a specific application, a process model and a document structure. The specific application defines the scope, the process model defines
the logical and timely combination of tasks, which are using methods, and the document structure defines rules for integration of artefacts resulting from the use of methods.
Model
A model is the simplified visual or mathematical description of structures, functions or
processes.
Road map
A road map is an extended look at the future of a chosen field of inquiry composed from
the collective knowledge and imagination of the brightest drivers of change that field.
Road mapping
Road mapping is the process of how to develop a road map. It is a method to fore-cast
and to visualise future developments in a company. It visualises scenarios and options
of future activities, under the condition that the business is continued and offers solutions for the system for which it is created.
RTD
Research and technology development
SCM
Supply Chain Management
SW
Software
Table 2-2: Project definitions
© The e-Volution II consortium
page 9/113
WP 1
System requirement specification
G1RD-CT-2002-00698
3 SITUATION ANALYSIS OF SMALL AND MEDIUM
SIZED ENTERPRISES IN EUROPE
The aim of this section is to give an overview of the SME situation in Europe. SMEs, as partners in
Extended Enterprises, are the target group of the e-volution II project. In order to better understand
their problems and requirements, a short overview about the situation of SMEs in Europe, and more
specifically in the partner countries Italy, Germany and Greece is given, based on third party surveys.
3.1 SMEs and e-business in Europe
SME structure and economy
The latest observatory report of SMEs in Europe for 2002 provides the following overview: 4 In the 19
member states of the European Community there are over 20 million enterprises in non-primary private enterprise, providing employment to almost 122 million people. The vast majority of these enterprises are SMEs (defined as enterprises with less than 250 employees). SMEs represent two
third of total employment. Within SMEs, total employment is split up roughly equally between micro
enterprises (employing less than 10 employees), and small and medium-sized enterprises. On average, an enterprise provides employment to 6 persons. However, this varies between 2 persons in
micro enterprises, and over 1,000 in large enterprises. Turnover per enterprise varies between €
600,000 in SMEs, and € 255 million in large enterprises. The smaller the enterprise, the smaller its
geographical market area tends to be. This shows up in the propensity to export: SMEs export only
13 % of turnover, while LSEs sell 21 % of total turnover abroad. Due to the fact that SMEs also supply goods and services to large (exporting) companies, the indirect exports of SMEs are significant.
The larger an enterprise, the greater its labour productivity and its profitability tends to be. To some
extent, this is a result of differences in industry structure between SMEs and LSEs. European nonprimary private enterprise is relatively small-scaled in comparison with the USA and Japan.
Figure 3-1: Main indicators of non-primary private enterprise in 2000
Differences between countries regarding average enterprise size can be explained by economic
prosperity, i.e. using per capita GDP as an explanatory variable. This relation does not explain differences between Europe, Japan and the USA; instead, differences in economic structure should be
called for to explain these differences.
Over the past decade, real turnover growth of European enterprises has been export-led. As a result
of this, and the fact that large enterprises have a higher propensity to export, LSEs have out performed SMEs with respect to real turnover and production growth. Viewed by domestic sales and
exports growth separately, SMEs and LSEs performed about equally. Labour productivity in SMEs
grew gradually between 1988 and 2001 by 1.7 % annually. Labour productivity in LSEs grew much
faster, especially during the 1990/1993 period of low economic growth. As size differences regarding
4
OBSERVATORY OF EUROPEAN SMEs by KPMG Special Services and EIM Business & Policy Research in
the Netherlands in co-operation with European Network for SME Research (ENSR), and Intomart. 2002
© The e-Volution II consortium
page 10/113
WP 1
System requirement specification
G1RD-CT-2002-00698
productivity growth are larger than differences with respect to real value added growth, employment
growth was negatively correlated with enterprise size, even though real value added growth was
positively correlated with enterprise size. As a matter of fact, it was small and especially micro enterprises where employment recovery since 1995 started. Notwithstanding lower labour productivity
growth in SMEs, and correspondingly fast rise of unit labour costs, profitability developed roughly
equally in both SMEs and LSEs. SMEs have been able to pas through higher costs into higher prices and to improve profit margins slightly as well.
E-business of European industries
E-business is the generic term for all electronic transacted administrative and microeconomic courses of business. E-business offers the ability to affect all communication flows in the company via the
intranet, between partner firms e.g. supplier and producer. E-business enhances the possibility to
work efficient and more flexible with in-house processes, to work closer together with contractors
and to be responsive to customer’s expectations as well as to supply a want.
e-government
e-government
business-to-administration (b2a)
business-to-administration (b2a)
e-procurement
Business partners/
suppliers
Extranet
e-business
e-business
Own
enterprise
e-commerce
Internet
Customers
consumer-toconsumer (c2c)
Intranet
internal business
business-to-business (b2b)
Supply Chain Management
e-organisation
business-toemployee (b2e)
business-to-business (b2b)
business-to-consumer (b2c)
Customer Relationship Management
Figure 3-2: e-business at a glance
In 1999 the Gartner Group Inc. released a study that said that about 75 % of all e-business projects
will fail because of poor planning and unrealistic expectations of new technology, according to a
study. According to them, most companies implementing e-business strategies don't fully understand the new technologies behind e-business. At the same time, companies become so dazzled by
those technologies that they turn away from old-fashioned business planning and strategies. Five
years later, the forecasted development in e-business proved its correctness. E-business has now
reached the stage where more and more integrated e-business is realised along the whole value
chain.
© The e-Volution II consortium
page 11/113
WP 1
System requirement specification
G1RD-CT-2002-00698
„e“ is best
Dot.comdownturn
European
IPOs
US-IPOs
1997/98
Dot.com
Start-ups
Internet
www
Technology
driver
1990-1996
Anticlimax
of investors
@
Climax of
exaggerated
expectations
1998
2000
Post
E-Business
Failure of
dotcoms
General economic anticlimax
True
E-business
Trough of disenchantment
2002
Restart
2004
2006
Profitable
business
2008
2010
By Gartner Group Inc. 1999
Figure 3-3: e-business current status - The hype cycle
The European Commission, Enterprise Directorate General, launched the e-Business Market Watch
(the e-Business W@tch) to monitor the growing maturity of electronic business across different sectors of the economy in the European Union. In the following, the main results of this report are summarised as this perfectly describes the business environment for the e-volution project.
In spite of the continuing overall difficult economic situation and market conditions for business innovation and investment, electronic business continues to show a dynamic development in the European Union. New technological developments on the one hand, and the increasing competitive
pressure on companies in a global economy on the other, resulting in a constant search for opportunities to cut costs, are the main drivers. Following the e-business W@tch Report 2003, 60 percent of
all EU companies said in 3/2003 that e-business had already at least some significance in the way
they operate. This is an increase by five percentage points compared to June 2002. About 11 percent said it constituted a significant part of their business activities. The share of companies which
attributed significance to electronic business has increased in all size-classes.
The general findings pointed out by the e-business W@tch report are:
− Improvements in infrastructure – from basic access to quality connections: The vast majority of
enterprises from all sectors and countries uses computers and has Internet access. 93% of all
employees from the seven sectors surveyed by the e-Business W@tch in March 2003 work in
companies that use computers and 87% in companies with Internet access. As in 2002, the share
of "off-liners" was found to be highest in retail and in the food and beverages producing industry.
− From remote to wireless: Enabling remote access to the company's computer network is an indicator of how advanced a firm's ICT infrastructure is. Remote access is a technical prerequisite to
facilitate flexible work forms such as mobile work and home based telework. The technical infrastructure is currently most widespread in high-tech manufacturing and service sectors. The average deployment of remote access was 43% (of employment) in the seven sectors covered in
2003, with an observable increase in medium-sized and large companies compared to 6/2002.
© The e-Volution II consortium
page 12/113
WP 1
System requirement specification
G1RD-CT-2002-00698
− The IT skills gap has narrowed, but not totally disappeared: The e-Business W@tch has evidence
that the percentage of companies seeking IT specialists in 2002/03 was lower than in previous
years. Only 8% of all companies and 40% of large companies reported demand in 2002/03.
− E-commerce activities - rapid development of online purchasing: Online selling has not yet
reached the volumes that were anticipated a few years ago during the boom time of the Internet
Economy. More than 10% of the companies selling online reported that online sales account for
less than 10% of their total sales. Thus online selling is typically a by-product complementing the
main sales channels. Electronic procurement has shown a rapid development since the late
1990s. One out of three enterprises makes online purchase for maintenance, repair, and operating goods or direct production goods.
Figure 3-4: Diffusion of e-commerce in EU companies, 1993-2003
− E-commerce and e-business integration: One of the main challenges for companies is to move
from e-commerce as a sideline activity to considering e-business as an IT based integration of
business processes in general. This process is under way. But e-integration is less important for
very small companies. About 20% of all companies that make online purchases themselves have
integrated their IT system with the system of a supplier for that purpose. Business process integration can be greatly facilitated by advanced e-business solutions. But implementation is cost intensive, requires a high level of managerial skills, and business (re-)engineering in the enterprise
itself and among enterprises. Such e-business software includes Customer Relationship Management (CRM), Supply Chain Management (SCM) systems and Enterprise Resource Planning
(ERP) systems.
− Every second enterprise considers e-business as relevant: For more than 50% of the companies
surveyed 3/2003 e-business is a "significant part" or "some part" of the way they operate. There
are great differences, however, between sectors.
© The e-Volution II consortium
page 13/113
WP 1
System requirement specification
G1RD-CT-2002-00698
Figure 3-5: Companies reporting that e-business has at least "some significance" for the way
they operate (2002/2003)
Companies are down-to-earth in their forecast of the role which e-business will play in the future. "ebusiness sceptics" still constitute about 50% of all enterprises. The impact is currently perceived
most significant in those sectors which manufacture or operate IT and electronics themselves (ICT
services, electronics industry) and in sectors with a high potential for digitisation of service delivery
(publishing, business services).
Figure 3-6: The E-Readiness of 15 sectors of the EU economy (based on the eEurope 2005
e-Business Index)
The most significant impacts of e-business concern the internal work processes. More than a 25% of
the surveyed enterprises say that these have significantly or somewhat changed as a consequence
of introducing electronic business processes. However, the assessment of changes on the organisation structure and the relations to customers and suppliers is very similar.
© The e-Volution II consortium
page 14/113
WP 1
System requirement specification
G1RD-CT-2002-00698
Figure 3-7: impact of e-business on customer and supplier relationships
E-business is a means to an end; ITC is the enabler for e-business. E-business across enterprise
boarders and along the value chain depends is based on Internet technologies. The 2002 observatory report of European SMEs gives an overview of ICT use by SMEs in Europe5. SMEs use various
forms of ICT. A clear size class pattern does emerge. The exception is, of course, ‘device for credit
cards’ as here an important sector effect is present. In the retail sector, which is private-customer
oriented, the penetration rate of the credit card device is 58 %. The use of mobile phones is quite
widespread, reported by almost 80 % of micro enterprises, and by more than 90 % of medium sized
enterprises.
Figure 3-8: Forms of ICT used in SMEs by size of enterprise (percentage of SMEs) 1999 and
2001
5
OBSERVATORY OF EUROPEAN SMEs by: KPMG Special Services and EIM Business & Policy Research
in the Netherlands in co-operation with: European Network for SME Research (ENSR), and Intomart. 2002
© The e-Volution II consortium
page 15/113
WP 1
System requirement specification
G1RD-CT-2002-00698
The majority of SMEs use stand-alone PCs, and PCs in networks. 21 % of the micro enterprises are
operating without a PC. The size class pattern is clear. Smaller enterprises are rapidly catching up.
The increase in the percentage for the micro enterprises in the 1999-2001 period is as high as 75 %.
There differences that existed between sectors of industry are more and more reduced. In 2001 70
% of SMEs in all sectors tend to have access to the Internet, only in business services is a considerably higher score found (80 %).
Figure 3-9: Access to Internet 1999 and 2001, by sector of industry (percentage of SMEs)
Access to Internet by country shows a more varied pattern. Several countries were catching up fast,
such as Greece, Italy, Spain and the United Kingdom. Especially the performance of Greece, from
only 24 in 1999 % to 78 % in 2001, was astonishing. For non-users, the single most important reason for not using the Internet are no skilled personnel; expected non-profitability; no trust in technology/security; no confidence in regulatory environment; national differences in consumer protection;
cost of product distribution; insufficient customers' access to Internet; does not apply to type of enterprise/product.
Regarding e-business it is obviously that the distribution of information is the major category, however 30 to 40 % receive orders through the Internet. About 15 % of the SMEs are in a position also
to deliver products or services via the Internet.
3.2 SMEs and e-business in Italy
The structure
Italian economical structure is characterized by a myriad of small enterprises born on account of
individual entrepreneur’s initiative and, except some successful case of industrial districts, toil to
integrate them.
ISTAT6 data provide a picture of this fragmentation: in the year 2000, companies with less than 10
employees represent approximately 95% of the total; SMEs (10 to 250 employees) represent instead 4.7% of the total and occupy nearly 5 million workers (33.5% of Italian workforce).
An outsourcing process is outlined by the statistics: SMEs involved in the services are approximately
76 thousand, nearly 40% of the total. Districts reveal themselves as a forge for the economic growth
6
ISTAT: the Italian official institute for national statistics.
© The e-Volution II consortium
page 16/113
WP 1
System requirement specification
G1RD-CT-2002-00698
of the enterprises and for the development of the occupation. In the 199 districts analysed by ISTAT
in the 2002, the growth of employees in the last ten years was about 9.1%, against a growth of 2.5%
in the areas not characterized from phenomena of aggregation between enterprises. The occupation
remains stable in the manufacturing districts, while grows in the commerce (+5.4%) and in services
(+42.6%). The outsourcing process of Italian economy is already spreading also in the industrial
districts.
The competitive scene during the last years has been changing in some ways: globalisation of the
markets is changing the shapes and the intensity of the competition with the arrival in the domestic
market of numerous foreign companies of greater dimensions. In order to face the growing competition, the more advanced and articulated SMEs have been forced to adopt organizational models
based on the processes, abandoning the traditional functional model.
In the more innovative companies the organization of the business has made a further step ahead
adopting closer relations with the customers and the companies of the production chain (filiera) trying to gain the status of Extended Enterprise.
Many SMEs see the innovation not only in their products, but also in their internal processes and in
the organization as one of the keys to compete and grow inside a high competitive market. This approach leads to invest in technologies, even if the intensity of this effort assumes various characteristics depending on the considered business landscape.
Italian Districts
An industrial district is a limited area where small and medium enterprise are organised in a network
constellation. This definition comes from the Anglo-Saxon cluster, an area in which public institutions
and companies characterised by the same specialisation of the production, lives together, have continuous interactions and are economically connected.
Foods
Paper
Mechanics
Metallurgy
Jewelry
Shoes
Number
Number of
of districts
districts
199
Number
Number of
of enterprises
enterprises
90.000
Number
Number of
of enterprises
enterprises
per
district
per district
450
Number
Number of
of employees
employees
740.000
Employees/enterprise
Employees/enterprise
8,2
Turnover
Turnover (Mld
(Mld €)
€)
72,6
Turnover
Turnover per
per enterprise
enterprise
805.673
Export/Turnover
Export/Turnover
41,6%
Rubber and plastics
Furniture
Textile and clothes
Figure 3-10: Italian districts (as from ASSINFORM Report)
Criteria that generally define a district are based on a set of indicators such as the manufacturing
industrialisation, the number of enterprises, the specialisation of the production and the related concentration. Nowadays according to the evolution of the production systems, the cluster traditional
system, based on the closeness of the production premises, is being replaced by a model based on
the virtual closeness of the enterprises and enabled by the ICT technologies. It is a meta-district in
which an enterprise, not necessarily of big size, playing a leading role, is able to integrate the
knowledge and the processes within the founded SMEs constellation.
© The e-Volution II consortium
page 17/113
WP 1
System requirement specification
G1RD-CT-2002-00698
SMEs IT expense
IT expense composition and relative evolution, during the last years, put in evidence the strong
technological difference existing between SMEs and large enterprises, but also between small enterprises and medium enterprises. This difference, rather than to be overwhelmed, seems to increase year by year.
In 2002, because of instable economic trends, small enterprises drastically reduce the level of the IT
expense, (-5,2%). Also medium enterprises, that in the 2001 had intensified IT investments approaching dynamics of expense typical of the great companies, reduce the budgets for IT expense.
Investments are estimated with more attention and caution resulting in delayed projects. The effect
is IT expense contraction, less in the small enterprises, but more in large enterprises (Figure 3.1).
As a consequence of this evolution, SMEs IT expense on the value of IT market is further on decreasing: the quota slips from 43% of 2000 to 42.2% in 2002 (Figure 3.1).
SMEs investments reduction affects all those projects that do not offer a safe return in short times.
In this way SMEs IT expense in 2002 loses a part of its strategic value, almost completely addressed to overwhelm already existing gaps inside the company or to complete previous initiatives,
rather than to support new and complex plans for the reorganization of the business model.
Large enterprise
Medium enterprise
Small enterprise
Consumer
Large enterprise
Medium enterprise
Small enterprise
Consumer
(% Value / total value)
Values in thousands
thousands of
of Euro
Euro and
and in
in %
% (source: ASSINFORM Report)
IT expense / enterprise dimension
IT expense / IT market value
Figure 3-11: IT expense
Technology returns to carry out a role of mere support of the daily operative processes not being
used for their optimization. In some cases IT expense is strictly connected to the daily management
operations and is classified as current costs instead as investments. Therefore, the difference between enterprises became deeper not only for the different budget allocated in the IT technologies,
but also for the reduced strategic contents of the IT investments.
These considerations are mainly valid for small enterprises that in 2002 denounce the more pronounced decrease of IT investments.
Moreover, the high complexity of the organization and related processes mainly affects medium enterprise’s behaviours and strategies rather than large enterprises, and emphasizes the difference
between medium and small enterprises.
In the medium enterprises, more than in small ones, technological innovations is the most important
factor of the competitiveness. Investments in IT solutions are more articulated and also the projects
are mainly focused on the increase of the internal efficiency, on the innovation and strategic optimi© The e-Volution II consortium
page 18/113
WP 1
System requirement specification
G1RD-CT-2002-00698
zation of the various business functions. However, in these companies, more than in the large enterprises, it is more evident the lack of specific internal competences, analysis capabilities and solutions selection: the autonomy of the medium enterprises is limited, so that many analysis, planning
and implementation step of IT solutions are outsourced.
SMEs decisions on investment are influenced by several factors, also external to the enterprise.
External consultants or suppliers are acquiring more and more importance, not simply helping SMEs
in the choice of the right IT solution, but also becoming promoters of new initiatives, because they
have specific competences that SMEs are not able to develop and maintain inside7: the role of these
external resources is becoming similar to IT department in large companies.
IT Solution: spread and employment
The spread of basic IT solution in the SMEs is still unsatisfactory, especially in smaller enterprises.
According to data released by NatWest (March 2004), Italian SMEs are willing and ready to implement e-business solutions and, in particular, e-commerce. The results are strongly improving
against a few years ago.
in 1996, SMEs using email were only 14%, today 82%. SMEs involved in service and trade are the
ones, which are exploiting at most the internet and email.
Moreover, there are 92%, which have a PC and 50% have IT networks to share documents within
the company. The increase is significant, since in 2002 only 57% had a computer based job place.
(Percentage of employees with PC )
Diffusion of PC in SMEs, 2000-2002
(as from ASSINFORM Report)
Figure 3-12: Computer based job place percentage
Besides, SME’s employees use personal computer in a not satisfactory way. Usually, the PC is
more common in the administrative area than in production. IT solutions are still used to answer day
by day procedures rather than to support and to optimize internal processes.
The survey shows that : 20% implemented wireless technology, 66% set-up a website.
Moreover most of SMEs does not use sophisticated technology: simple and individual productivity
tools are particularly widespread, while only medium enterprises adopt management solutions and
production support tools.
Most of the SMEs perceive IT products as a necessary tool to increase the internal procedures efficiency, whereas they do not care to improve strategic processes.
7
Usually, inside SMEs organization there is not an IT structure: in fact recent study (NetConsulting 2002) reveals that less than 20% of
SME has an internal IT responsible.
© The e-Volution II consortium
page 19/113
WP 1
System requirement specification
G1RD-CT-2002-00698
Service Level Increase
for internal user
Increase productive
efficiency
Increase internal
productiveness
Strategic support
Management cost
reduction
Business partner
linking
Development cost
reduction
Maintenance cost
reduction
IT objectives importance for
enterprises
Value scale ranging from 1 (low relevance ) to 5 (high relevance )
(source : ASSINFORM Report )
Figure 3-13: IT objectives
SMEs have some problems to measure the increase of performance due to the introduction of IT
tools and IT solutions: analysis are based on qualitative appraisals, focusing more on generic impressions than on quantitative measures. The appraisal of project ROI is not a company wide management criteria used inside SMEs.
Independently from the dimensions and IT knowledge, Internet is surely the tool that all companies
have learned to know and to appreciate. All SMEs (98.5% as from NetConsulting, 2002) have an
Internet connection; even if the knowledge and the habits of a strategic use that the company could
make of the Net is not diffused. Less than 40% of the SMEs employees have an independent and
stable Internet connection; this data contrasts with the Internet economy specific requirements of
continuous interaction between departments and persons, connected constantly to the Net in real
time.
While all SMEs uses the Net for the e-mail and the search of information, less then 50% implements
web based procedures, introducing intranet or e-business solutions. In order to wide-spread Internet
access and more advanced use of the Net, SMEs should fulfil some fundamental conditions:

Security and trusted web transactions. According to ISTAT the percentage of SMEs that carry
out on-line purchases varied from 10.8%, in small enterprises (10-50 employees), to 18,8% in
medium ones. Medium enterprises join the e-commerce exchange like large enterprises, 20% of
which carry out on-line purchases or sales. The delay of small company is due to not suitable IT
product and the fear about transactions security. However, latest data from NatWest (March
2004) show that the implementation is improving faster than the use. Indeed, despite the high
concern and costs related to security, more than 20% of SMEs implemented and offered to the
customers online payment and 11% started the development activities to implement it by end
2004.

Systems reliability and stability;

Benefits and costs indicators measuring the development and subsequent management of Internet based solution.
IT investments driving factors
Various reasons can induce SMEs to intensify their IT investments. One reason is the necessity to
communicate and to interact with other companies involved in the same value chain; in this case
enterprises should align the instrument in order to maximize their cooperation. The more other companies of the same value chain use sophisticated and advanced IT products, the more small enterprise will be stimulated towards the update of IT tools.
In fact e-procurement projects are growing, at least inside well-structured enterprises: they allow to
reduce relationship’s times and costs.
© The e-Volution II consortium
page 20/113
WP 1
System requirement specification
G1RD-CT-2002-00698
Moreover IT investments are necessary in order to improve communication channels and administrative and business documents exchanging. In this case also small companies are aware of the
importance to use tools that enable high effective interactions with other partners inside the same
value chain. EDI model is still the tool mainly used by those companies that have decided to automate the relationship processes (according to ISTAT, EDI solutions are available in 6% of small
companies (10-50 employee), and between 10 to 20 % in the medium enterprises) and it is evolving
towards web based solutions.
In industrial districts, companies belonging to a network constellation, feel the need of deep and frequent interactions and the presence in the value chain of a company which is playing a dominant
role, force other SMEs to invest in IT solution in order to align themselves. Inside the districts not
always prevails cooperation between enterprises: sometimes the competitive contrast is emphasized and becomes an obstacle to the realization of a well-structured chain production. In this case
IT investments are determined by the strategies of the single enterprises engaged to defend their
own competitiveness both outside and inside the district.
Sometimes SMEs increase IT investments in order to better fulfill customer’s demand, in communication and proximity terms. The improvement of the relations with customers often leads to focus IT
investments on web based applications and solutions.
At last, other investment stimulus factors are represented by promotional initiatives that the category
or territory associations can carry out towards affiliated enterprises and by the availability of fiscal
incentives to support IT projects.
Hardware
Software
Training
Internet
E-Commerce
Value in percentage of sample’s enterprises – multiple answer
(source: ASSINFORM Report)
Figure 3-14: IT expense distribution
However, now IT projects and IT investments started from enterprise associations’ initiatives are not
numerous and the fiscal facilities are rarely used in order to promote on a wide scale the spread of
an authentic IT culture. From a NetConsulting analysis lead during 2002 year, emerges that when
the companies can use financial facilitations and fiscal incentives for IT projects, the related investments are, first of all, oriented to overwhelm the gap of basic IT products (basic hardware and software), rather than to develop new projects in order to create value through the e-business. Only in
few cases there had been initiatives aiming to create IT competences and IT culture to all levels,
training the staff .
3.3 SMEs and e-business in Germany
In 2003 the TechConsult GmbH undertook a comprehensive analysis about use of Internet and ebusiness in Germany industry. The main focus is on SMEs. 61% of the interviewed companies have
10-99 employees, about 1/3 has 100-499 employees. In this section the parts, most relevant to the
project are summarised.8
E-business application
8
Use of Internet and e-business in German medium-sized companies in 2003. An analysis of TechConsult
GmbH by order of Impulse journal and IBM.
© The e-Volution II consortium
page 21/113
WP 1
System requirement specification
G1RD-CT-2002-00698
Classification of the company regarding e-business application:
I. Offline (neither use of email nor of Internet and online services): 2% (forecast: 2%)
II. Passive online (use of email reps. Internet and online services): 13% (forecast 12%)
III. Homepage and web marketing (information in the web or web-based marketing without integration of business processes): 44% (forecast 43%)
IV. Online Shop (e-commerce and electronic customer data analysis): 19% (forecast 17%)
V. Digital network (IV plus data exchange with suppliers): 16% (forecast: 17%)
VI. Electronic Supply Chain (electronic Supply Chain, fully-automated integration of business processes and of customers and suppliers): 7% (forecast 8%)
85% of the interviewed are active users. At the moment the main focus lies in the presentation of the
company and their products. However, many companies think about expending the activities to a
higher level, especially big companies, where a distinct tendency towards the implementation of digital networks or supply chains can be spotted.
Pro and contra e-business
Reasons for the implementation of e-business:
− Profit from new chances in business competition: 79%
− Customer demand: 54%
− Forced by competition: 52%
− Cost reduction: 32%
Reasons against the implementation of e-business:
− Doesn’t match the company/products: 53%
− Costs are too high: 44%
− Operating costs are too high: 38%
− Lack of customer acceptance: 25%
− Lack of acceptance on the part of the management: 21%
− Lack of know how: 19%
The main argument against the implementation of e-business is for 53% of the interviewed, the contradictoriness of e-business with the company and their products. Especially industrial companies
with complicated products, keep intensive personal contact in high esteem. The fear, that customers
wouldn’t accept the Internet as a transaction channel, is widely spread in the retail section. Finally
the costs are a convincing argument against e-business implementation. Nearly half the companies
think that the financial efforts would be too high.
Effects of e-business and the Internet on the companies
Concrete effects of e-business on the company on a scale from 1 (great) to 4 (none):
− Improved corporate image: 1.8
− Improved communication with customer/supplier: 1.8
− Increased customer orientation/loyalty: 2.2
− New customer acquisition: 2.5
− Improved brand image: 2.6
− Business optimisation: 2.7
− New, additional distribution channel: 2.8
© The e-Volution II consortium
page 22/113
WP 1
System requirement specification
G1RD-CT-2002-00698
− New, additional sourcing channel: 2.9
− More customer data: 3.0
− Access of foreign business: 3.3
− Extension of foreign business: 3.3
The pole position on positive effects of e-business share the points “better communication with customers and suppliers” and “improvement of the company image”. The effects on an improved customer loyalty can’t keep up with those two, although big companies have realised great results in
this field. The possibilities to use E-business as a distribution- or procurement channel also isn’t accessed to a great extend.
Potential of e-business applications
E-business applications with the greatest potential on a scale from 1 (great) to 4 (none):
− Information exchange: 1.8
− Marketing: 2.0
− Create first contact between customer and supplier: 2.2
− Customer support: 2.3
− Distribution: 2.3
− Sale: 2.4
− Electronic payment: 2.7
− Remote maintenance/diagnosis: 2.8
− Corporate business procedures: 2.9
− Virtual organisation: 3.2
− Product development in cooperation with other companies: 3.3
In general the expectations on the potential of e-business Applications are still high. Companies see
the greatest potential in the fields of information exchange and general marketing activities. Customer related functions, such as electronic sale and distribution, contact initiation and customer support are further fields which seem to have potential.
Use of Internet today and in the future
Occupancies of the Internet today and plans for the future:
− Communication via e-mail: 98% (future: 98%)
− Company presentation (homepage): 94% (future: 96%)
− Access product and service information: 79% (future: 81%)
− Gain company information: 75% (future: 81%)
− After sales services via Internet (online hotline): 54% (future: 52%)
− Online marketing/advertising: 50% (future: 52%)
− Customer care via Internet: 50% (future: 43%)
− Cooperation with suppliers and partners (SCM): 45% (future: 55%)
− Purchasing of products and services: 44% (future: 54%)
− Sale of products and services: 40% (future: 45%)
− EDI: 16% (future: 20%)
− Electronic archiving: 12% (future: 17%)
© The e-Volution II consortium
page 23/113
WP 1
System requirement specification
G1RD-CT-2002-00698
The main fields of Internet application are still the use of e-mail for communication and the company
presentation by means of a homepage. 75% of all companies use the Internet to get information on
partners and competition and even more to gain information on products and services. In the future
the two internet applications will be of the same importance. Surprisingly, feel half the companies
the need to reduce the customer care services in the future, while the share of companies using the
Internet to sell or by products will increase to 45%. The use of EDI will only increase for big companies.
Achievements of e-business users
Actual achievements of e-business implementation:
− Revenue stabilisation: 52%
− Reduction of delivery times: 39%
− Distribution costs stabilisation: 38%
− Cheaper payment handling: 36%
− Sales increase: 30%
− Reduction of distribution costs: 29%
− Storage costs stabilisation: 24%
− Reduction of storage costs: 14%
− Miscellaneous: 7%
52% of all companies were able to stabilise their revenues by means of E-business activities. Further great achievements are the reduction of delivery times and the costs for the handling of payments as well as the stabilisation of distribution costs. On the other hand fall the reduction and stabilisation of storage costs with 14% and 24% relatively short.
Application of e-business solutions
Engaged e-business solution respectively planned applications:
− Standard software: 62% (future: 64%)
− Internal developed individual solutions: 28% (future: 27%)
− External developed individual solutions: 41% (future 42%)
Most companies still use standard software and prefer external developments to the internal development of software. In general only big companies trust in their own resources and know how to
develop intern solutions.
E-business – expectations and problems
Expected break-even point of the E-business engagement:
− Within 6 months: 17%
− Between 6 – 12 months: 22%
− Between 12 – 24 months: 45%
− Won’t be profitable in the near future: 13%
− Will never be profitable: 3%
45% of the companies expect to reach the break even point of their e-business engagement after 12
to 24 months. Not even half that many hope to have reached that point after 6 to 12 months. And
only 17% plan to be profitable within 6 months. Then, there is a 13% share, which doesn’t believe at
all in the e-business profitability in the near future.
Biggest problems during the implementation phase of the e-business solution:
© The e-Volution II consortium
page 24/113
WP 1
System requirement specification
G1RD-CT-2002-00698
− Lack of know how: 34%
− Integration into the existing infrastructure: 33%
− Tight schedule: 27%
− Selection of external consultants: 21%
− Project retards: 21%
− Lack of complete solutions: 20%
− Integration into existing enterprise resource planning system: 20%
3.4 SMEs and e-business in Greece
SMEs in Greece are in their majority one-ban businesses corresponding to 81% of all enterprises9.
Another 11% of enterprises correspond to partnerships, while the percentage of limited companies
or limited liability companies stands at 4% and 2% respectively.
10% of enterprises were established before 1970, 41% between 1971-1990, and 41% between
1991-2000. The percentage of new enterprises established after 2001 stands at 8%.
The percentage of SMEs with a secondary field of activity stands at 10%, with 33% on average participating in secondary activities. 6% of enterprises have other branches, of which 39% have more
than one branch.
93% of people working at SMEs are permanently employed while 59% are men and 41% women.
The average age of employees is 39.5. In particular, age distribution is as follows: 24% up to 30
years, 44% from 31-40 years, 22% from 41-50 years and 11% older than 51 years of age. 57% of
employees are secondary education graduates, 21% primary education graduates and 22% university graduates.
91% of people asked worked at the general management division, 88% being owners and 6% general managers. 57% of people asked were secondary education graduates, 17% primary education
graduates and 26% university graduates.
The two tables below show distribution by size, field of operation and region for all SMEs employing
1 to 150 staff, based on the National Statistical Service Enterprise Records for 1995, corresponding
to the reference population of research.
Table 3-1: Allocation by sector and size of Greek SMEs
9
The main source of the data provided in this paragraph are based on the hHellenic research on the use of new Information & Communication Technologies by Small and Medium-sized Enterprises, December 2001 – January 2002
© The e-Volution II consortium
page 25/113
WP 1
System requirement specification
G1RD-CT-2002-00698
Table 3-2: Allocation of Greek SMEs by administrative region
The tables provided show two significant characteristics of SMEs in Greece:

Absolute prevalence of very small enterprises employing from 1 to 10 staff (97.8%), corresponding almost in total (98%) by enterprises employing 1 to 5 staff.

High sectoral concentration in commerce, where 44% of SMEs operate in only one field.
High regional concentration of SMEs, where 59% of enterprises are located near the Athens
(42%) and Thessalonica (17%).
Use of ICT in SMEs
In 2002 the rate of use of computers in SMEs was 35.6% showing a rate of increase 4.1% (compared to the relatively low level of use for 2001) and indicates stability in the introduction of computers in 2002. The rate of use of computers for 2002 is about six percent less than the rate of use estimated for the year, based on the intentions expressed by enterprises in the research carried out in
the previous year, a development which will be further examined below. The differentiation in the
use of computers between micro enterprises of one to five people standing at 31.7% and enterprises
with more than 11 staff standing at 92.3% is rather significant. The size of an enterprise constitutes the main determining factor for the introduction and use of ITCs.
Table 3-3: Estimated Greek enterprises on main ITC use rates
© The e-Volution II consortium
page 26/113
WP 1
System requirement specification
G1RD-CT-2002-00698
According to information of e-business W@tch for 2002, computers are used in 94% of enterprises
in EU (15 countries). It is reminded that based on the previous analysis, this percentage is only
comparable to the percentage of use of computers for enterprises with more than eleven people of
this research.
The rate of use of the Internet in 2002 stood at 19.6% (15.4%) showing a rate of increase 27.6%
compared to 2001. The use of Internet was up by 4.2 percent and is 2.2 percent lower than the respective percentage estimated for 2002 on the basis of intentions expressed by enterprises in research of the previous year.
Figure 3-15: Progress on internet connections of SMEs by size
Figure 3-16: Progress in internet connections in SMEs by sector
© The e-Volution II consortium
page 27/113
WP 1
System requirement specification
G1RD-CT-2002-00698
The main reasons to use computers are accounting office applications (49% of SME) and office automation (44% of SMEs), followed by production and commercial applications. About 20% of enterprises having computers state the use of the Internet or electronic mail among the main reasons for
using the Internet.
Figure 3-17: Reasons for using computers
The major departments using computers, as stated by 55% of enterprises, include the accounting
office and sales, production or warehouse, according to another 25%. About 8% of enterprises mentioned there was an increase in the number of PC users in the enterprise in the last three years,
while 91% answered that no change was observed. Applications showing an increase of PC users
include office automation (51%), accounting office applications (36%), use of electronic mail (18%)
and general use of the Internet (16%).
Enterprises using the Internet use it for an increasing number of applications. 70% of SMEs use the
electronic mail, of which 46% on a daily basis (i.e. 32% of enterprises with Internet) and 47% from
one to three days weekly. 64% use the Internet for general information, of which 45% on a daily basis (29% of enterprises with Internet) and 42% from one to three days weekly.
© The e-Volution II consortium
page 28/113
WP 1
System requirement specification
G1RD-CT-2002-00698
Figure 3-18: Reasons for using internet in the enterprise
Also, remarkable are the percentages of enterprises using the Internet for transactions with the
State. 29% of enterprises use the Internet for VAT issues. 12% use it on a daily basis, 18% two or
three days a week, while 44% once or twice a month. Transactions with ΤΑΧΙS are carried out by
23% of enterprises, of which 13% on a daily basis, 20% one to three times a week, while 33% one
to three times a month. Transactions with the Social Security are carried out by 23% of enterprises,
of which 11% on a daily basis, 25% one to three times a week, while 45% once or twice a month.
Online banking transactions are carried out by 18% of enterprises connecting to the Internet. Of
these, 13% carries out daily transactions, 47% one to three times a week, while 22% once or twice a
month. Supplies via electronic commerce are carried out by 8% of enterprises with Internet (i.e.
1.5% of all SMEs), while sales via electronic commerce are made by 6% of enterprises (i.e. 1.2% of
all SMEs). In total, electronic commerce transactions have remained unchanged, at the same low
levels of 2001.
It should be noted that enterprises employing more than 11 people using the Internet show much
higher rates of online transactions than the above average. In most cases, these percentages are
more than two-fold the respective average for all SMEs. Transactions with the state are mentioned
as an indication, where percentages of enterprises involved in electronic transactions for VAT, Social Security Fund, ΤΑΧΙS corresponded to 52%, 48% and 38% respectively. The percentage of enterprises involved in online banking transactions is 31%, while the respective percentages for electronic commerce – supplies and electronic commerce- marketing, stood at 14% and 10%.
The percentages of electronic supplies and marketing out of all enterprises employing more than 11
people stood at 10% and 8% of enterprises, respectively. The percentages of use of electronic
commerce are comparable to European average rates, with 34% for electronic supplies and 13% for
electronic marketing for the year 2002.
Overall, there are more than 7,500 corporate sites currently operating in the Greek web market. The
majorities of them are hosted and operated by Internet Service Providers (ISPs) or technology providers and mainly promote the company profile (static pages).
Among them, there is a significant number of companies (mainly medium to large corporations) that
have invested in establishing infrastructure for their web presence and provide periodically updated
content and services.
© The e-Volution II consortium
page 29/113
WP 1
System requirement specification
G1RD-CT-2002-00698
The market sectors, that seem to be the pioneers for electronic commerce adoption for the next
years are retailing, financial, mass media and mobile telephony.
Problems to the introduction of new ITCs and sectors in need of support
From the analysis of answers from enterprises to the problems faced in introducing new technologies, differences in prioritizing problems and deviations from the respective average rates for all
SMEs are mainly observed by possession of technology, i.e. between PC holders, non-holders and
holders of Internet connections. On the contrary, no significant differences are shown by size and
sector of enterprises.
The most significant problem to the introduction of new technologies for all enterprises was proved,
by 30% (27%), to be the problem of lack of knowledge and information. The deviation from this
percentage is shown by SMEs with Internet by 23%, while the respective percentage for non-holding
enterprises stood at 32%.
High cost is the second problem in row for 26% of all SMEs. This percentage stands at 21% for
Internet holding enterprises, and 28% for enterprises not holding computers.
Figure 3-19: Problems in the introduction of new technologies in enterprises
Β2Β e-Marketplaces in Greece
In Greece, certain electronic markets are currently activated. Some are horizontal (such as Business
Exchanges and CosmoOne) and some vertical, mainly focused in retail (OniaNet, Be4Retail) and
logistics (Yassas, e-Logistics).
At the same time, various new electronic markets have been created, mainly from concrete enterprising groups that cover mainly their own enterprising needs. Most from these activities are in quite
initial stages in order to they have presented certain results.
© The e-Volution II consortium
page 30/113
WP 1
System requirement specification
G1RD-CT-2002-00698
From the analysis of enterprising activities of existing horizontal electronic markets in Greece, it is
evident the following:


For the time being, their basic shareholders are also their main customers.
They rely on a major client, who is usually a big enterprise with income of million euros. This
client (mostly in horizontal markets) is the core in a scheme that resembles the extended enterprise (with his suppliers, which are mainly SMEs).
 The systems that have been developed are buyer-centric, while the offered auctions (auctions and reverse auctions) are in a lot of cases more effective than the classic b2b enterprising transactions.
As a general conclusion appears that the more essential difficulty of growth of electronic markets is
the creation and conservation of business communities. The use of horizontal electronic markets
from SMEs seems to be a very good perspective for both of them.
Electronic commerce policy making in the country
A number of government authorities and professional associations co-operate in order to implement
an effective strategy for the promotion of the information society and electronic commerce in the
country. A concentrated effort in this direction has started since 1996 with the participation of agents
such as the General Secretariat for Research and Technology of the Ministry of Development.
The result of those activities has been a continuous growth in the Greek market of electronic commerce. Some relevant indicators include the high percentage of mobile phone users, and the expression of interest from companies to use the Internet as a tool for gaining competitive advantage
or even setting up new virtual organizations according to international standards.
The government may play a critical role in the introduction and dissemination of the use of ITCs in
SMEs, with multiple effect resulting from:

the expansion and further improvement of provided electronic services of the State to citizens and SMEs
 increased information/ education and dissemination of use of ITCs in SMEs.
Those programs cover a vital need of SMEs, constitute the means to disseminate ITCs to SMEs and
contribute to their penetration into digital market, related to:



familiarization of SMEs with the Internet as a corporate tool (e-TRAIN)
e-business
the connection of SMEs to the Internet and their electronic presence (“Go Online”);
In 2002, 20% of SMEs were aware of the “Go Online” program, compared to 14% for 2001, i.e. the
percentage of awareness was increased by 43% compared to the first year of introduction. The rate
of interest in the program among SMEs being aware of it ranged, for 2002, at the same levels as in
2001 and more than half SMEs (54%) stated they were quite (16%) or very (38%) interested in the
program.
© The e-Volution II consortium
page 31/113
WP 1
System requirement specification
G1RD-CT-2002-00698
4 EXTENDED ENTERPRISE
4.1 Introduction
The term "Extended Enterprise" represents the concept that a company is made up not just of its
employees, its board members, and executives, but also by a functioning network of business partners, suppliers, and customers. The Extended Enterprise can only be successful if all of the member
groups and individuals have the information they need in order to do business effectively. Extended
Enterprise applications span company boundaries, including a web of relationships between the
company and its employees, managers, partners, customers, suppliers, and markets.
The co-ordination and management of this network often include third-party relationships maintained
on behalf of the client. In a knowledge-based economy, enterprises must not only strive to improve
their internal processes, but also need to manage this network efficiently and provide all members of
the network with exactly the information they need. ICT based applications play a major role in the
management of complex third party relationships. In the 1990s, e-mail caused a revolution in the
speed of communication. New applications have been developed to facilitate the co-operation
among businesses and the co-ordination of projects involving different partners. Several rather sophisticated e-business solutions and concepts such as EDI networks, Supply Chain Management
(SCM), and Internet trading platforms address these issues of an Extended Enterprise.
A prerequisite for online collaboration with business partners is the digitisation of information to be
exchanged between trading partners. Standards help in organising and exchanging information in a
way that is consistent across enterprises and IT systems. According to the European E-Business
Report 2003, 42% of employees work in companies that exchange documents electronically with
suppliers and customers. 12% of enterprises (accounting for 21% of employment) used online tools
for collaboration in designing products, and 10% to forecast product demand, which is most important for industries keeping a stock of produced goods.
© The e-Volution II consortium
page 32/113
WP 1
System requirement specification
G1RD-CT-2002-00698
4.2 Overview of European RTD projects on EE
I.
II.
Identification
Conception Requirements Design Implementation Operation
→ EEperformance
12,16,20
2
EEmanagement
3,12,16,
3,25,27
Overview EE EU Projects
InterOrganisational
→
III.
IV.
10
V.
VI.
18
17,18,36
18,26
5,7,11,13, 17,
20,24,35
18, 23,28,30,
31, 32,34
→ EE-legislation
Intra-
→ EE-culture
Organisational → EE-strategy
2, 12
12,16,20,24
4
2
→ EEBehaviour
4
→ EE-Finances
Description
→ EEinformation
flow
11,32
16
25
3
26,36
15, 23,29,30
31,34,36
Level
EE-Process
1,3,5,6,8,13,14,
16,20,24
22,25
9
9,36
→ and material
flow
1,6,7,19,21,
28,33,36
Table 4-1: Overview of European RTD projects on EE
© The e-Volution II consortium
page 33/113
page 33
VII.
Decommission
WP 1
System requirement specification
G1RD-CT-2002-00698
1. Co-operate
10. Contender
19. Damascos
28. Floci-EE
2. Bene-Bus
11. Free
20. External
29. Aitear
3. Business Architect
12. Smart-FM
21. LIAISE
30. Prodnet II
4. BEEP
13. Pikon
22. Chainfeed
31. Remote
5. Cebos
14. Aim
23. K-Flow
32. Whales
6. G1-MA-2000-02007 15. Burma-X
24. Globeman 21
33. India
7. TNEE
16. Ecosell
25. Mediat SME
34. Compete
8. Prominence
17. Prime
26. Bestcom
35. Expide
9. Smart Artisans
18. Texterm
27. Smart
36. Bridges
The x-axis is an enterprise engineering/ integration life cycle model based on the Generalised Enterprise Reference Architecture and Methodology (GERAM), which defines the phases of the EErealisation. The y-axis defines the factors which are important for the Extended Enterprise.
The projects chosen are from the forth, fifth and sixth Framework. In the table some projects may be
named several times because they where focusing on different levels. So does the e-volution project. The e-volution concentrates on the EE-performance, EE-management, EE-strategy, EEinformation and process/ material flow levels as well on the first four phases of the life-cycle (identification, conception, requirements and design). The summaries of the RTD projects are available in
the Annex.
4.3 EE definitions
While an exact definition is yet not agreed, it is clear that EE refers more or less to “an alliance of
enterprises which share competencies and resources to achieve a business goal, related to material
or immaterial products.” IT is a key enabler of this cooperation.
Alliance activity has increased significantly in recent years with businesses entering into alliances for
many reasons. For example, they can offer a capital-effective way to reduce costs, enable entry into
new markets and provide access to new customers or they allow to sum up different core competencies to bid on an RFP (e.g.: Modules Assembly). There are many forms of alliance including licensing, outsourcing, venturing, franchises, integrated supply chains and market facing alliances.
The result is an Extended Enterprise, with business critical activities often sitting outside what is
owned and controlled.
The fundamental feature of any alliance is that it is a relationship with an entity that you do not control, involving a greater level of collaboration, sharing and interdependence than a conventional
arm's length commercial relationship. Each party contributes resources to an alliance relationship,
both tangible and intangible. For example brand, technology, cash, content, databases, patents,
know-how, infrastructure. Such alliances offer many opportunities for companies, but they also present considerable risk.
Optimisation and Simulation will play an ever increasing role in the extended enterprise. While the
first implementations of extended enterprises mainly consisted in the exchange of data, the necessity to do collaborative planning soon required the adoption of computer aided planning, i.e. optimisation technology.
Currently, the trend in supply chain management is directed toward companies integrating their information systems to their suppliers and to their suppliers’ suppliers, as well as their downstream
partners.
The Extended Enterprise can be regarded as a kind of 'enterprise' which is represented by all those
organisations or parts of organisations, customers, suppliers and sub-contractors, who are engaged
collaboratively in the design, development, production and delivery of a product to an end user. This
includes both the supply chains and logistics chains. The Extended Enterprise allows individual
companies to work together to form inter-enterprise networking across the whole product value
chain. Although the real challenge of the Extended Enterprise is a management issue rather than a
© The e-Volution II consortium
page 34/113
WP 1
System requirement specification
G1RD-CT-2002-00698
technical one, the success of an Extended Enterprise is greatly determined by the speed and efficiency with which information can be exchanged and managed among business partners. The Extended Enterprise requires advanced information and telecommunication mechanisms in order to
support efficient collaborative engineering and production, such as the information super highway
now under construction by many countries.
As an Extended Enterprise the co-operated enterprises and organisations depend on each other,
their relationships are horizontal. In the same time the structure of the conventional enterprises are
not feasible for EE. From the horizontal point of view the control of Extended Enterprises can not be
hierarchical, but connected in equal consortium or similar collaborated organisations. The relation
between the members has to be firmed in a contract. Basically, the guidance of the Extended Enterprises is based on the contract which is accepted and signed by all members.
The duration of the existence of the EE shall be separated into short term, medium term, and long
term.
-
short term: duration limited on some months; the partners do not have a significant coordination
of vision, mission strategy, and culture;
-
medium term: duration reaches from several months up to some years; coordination of the business strategies between the partners;
-
long term: 5 years or longer; partners coordinate their different business strategies according to
the strategy of the EE
One of the most innovative concepts is the Extended Enterprise (EE) that is defined as a conceptual
business unit or system that consists of a leading company, suppliers and customers who collaborate closely in such a way as to improve the returns to each partner of the extended enterprise.
Product Complexity
High
Mass Production
Long Series
Medium Series
Small Series /
One-of-kind
Turnkey Systems
Complex Products
Extended Enterprises
Virtual Enterprise
Simple Products
Low
Materials
Figure 4-1: locate extended enterprise within manufacturing environments
The TNEE final definition: An Extended Enterprise (EE) is a long-term and permanent arrangement
in which an enterprise and its suppliers and partners are linked tightly together by information flows
to facilitate integration of knowledge, design, production and overall logistics.
New business models (such as e-business, virtual enterprises, extended enterprises, etc) that have
emerged in recent years are affecting the ways of doing business. Accordingly, European companies and workers are changing their way of working and a natural consequence is that IT systems
and tools are requested to adapt to these new trends and these tools provide a valuable support that
makes companies competitive in the new scenarios and help people in performing new tasks.
One of the most innovative concepts is the Extended Enterprise (EE) that is defined as a conceptual
business unit or system that consists of a leading company, suppliers and customers who collaborate closely in such a way as to improve the returns to each partner of the extended enterprise.
The discussions lead to the definition of the extended enterprise concept within Globeman21 as a
concept, which covers the totality of different concepts dealing with the expansion or extension of
enterprise activities. The extended enterprise is thus an overall concept or way of thinking, whereas
© The e-Volution II consortium
page 35/113
WP 1
System requirement specification
G1RD-CT-2002-00698
e.g. the virtual enterprise is a more concrete concept, which can be seen as a way of realising an
extended enterprise concept.
Extended Enterprise is the concept of manufacturing business operations that looks at all the participants in the manufacture of a product. The significance of the Extended Enterprise as distinct from
the conventional subcontracting relationship is in the extent of information flows that facilitate the
tightening of manufacturing design and production. The opportunities of using the specialist skills
and knowledge of the supplying partners in enhancing the design of the new products are immense.
The supplying partners own the processes and are at the forefront of their particular field of expertise.
The main focus in the extended enterprise is thus the creation of a network, integration between the
partners in the network or the value chain, and the sharing of information through the use of ICT
within the network. The concept seeks to exploit the opportunities made available by the development with the following areas:





Globalisation of markets and products
Use of ICT as a means of integration and communication
Change from delivering products to delivering solutions
Increased product life cycle coverage
Increased focus on business networks, alliances etc.
The extended enterprise consists of a network and the virtual enterprise is created from the network.
Shortly described what happens is that a network is formed based on the ideas from the extended
enterprise concept. The creation of the network is initiated by one enterprise, groups of enterprises
or a large customer, which can be seen as the product owner. When the conventional enterprises
assign core competencies to the network, preparedness for forming virtual enterprises to meet specific customer demands is established. When a customer demand meets the network, a virtual enterprise is formed based on the core competencies of the network and additional competencies from
sub-suppliers or local contractors. Once the virtual enterprise has created the product (or solution)
for the customer it is dissolved and the competencies and experience gained is transferred back to
the network and its participants.10
4.4 Description of project Extended Enterprise test cases
No. 1: German extended production enterprise test case
The German EE test case is from the production area in the office furniture sector. The two EE partners looked at are WINI as the dominating EE partner and its supplier Veyhl. Veyhl is only one alternative supplier for WINI, and WINI is only one customer of Veyhl. Both companies have been working together for years in a customer supplier b2b relationship.
The value chain
On the supplier side, WINI has several redundant suppliers that can be replaced one by another.
WINI purchases standard as well as WINI specific from European suppliers. Once a supplier was
chosen a framework contract is made that specifies the duration of the contract, the quantity delivered, the time frame, quality standards, etc. The number of suppliers WINI aims at closer b2b relationships is about 20. WINI’s customers are national and international specialised traders or directly
with the final customer in the scope of big office furnish projects. WINI is one Veyhl’s b2b customers.
WINI’s most important customers are specialised traders for office furniture followed by the end users with growing importance.
Veyhl supplies WINI with table frames made of metal. The Veyhl group itself is already an EE, as
there are temporal customer-supplier-relationships between the single production sites on the intraenterprise. Veyhl is always looking for an improvement of its customer-supplier relationships to defend and consolidate its market position by offering improved products and services. Veyhl has
about 3-4 main suppliers for the raw material. Supply is based on framework contracts; every half a
10
The project link list is available in the Annex.
© The e-Volution II consortium
page 36/113
WP 1
System requirement specification
G1RD-CT-2002-00698
year, there is a review and manual adjustment together with the suppliers. The solution aimed at by
WINI and Veyhl for improvement of the supply process is planned be assed for use by Veyhl for its
own sourcing process.
Figure 4-2: German test cases EE structure
For both companies it is a first step towards setting up an EE, which is different to traditional customer supplier relationships, and characterised by the following aspects:
–
specification, conception and implementation of b2b enterprise business process, functions, and
software application not only for company internal operations but for the supply chain;
–
extension of enterprise outwards to enable a better collaboration among business partners;
–
extension of information flows that facilitate the tightening and integration of production processes;
–
concentration on core-businesses of each EE partner;
–
implementation of enabling ICT.
In this constellation, WINI is the dominating EE partner who has the direct contact to final customer.
WINI takes the initiative for structuring and organising the EE according to its needs. The extension
of business processes means business process reengineering and integration which causes among
other things investments in organisation design and ICT. The process of main interest is the production planning and scheduling process in order to reduce stocks and delivery times and increase the
flexibility in production scheduling at WINI according to customer demands. Both partners are interested in a stable collaborative network.
The customer view with regard to e-business applications is of less relevance. Because of the products nature, customers want to see, touch and test it, anonymous e-commerce via the Internet
proofed to be not successfully in this industry. Nevertheless, pre- and after-sales service are offered
via the internet. Examples for pre-sales services are product information, brochures and helpdesk.
An after-sales service to be implemented is sales of replacement parts to the user.
Problems
WINI makes prognosis about single parts and components to purchase and negotiates with the suppliers about lot sizes, delivery times and costs. But these prognoses are only estimations, because
of a turbulent market, changing customer demands, growing product variety, and the trend towards
customised products. If an order is placed, WINI promises a delivery time of 3 weeks only. In case of
deviations between prognosis and real order volumes, WINI has to be very flexible. But the same
flexibility is expected by the suppliers, e.g. Veyhl, too. At the moment, delivery times for parts and
© The e-Volution II consortium
page 37/113
WP 1
System requirement specification
G1RD-CT-2002-00698
components are often longer than WINI’s delivery times. This means that WINI has to invest in
stocks. Because of economic reasons, WINI tries to reduce its stocks and follows the strategy of
sourcing A- and B-parts “made-to-order” and only C-parts “made-to-stock” as WINI follows internally
the “make-to-order” strategy too. Production planning and scheduling at WINI is done manually with
the support of an ERP-system.
Strategy, goals and expected benefits
The implementation of EE principles by both companies is regarded as the fist step towards the integration of further business partners into the company specific EE. Both test case companies plan
to extend the EE from their point of view in the future, if the pilot project shows the expected results.
The EE focus is clearly on the extension of inter-enterprise business processes. The motivation for
the EE is the increase of inter-enterprise process efficiency to be prepared for newly emerging customer demands. WINI already implemented flexible organisation structures that are able to answer
changing customer demands in a flexible manner. WINI expects the same flexibility by its suppliers.
WINI and Veyhl as a pilot case agreed to put primary focus of the extension on the inter-enterprise
business processes to optimise the process interfaces (material and information flow).
The aim of e-business implementation in this test case is improved Supply Chain Management
(SCM) that means the ICT based information exchange between b2b suppliers and customer for a
more order-oriented delivery of products, according to the changing demand at the customer. The
expected main benefits are:
–
improved information flow (data quality);
–
more efficient production scheduling between supplier and customer by implementation of new
scheduling procedures;
–
reduced transaction costs by (semi-)automated disposition;
–
lower stock of inventory at the supplier and customer side;
–
more flexible and improved delivery reliability of the supplier.
No. 2: Italian extended service enterprise test case
Graphicolor is a SME located in Rome and operating in the market of photographical service for professionals, companies and consumers. The company is strongly focused to match the service required by the customers, thus its commitment towards higher service level led the company to gain
updated technology for digital photo processing. Moreover, it has looked for complementary service
providers able to support a wide range of services to the final customer.
The EE around Graphicolor consists of long-term customers and other service providers rather than
traditional component suppliers. This makes it peculiar and challenging in terms of strategy and
problems against the traditional manufacturing extended enterprises. The reasons are:
 service and not tangible product,
 technology is not self-developed nor customised,
 the main materials are standard chemicals and papers, which are distributed by a few market
leaders (e.g. Kodak Italia) without information exchange with small customers.
Main players
The EE involving Graphicolor started in 1993 and changed the players along the time. It consists of
Graphicolor, Durst phototecnik, Plastifoto, L’Altro Studio and Vision.
 DURST PHOTECNIK is a technology developer, which provides Graphicolor with digital photo
processing machinery. In 1993, it started the development of a prototype and Graphicolor played
a significant role as trial tester. It took several months along which the information sharing between the two organisations was very strong. By the end of the R&D stage, Graphicolor gained a
break-through technology and advanced expertise, while Durst a patent, which now worth million
dollars and is spread worldwide. Its location is 600km from Graphicolor premise. Currently the re© The e-Volution II consortium
page 38/113
WP 1
System requirement specification
G1RD-CT-2002-00698
lationship is decreasing because of the fast dimension development of Durst, which now deals
with large companies.
 PLASTIFOTO is a complementary service provider, since it is able to add to the photo develop-
ment the plastic support for expositions. It strengthened the partnership with Graphicolor since
1998 with a strong focus on marketing and sale.
 L’ALTRO STUDIO is a complementary service provider and focuses its service on the printing
process involving not only photos, but also books, magazine, etc. It is not an actual member of
the EE, since it got to know Graphicolor since the involvement in e-volution. However, it matches
the features of the enterprise network and has started sharing information with Graphicolor willing
to foster the newly set up relationship.
 VISION is a long term customer. It is a photo agency, therefore it asks services to develop its
images and make complete product for its customers. For example to make a photo book, it asks
Graphicolor to print its images and then L’Altro Studio to assembly the printed photo into a book.
The value chain of Graphicolor
Service providers
1st tier customer
Plastifoto
Vision
L’Altro Studio
Final
Customers
Graphicolor
Durst
Figure 4-3: The value chain of Graphicolor
The extended enterprise develops value added products by providing a set of services able to match
the customer requirement. There is the need of a strong customisation and a relevant flexibility.
Therefore the process sequence is not predefined and the service request could be collected by
different players (since the have direct contact to the customer), which then forward the specific service request to the related provider. In this way, the company, while keeping a clear business focus
and independency, is able to address a wider range of requirements and increase the sale opportunity for the whole extended enterprise.
They started increasing the partnership 1998, (except for Durst), in order to improve reactivity to the
updating customer needs. It became even more important to Graphicolor, as the spread of digital
cameras and PC software became a big challenge for Graphicolor’s market. It allowed the consumers to process the photos without paying the service. This has decreased the set of potential customers and increased the average customer requirements.
The companies have searched in a closed partnership and a increased information sharing the way
to be competitive and face the challenge. In particular, Graphicolor and Plastifoto started an ongoing process of sharing price and delivery time of a set of well identified products in order to develop a list of service coming from the mix of the two companies. This partnership makes them able to
sell a wider range of services with clear information on the price and delivery time of the other company. Moreover this agreement sets same prices in different areas, thus enlarges the opportunities
of sale.
Strategy and goals for the future:
© The e-Volution II consortium
page 39/113
WP 1
System requirement specification
G1RD-CT-2002-00698
The dimension of the EE members and the business features lead EE to enhance the synergy of
their sale and marketing departments. Moreover, by exploiting all information available to the extended enterprise, they aim at updating the range of services in a shorter time and cope with the
market crisis (especially for Graphicolor).
Problems and benefits
The services are different and are affected in different ways by external events, thus the EE has to
cope with issues and priorities not shared by all the members, but very significant to one of them.
The complementariness of the service provided by the EE members added to the partnership consistent with EE concept shows to be a competitive advantage against the SMEs operating the market. Moreover, the continuous link with other companies supports the information availability and
allows a real time market monitoring, which makes even more effective the development of new
product mix.
No. 3: Italian extended production enterprise test case
EMEC is a 10 year old SME, based in northern Italy and its main product is machinery for ceramics
manufacturing. EMEC production is completely on demand and is able to provide the customer with
a high level of customisation. EMEC sells products to the ceramics industry at national and international level. Its business is clearly B2B and the location is a strong issue since it is based in the Italian ceramic district able to manufacture 80% of the national production. Therefore most of suppliers
(in numbers and quantity supplied) are close to it and have technical expertise for advanced product
development. Moreover, the revenue is strongly related to the trend of this specific market, which
leads EMEC to settle deals with foreign customers (especially in Europe). EMEC long presence in
the market and the strong commitment towards the innovation and continuous improvement led to
the build of a set of strong relationships with its suppliers and customers, which can be called an
extended enterprise.
Main players
At the moment, it consists of EMEC and three suppliers: G.M.M., PRAXAIR SURFACE
TECHNOLOGIES, ELETTRO QUALITY, ANSTALD, SIEGLING and 2 customers: RECORD and
BOTTOLI.
Most of them started a closer relation and upgraded information sharing since 1997.

GMM provides general components necessary for every product; therefore the amount of
supply is relevant, even if it can be substituted by other suppliers. This means that both became interested in fostering the relationships and making it more reliable and profitable. One
of the main evidence of the existing partnership is the sharing of the production plans and
agreement on price. Its location is 10km from EMEC plants.

ELETTRO provides electrical components and automation software specific to the single
sale. This builds a strong link between the two company’s product concepts. Its location is
10km from EMEC plants.
PRAXAIR releases an expensive service to EMEC components, which gain a valuable feature. Therefore new product development process is often shared as well as the production
plans. Its location is 300km from EMEC plants.
SIEGLING supplies components for EMEC products. Since it is a critical component, it has to
be designed and developed according to the customised features of the assembly; therefore
the design process is shared. Its location is 200 km from EMEC plant
ANSTAL is a company of mechanical designer professionals, which provides the technological expertise to design parts. This relationship started as soon as EMEC outsourced its technical resources. Currently the two organisations share information about design and development of new products. Its location is 10 km from EMEC plant
RECORD is a long-term customer, which manufactures ceramics special pieces. During
years, it relied upon EMEC to improve the capacity and the quality of the manufacturing
plants and co-developed a number of machines. Its location is 100km from EMEC plant




© The e-Volution II consortium
page 40/113
WP 1

System requirement specification
G1RD-CT-2002-00698
BOTTOLI is a peculiar customer for EMEC, since it operates the food market. However, it
started a good relationship, which lead EMEC to customise its technology (expertise and
products) to new requirements, other than ceramics one and supported it towards a new
market. Its location is 200 km from EMEC plant
The value chain of EMEC
Technology Expertise
customised
Parts
Manufacturing
process
Std
Parts
EMEC
Service
parts
GMM
on
PRAXAIR
Final Assembly
Final product for ceramics industry
(RECORD,
BOTTOLI)
Subassembly
ELETTRO
ANSTAL
SIEGLING
Figure 4-4: The value chain of EMEC
The products sold by EMEC have an added value on the basis of the components provided by the
suppliers, especially those involved in the EE. Moreover, the innovation developed by EMEC has to
be supported by updated supplied components. So the link among the companies is fostered by the
necessity to co-develop new ideas on a technological basis.
The companies keep their independence since the suppliers have many other customers, even in
the same geographical area. This is clearly due to the small dimension of EMEC and its turnover.
However, in this EE, EMEC plays a leading role since it is the final assembler and the front line towards the customer.
Strategy and goals for the future
According to the specific features of the business model, the technological innovation is the main
issue for almost all the EE members, thus it is clear that enhancing the synergy of their R&D departments becomes a strategy to be followed in order to keep their positioning and the competitive
advantages (e.g. quality of R&D and manufacturing). Moreover, an increased information sharing
about the market demand forecast and user needs could be a second issue to exploit the potentialities of the existing partnerships even on the marketing process.
Problems and benefits
The main problems faced by the EE are coordination in manufacturing and assembling, which affect
operational processes and are often due to the small dimension of the companies, which can not
supports the implementation of the Information Systems available on the market. However, they feel
the strong benefits coming from their partnerships especially in terms of flexibility to the customer
needs, which is possible and reliable only through the involvement of suppliers in product development and problem solving.
© The e-Volution II consortium
page 41/113
WP 1
System requirement specification
G1RD-CT-2002-00698
5 INDUSTRIAL REQUIREMENTS ON
METHODOLOGY CONCEPT
The aim of this summary is to provide the list of methodological and related functional requirements,
coming from the project test cases, additional project external cases studies, partner’s experiences,
questionnaire surveys and other sources. These requirements are the result of the analysis of the
current implementation process of e-business in selected Extended Enterprise constellations. The
following methodological requirements are a subset of identified problems, and hurdles in the realisation of Extended Enterprise concepts in practice. Requirements regarding e.g. cultural and behavioural aspects are only taken into consideration here as far as the effect the methodological concept
for e-business implementation in Extended Enterprises. This summary raises a set of issues on
which the users need to be guided by the methodology as they are mostly out of their usual competences and daily business. These are therefore a starting point for the e-volution methodology elaboration.
This requirement specification is the documentation of the results of the methodological requirement
analysis, which analysis the road mapping process for e-business implementation in extended enterprises and defines the general conditions and assumptions. It contains the technical and functional requirements for the methodology. Based on that, the functional specification of the methodology and its components is made in WP 2, which defines in detail how it is realised.
5.1 Methodology concept drivers
5.1.1 Methodology purpose
The general objectives and expectations placed on the e-volution methodology are:
− Consideration of the whole life cycle of the implementation of e-business in EEs, including the
identification and analysis of opportunities, requirements definition, detailed specification of eservices, implementation planning and management;
− Solution approach for the whole value-chain covering both business-to-business and business-toconsumer scenarios;
− The use of the methodology must be simple, efficient and the results traceable for different levels
in the EE, i.e. management, specialised technical staff, employees, etc.
− Easy to understand and apply to enable EE and its members to instantiate the methodology according to specific situation. The objective is to enable the user to run this process of e-business
road mapping by them selves without the explicit need of any external consultancy support.
− Branch-independent and flexible in its application, i.e. applicable in different branches under different conditions, for different business models and in different cultural environments.
− Knowledge and know-how, i.e. methods, tools and experiences, provision as basis for efficient
and effective (project) management activities and decision support for different levels.
− Ability to accommodate the existing organisation, processes, resources, the varying constraints
and the interfaces of the existing business architecture inside the EE.
− The road mapping process must be able to start at any of the life cycles phases.
5.1.2 Customer and user specification
The e-volution characteristics and peculiarities allow clearly identifying the typology of users addressed. In an EE and its partner enterprises, e-volution is expected to influence first of all the following areas: management and specialist departments (e.g. organisation development, business re/engineering, IT, marketing/sales). Having in mind the expected e-volution results, we see the need
to differentiate between the following types of persons we address:
© The e-Volution II consortium
page 42/113
WP 1
System requirement specification
G1RD-CT-2002-00698
The customer is person or organisation who pays for the product. Target customers of the eVolution results are the partners, European industry, multiplier (public and private associations,
management trainer), and business consultants. Multiplier and business consultants are expected to
transfer and apply the project results in industry, if industry is not willing or able to do it themselves.
With industry we mean preferably SMEs.
The user is the one someone who is finally using the product. Target users are managers, specialist
and experts in a certain area, e.g. IT, management trainer and business consultants.
5.1.3 Context of the work
The work context diagram defines the issues needed to take into consideration for methodology development. The work context diagram roughly describes the application field for the methodology.
Consequently, the methodology has to cover all these contexts.
Global EE
environment
Politics
Economy
Society
RTD
Law
Technology
Market
Competitor
EE specific
environment
Customer
Supplier
Service
provider
Extended
Enterprise
Supplier
My
enterprise
Products &
services
Customer
Figure 5-1: Work context diagram
5.2 Systematisation of industrial requirements on methodology concept
One of the core findings of the requirement analysis is the need for formalisation of the road mapping for e-business implementation in Extended Enterprises in order to reduce the complexity of this
process for the user. The e-business road mapping is a MANAGEMENT PROCESS. The result of
running that management process is the e-business road map. This e-business road map has to be
the basis for e-business implementation in Extended Enterprises. Management processes enable
value-creating processes (CORE PROCESSES). Beside the management and core processes there
are SUPPORT PROCESSES necessary and supporting the value creation in the core processes.
Following common state-of-the-art life cycle models, the e-business life cycle spans the idea, conception, requirement definition, design, implementation and replacement of e-business11. The ebusiness road mapping management process is part of the e-business life cycle but does not cover
the whole life cycle.
The e-volution methodology will apply a phased process for e-business implementation in Extended
Enterprises. The phase is an abstraction of the management activities, which must be further detailed. Horizontal separation and vertical/horizontal detailing of the methodology phases is the way
of formalising the management process. The e-business road mapping management process spans
the following phases:
11
Identified related models in this context are e.g. the Generalised Enterprise Reference Architecture and
Methodologies Framework (GERAM) /IFIP/IFAC Task Force (1997), GERAM: Generalised Enterprise Reference Architecture and Methodology, Version 1.5, 1997-09-27./, the DYNAPRO intertwined project management approach for implementation of fractal organisation structures /Hartmann, M. (Edt.): DYNAPRO II: Erfolgreich produzieren in turbulenten Märkten. Logis Verlag. 1997./, the Computer Integrated Manufacturing Open
System Architecture (CIMOSA) /CIMOSA Association e.V.: http://www.cimosa.de/, and generic software life
cycle models.
© The e-Volution II consortium
page 43/113
WP 1
System requirement specification
G1RD-CT-2002-00698
1. Identification of the EE business purpose;
2. Conception of the EE business;
Phases 1-2 define the strategy phases. The result of running phases 1-2 is the road map for ebusiness implementation in Extended Enterprises as a milestone in the e-/business re-/engineering
process.
But the road map can prove its correctness only after implementation. And the benefit for the user is
only generated after successful implementation of the road map. That’s why the e-volution methodology has to include 3 more phases.
3. Requirement analysis for the EE business architecture;
4. Design of the EE business architecture;
5. Implementation of the EE business architecture
The phases 3-5 are of special interest for the methodology concept in terms of road map realisation
monitoring and controlling. Beside this, the e-volution methodology is expected to provide support
for the requirement definition and design of the EE business architecture. This has to focus on the
business process architecture as well as the ICT-architecture inside the EE. The special focus has
to be on SME users and their demands for practicable solutions.
The e-volution project deliberately bases on commonly accepted models and concepts to increase
the acceptance of the project approach. In the following, the requirement specification is provided for
each phase of the methodological approach. The aim is to describe the methodological requirements arisen from the cases study analyses in the target user group.
In the tables below not all users’ requirements have been collapsed in methodological requirements
because some of them could not be satisfied by e-volution, other methodological requirements are
implicit requirements.
The requirement specification DOES NOT INCLUDE already the functional and non-functional specification definitions, which are developed in WP 2 of the e-volution project, based on WP 1 requirements.
5.2.1 Identification phase
Description
Identification of the EE business purpose is set of activities that identify the contents of the particular
EE under consideration in terms of its boundaries and its relation to its internal and external environments. These activities include the identification of the existence and nature of needs for the EE.
The main task of this phase is to understand and specify the purpose of the EE business and the EE
benefit for each partner. By the end of the analysis phase the managers have to agree on the common business model and partner’s benefits. The methodology has to assure that the selected solutions contribute to the realisation of the organisation’s business objectives and realises certain benefits for the EE partners.
The identified methodological requirements for the identification phase are the following:
5.2.1.1 Mission statement for the EE
Overview
Description
The development of the EE mission aims at creating a common understanding about
the EE purpose and market positioning among the EE partners. The EE mission has
to define the EE identity in a concise and clear manner. An outstanding person has to
get a vivid picture of what is unique about the organisation. Every program and activity in the organisation should tie to the mission.
Identified requirements regarding the methodical approach are:
 common working-out and agreement about the EE purpose (e.g.: customer, product/service, market, technology, employee, and image) by the EE partners as
framework for common business activities.
 Recommended mission statement components:
© The e-Volution II consortium
page 44/113
WP 1
Criticalities
risks
System requirement specification
and
G1RD-CT-2002-00698
− Customers and target market;
− Products and services provided to customers;
− Geographic markets where the organisation seeks customers;
− Specification of technological acumen;
− Organisation philosophy (specify values, ethics, beliefs);
− Public image based on contributions made to community;
− Employees’ role;
− Distinctive competences;
 Formulation and documentation of EE mission for later communication (internally
and to the EE environment)
 support could be given by the help of mission statement examples
A common workshop is a proven and accepted platform for mission statement development; workshop members are managers; moderation by nominated person (internal or external consultant)
 In practice an EE constellation is often lead by one partner. The other partners are
just followers which restricts their influence on the EE mission definition.
 The definition of EE mission is especially necessary for mid- and long term EE
constellations and for communication towards business partners and customers.
5.2.1.2 Business idea formulation for the EE
Overview
Description
Criticalities
risks
and
At the beginning of e-business implementation there has to be a business idea that
specifies the e-business application field and users. The business idea has to be part
of the business model.
Identified requirements regarding the methodical approach are:
 discussion, formulation and documentation of business idea on the EE level;
 identification of new business opportunities resulting from the EE for the single
enterprises;
 identification, agreement and documentation of the expected business benefits for
each partner as motivation for EE membership;
A common brainstorming workshop is a proven and accepted platform for business
idea formulation; workshop members are managers, supported by experts from specialist departments or consultants if necessary; moderation by nominated person (internal person or external consultant)
 A single partner’s interest might dominate the others partners.
 Even if it a qualitative description of the EE business idea, it has to be sharp and
agreed by all EE partners as the basis for collaborative work.
 Missing value chain focus, thinking in entities, and partners’ low interest towards
transparency of their business limits the EE.
 If there is no consensus about the business ideas and mutual benefits there is no
basis for a winning business partnership.
 Closed session of only some EE partners.
 Experience in managing collaborative projects.
5.2.1.3 Business model formalisation for the EE
Overview
Description
Criticalities
and
The business model, synonym for qualitative business model, has to define the basic
exchange processes along the whole EE value chain. The business model has to be
the basis for any e-business implementation, form the business management but also
from the ICT point of view.
Identified requirements regarding the methodical approach are:
 Development of a qualitative EE business model and agreement by the EE partners based on
− Already formalised business idea;
− definition of EE actors and of actors’ specific role in the EE;
− value (products and services for the customer), revenue and logistic (material
and information flow) stream specification;
 EE positioning in the competitive environment;
Common workshop session(s) can provide platform for business model development
and formalisation and documentation; workshop members are managers, supported
by experts from specialist departments or consultants if necessary; moderation by
nominated person (internal person or external consultant)
 The business model formulation and classification is a creative process. There is
© The e-Volution II consortium
page 45/113
WP 1
System requirement specification
risks
G1RD-CT-2002-00698
no formal procedure.
 Different points of view must be coordinated. Even if it a qualitative description of
the EE business model, it has to be concrete and agreed by all partners.
 If there is no consensus about the business ideas and mutual benefits there is no
basis for a business partnership
 If too much attention is paid to daily business, no future oriented concept can be
developed.
 The business model does not provide quantitative data of how it contributes to the
realisation of the actor’s business goals.
 A missing value chain view limits the development of real business potentials.
5.2.1.4 Business value model development for the EE
Overview
Description
Criticalities
risks
and
The business value model is an advancement of the business model in order to close
the gap between the informal, business management perspective and the ITperspective. The aim is to describe the value flow along the value chain.
Identified requirements regarding the methodical approach are:
 Development of the EE business value model
− Definition of actors inside the EE value chain or part of the value chain;
− Definition of value creating and supporting activities;
− Definition of in-/output for the value creating activities;
− Definition if value chain interfaces among the EE partners;
The business value model must be developed in a collaborative manner among the
EE partners, represented by the management, experts and knowledge-holder from
specialist departments and if needed by consultants. Moderated workshop meetings
are accepted platforms. Instruments and tools may be used on demand.
 The business value model development is a creative process. Different points of
view must be coordinated. If there is no consensus about the business value
model ideas there is no basis for a business partnership. There is no formal procedure.
 Only the integration of business managers, process and IT experts will result in a
consistent value model.
Expected results and benefits of the identification phase
The concrete benefit of the identification phase is that after some expert workshops with the management, specialist departments, and perhaps consultants, the basis for further quantitative and
resource consuming analyses is laid.
5.2.2 Conception phase
Description
Conception is the set of activities that are needed to develop the EE concept. These concepts include the definition of the EE’s mission, vision, values, strategies, objectives, operational concepts,
policies, etc. The business objectives are determined and systematised. A key characteristic of the
e-volution methodology has to be the goal orientation of the concept. This approach guarantees to
focus the required investments to the most beneficial improvement opportunities to support the
achievement of the actual business objectives and enable the controlling of the result assessment.
Conception is the assessment of business opportunities and threats, with special emphasis on the
target markets, products and competitors. The main tasks are primarily oriented to introduce improvements in the b2b and b2c business relations of the EE partners. In this scope value adding ebusiness services (e-services) have to be identified. A further essential point is the identification of
new market opportunities for the EE and its partners.
By the end of the conception phase the managers should have acquired the necessary information
to decide about the implementation of a particular solution concept. One possible result of this
phase is the convincement of the project team that there is no solution worth to be implemented. In
this scenario, the following phases of the methodology won’t be implemented.
The identified methodological requirements for the conception phase are the following:
© The e-Volution II consortium
page 46/113
WP 1
System requirement specification
G1RD-CT-2002-00698
5.2.2.1 Definition of EE business goals
Overview
Description
Criticalities
risks
and
Goals are derived from the enterprise mission. Goals are essential for the management of teams, departments, companies and business collaborations like e.g. an EE.
There are different kinds of goals and goals can influence or exclude each other. In
this connection we are speaking about goal structures and goal systems. A common
approach for goal differentiation is the clustering of goals into strategic goals with
long-term validity, tactical goals with mid-term validity and operative goals with shortterm validity.
Identified requirements regarding the methodical approach are:
 On the partner level:
− Individual generation of corporate goals by business partners (based on expected EE benefits);
− Individual quantification (goal measures, targets) and clustering of goals, e.g.:
 time, cost, quality, flexibility, ecology, sociability perspective
 BSC-standard structure: business process, customer, financial and human
perspective
 On the EE level:
− Centralised generation of EE goals;
− centralised collection of individual EE related goals from the collaborative environment;
− Centralised EE goal systematisation;
− Centralised identification of EE goal interactions (influence, exclusion);
 On the partner level:
− Individual extraction of e-business related business goals as subset of corporate goals;
− Assignment of goals to business processes to identify process priority;
− Development of a consistent goal hierarchy on the EE level to avoid goal conflicts;
− Transfer of business goals into a BSC or similar instrument for business and ebusiness project, monitoring and controlling purposes;
 On the EE level:
− Assignment of goals to business processes to identify process priority;
− Development of a consistent goal hierarchy down to the shop flow level to
avoid goal conflicts;
− Transfer of business goals into a BSC or similar instrument for EE business
and e-business project, monitoring and controlling purposes;
 Goals must be developed in collaboration of management and work flow level in a
combined top-down-bottom-up approach by the use of creativity techniques,
 On the EE level, business goals are subject of arrangements on the management
level;
Common workshop session(s) can provide a platform for inter-enterprise goal definition. The goal definition should be moderated by nominated person (internal person
or external consultant). Instruments and tools are expected to support the goal definition process.
 Inconsistent enterprise goals;
 Incompatible goals inside the EE because of individual business strategies;
 Confidentiality of enterprise’ business goals and strategies;
 Leading EE partner defines the business rules for the followers
5.2.2.2 Opportunities and threats (OT) analysis for the EE
Overview
Description
The opportunity and threat analysis is based on the concept of strategic early recognition. Early recognition is integrated in the strategic management. It is a systematic
process for getting and processing information and it is used for early data collection
of environmental changes, which threat or support current and future potentials. It
aims at the guarantee of sufficient reaction time for developing or implementing
adapted strategies.
Identified requirements regarding the methodical approach are:
 methodical approach identification of trends and weak signals in e.g. society/politics, RTD, market and analysis and assessment of their impact on the EE
business to develop a future-oriented business plan.
− definition of business relevant search criteria for trends/weak signals in the EE
© The e-Volution II consortium
page 47/113
WP 1
Criticalities
risks
System requirement specification
and
G1RD-CT-2002-00698
environment;
− finding trends/weak signals with the help of the search criteria, elimination of
redundancies, structuring and clustering;
− filtering trends/weak signals: interpretation of identified trends/weak signals;
assessment of their relevance for the EE business and impact (opportunity or
threat); formulation of strategic actions;
− formatting trends/weak signals: identification of impact factors for triggering actions and development of an impact-effect-network;
− focussing trends/weak signals: monitoring of developments in the environment
based on defined monitoring criteria
 Identification of key opportunities and strengths trough a collaborative and/or individual audit;
Common trend workshop as platform and sequential approach; workshop members
are managers, supported by experts from specialist departments or consultants if
necessary, customers; moderation by nominated person (internal person or external
consultant)
 Information availability about the future business
 environment for the trend workshop (participants, agenda)
 methodical know-how about supporting methods and instruments
 abilities to abstraction and for visionary thinking of workshop participants
 lack of expert and methodological knowledge in the organisation
 trends are difficult to identify and assess and of insecure character
5.2.2.3 Strength and weakness (SW) analysis for the EE
Overview
Description
Criticalities
risks
and
The aim of the strength and weakness analysis is the identification of current individual strengths and weaknesses of an enterprise, here the EE, in comparison with the
average branch representative or a certain competitor; and in the next step, to define
activities to improve the current situation. Strength analysis has to be from the internal (business partner, employee point of view) and external perspective (external
customer, competitor point of view). Weakness analysis has to be from own and customer point of view. Strengths and weaknesses are a major part of the strategic market knowledge. The SW-analysis is first of all a subjective (qualitative) analysis and a
basis for strategic planning. Objectivity can be realised by use of results from quantitative analysis which are used for assessment of won strengths and weaknesses.
Identified requirements regarding the methodical approach are:
 core competence analysis on the individual partner level;
 analysis of critical and main success factors on the partner level;
 aggregation of critical and main success factors on the EE level;
 merging of core competences for EE performance (USP) definition;
 value chain (core, supporting, or management processes) focussed SW-analysis,
based on to be defined or selected assessment criteria
− Value creating (core) processes: operation, marketing/sales, service
− Supporting processes: procurement, RTD, HR, logistics
− Management (infrastructure) processes: planning, finances, management,
quality management, finances, HRM, communication, collaboration
 Identification of key strengths and weaknesses trough a collaborative and/or individual audit;
 Visualisation and documentation of strengths and weaknesses on EE and partner
level
Workshops are means for the subjective, collective SW-assessment. Interdisciplinary teams, representing certain know-how, knowledge and skills are necessary for realistic SW analysis. Instruments and tools are expected to support the SW
systematisation and assessment process.
 Honesty, objectivity and self-criticism in the assessment process
 Subjectivity of the assessment procedure and reliability of the results
5.2.2.4 Quantitative analysis of the EE business and business environment
Overview
In order to justify the assessment of mainly strengths and weaknesses but also opportunities and threats, quantitative analyses are needed as basis for making the
assessment or for confirmation of the assessment. Quantitative analyses reduce the
uncertainty of subjective assessment approaches. Quantitative analyses are in gen-
© The e-Volution II consortium
page 48/113
WP 1
System requirement specification
Description
Criticalities
risks
and
G1RD-CT-2002-00698
eral retrospective or real-time by its nature and depend from the availability of high
quality historical or up-to-date data and information. The quality of quantitative predictions depends from the general availability of relevant data and information, the information and data quality, and from the sued prediction method. All kinds of predictions are risky by its nature.
Identified requirements regarding the methodical approach are:
 Goal-oriented, no general approach for resource consuming quantitative analyses.
 Differentiation of general analysis fields and optional analyses:
− enterprise structure (organisation, business processes, resources) with the focus on the e-business architecture (systems, software, competences, eservices);
− products and service with the focus on their e-commerce suitability;
− value chain (suppliers, business partners, customers) with the focus on their ebusiness architecture (systems, software, competences, e-services);
− market conditions with the focus on the market needs for e-business;
− competitors with the focus on their e-business architecture (systems, software,
competences, e-services);
− enterprise environment: politics, society, laws, ecology, culture, technology,
economy and their impact on the enterprise business;
 Depending from the business model and business goals, case specific analyses
can be made in connection with the SW and OT-analyses criteria.
 A set of standard analyses for the general analysis fields has to be defined and
supported with dedicated methods and tools. The
 The approach has to be open for case specific set of analyses.
 Guidelines and support for collection of additional data and information, not available yet.
The qualitative analysis is the job of knowledge holders and experts. The results must
be verified and further processed by the decision makers on the management level.
Inter-disciplinary information exchange is necessary to handle the task complexity.
Instruments and tools are expected to support or enable qualitative analyses.
 Quality of quantitative analysis depends from data availability and quality
 lack of expert and methodological knowledge
 lack of resources for detailed analysis
 trends are difficult to quantify because of its insecure, non quantitative nature
 predictions only based on historical data are risky because of dynamic evolution
and uncertainty in enterprise environment
 bad data quality hinders the beneficial use of data and analysis results
 Information needed for strategic decisions are mostly not available in operative IT
systems or owned by humans
5.2.2.5 E-business strategy development (road mapping) for the EE
Overview
Description
The obvious input to any e-business implementation is a well-developed e-business
strategy, i.e. every enterprise needs an e-business strategy. The e-business strategy
spawns several initiatives, each of which requires several e-business projects to fully
implement. The e-business strategy is integrated element of the corporate business
model and strategy.
The e-business strategy is the driving force behind the development of the e-business
roadmap. The roadmap addresses the business processes and applications of greatest value to the company‘s business and details a series of initiatives and projects to
achieve the business results defined by the strategy.
SWOT is the matching of external and internal factors, which creates a strategic matrix. It is an assessment and combination of external and internal factors from the
retrospective and foresighted point of view.
Identified requirements regarding the methodical approach are:
 SWOT-analysis as the starting point to devise possible e-business strategies
− Merging of results from strengths and weakness with results from opportunity
threat analysis to S/O, S/T, W/O, W/T combinations;
 development alternative e-business strategies for the EE and its members:
− Linkage of business goals with related S/O, S/T, W/O, W/T combinations;
− definition of measures to fulfil goals, i.e. maximise strengths to capitalise on
new opportunities (S/O combination); use strengths to parry or minimise
© The e-Volution II consortium
page 49/113
WP 1
Criticalities
risks
System requirement specification
and
G1RD-CT-2002-00698
threats (S/T combination); conquer weaknesses by exploiting opportunities
(W/O combination); minimise weaknesses and avoiding threats (W/T combination);
 assessment of e-business strategies;
− evaluation of alternative e-business strategies, e.g. qualitative and quantitative
scoring, risk and sensitivity analysis, discounted cash-flow methods;
− identification of threshold values for e-business strategies and the probability
for realisation of target goals;
 selection of preference e-business strategy;
 e-business plan development:
− Development of a goal, budget, financial and measure statement to implement
the e-business strategy, as a milestone for management decision and future
operational guideline;
− Alignment of e-business strategy corporate strategy;
− Description of each e-business project in terms of its objectives, required resources, and typical inputs and outputs;
− identification of possible IT-solutions (application portfolio) for realisation of the
e-business strategy;
− analysis of how and when to engage external service providers to complement
internal skills;
− definition of an architecture that provides the infrastructure, environment for the
application development, and maintenance services, necessary for support of
the e-business application portfolio;
− development of a tactical plan for application and architecture implementation.
 Communication of the e-business strategy inside the EE, inside the enterprises
and to business partners
− Development of the e-business road map
The strategy development is the job of the management, in collaboration with the
knowledge holders and experts. Inter-disciplinary and inter-enterprise information
exchange is necessary to handle the task complexity. Instruments and tools are expected to support the strategy development.
 iterative, creative development process
 direct dependency from quality of previous tasks
 assignment of costs to the EE partners and agreements on revenue flow among
the EE partners
 Creative process that depends from humans
 periodical review of the business plan to keep it up-to-dated
 legal independence of EE partners and resulting individual strategies
 Environmental dynamics may cause the need for an update of the strategy, earlier
than originally planned, due to e.g. innovations.
Expected results and benefits of the conception phase
The concrete benefit of the conception phase is that the chances for successful e-business implementation are increased because of a well-funded and proofed business concept. The clear goals
definitions and the focussing on critical e-business processes increase the project and process efficiency.
5.2.3 Interim summary and next steps
The expected benefits of developing a new methodology for running the identification and conception phase of the e-business life cycle are:
− Facilitating the discussion and conceptual work among business partners, managers, experts and
employees;
− obtaining commitment to common goals and strategies inside the EE, taking into consideration
individual goals and strategies;
− Provision of a more systematic approach for e-business under time and resource constraints in
SMEs;
− Anticipation of current strengths and weaknesses, merged with future opportunities and threats;
© The e-Volution II consortium
page 50/113
WP 1
System requirement specification
G1RD-CT-2002-00698
− Encouragement of forward thinking;
− Creation of transparency and favourable attitude towards organisational changes;
− Development of tactics to implement e-business strategies;
− Implied warrantee that strategic planning is a complex task.
For completeness reasons, the methodological requirements for the requirement analysis, the design and the implementation phase are summarised in the following although these are phases
AFTER the development of the e-business strategy and road map to be implemented in Extended
Enterprises. The e-business strategy and belonging roadmap laid the basis for three processes:
1. The core process: Realisation of the IT-architecture in the Extended Enterprise, i.e. requirement
analysis, design and implementation of hardware and software systems. These are NOT the project objectives of the e-volution project.
2. The supporting process: The requirement analysis and design activities are the enabler for implementation of e-business (hardware and software). E-volution identified basic requirements for
a successful running of these support processes. This is a beneficial BY-PRODUCT of the evolution project.
3. The management process: Monitoring and controlling of the requirement analysis, design and
implementation process according to the defined business and project goals from the e-business
strategy and road map. This is a beneficial BY-PRODUCT of the e-volution project approach.
5.2.4 Requirement analysis phase
Description
Requirement analysis is the set of activities to develop descriptions of operational requirements of
the EE, its relevant processes and the collection of all their functional, behavioural, informational and
capability needs. The requirement analysis has to be a holistic approach focussing on EE organisation (structure and responsibilities), processes (activities, in-/outputs) and resources (ICTarchitecture, staff, material). By business architecture we mean the business process and ITCarchitecture. Requirement analysis is the identification of the organisational strengths and weaknesses in reference to the business objectives, with special emphasis on the organisation, processes and resources associated with the relationship with suppliers, business partners and consumers.
It includes the identification of the potential e-services which contribute to the elimination of weaknesses and strengthening of strengths and add value to any of the EE nodes. Heart of the requirement analysis is the business process to identify starting points for the business process optimisation. These potentials might be the result of the current process structures (e.g. bad managed organisation and system interfaces, redundant or not value-creating activities) and identified by process key figures.
The identified methodological requirements for the requirement analysis phase are the following:
5.2.4.1 EE business process modelling
Overview
Description
Process modelling allows the representation of operation of enterprise entities and
entity types in all their aspects: functional, behaviour, information, resources and organisation. A business process model is a conceptual representation of a business
process as seen from several perspectives, the ones needed to represent the business process adequately for a given purpose. The main purposes of business process modelling are twofold, although overlapping: (1) to support the management of
the business processes and (2) to support their design and implementation. The first
purpose involves the documentation facet of modelling. The second purpose has to
do with the (re)design of business processes, supporting people in the enterprise in
setting up new or re-defined business processes more efficiently.
Identified requirements regarding an advanced methodical approach are:
 Definition of core, supporting and management processes in the EE based on the
business value model;
 Development of the “as-is” business process landscape for the EE (end-to-end);
© The e-Volution II consortium
page 51/113
WP 1
Criticalities
risks
System requirement specification
and
G1RD-CT-2002-00698
 Static and dynamic business descriptions;
 Development, i.e. stepwise instantiation, of “as-is” business object model (model
views: organisation, processes, resources, utilities) as advancement of the business value model (identification of business objects and analysis of relationships
between business objects)
 Non-systematic approach for process modelling;
 Bad project planning (objective, scope, detailing, conventions, resources and efforts, iterations for validation);
 Model quality (completeness, consistency, detailing);
 data availability and quality (attributes of model elements);
 Use of convergent engineering methods for holistic modelling approach;
 EE process interfaces and system heterogeneity and incompatibility regarding
modelling tools
 Top-down OR bottom-up instead of AND approach;
 Different perspectives and process knowledge of involved persons;
 inter-enterprise partner collaboration
5.2.4.2 EE business process analysis
Overview
Description
Criticalities
risks
and
Process analysis is the analysis of the business process model under certain aspects
in order to identify the reasons for process in-efficiencies and failures.
Identified requirements regarding an advanced methodical approach are:
 End-to-end analysis along the value chain;
 Inter-enterprise analysis of business process models according to business goals
from the organisational, work and information flow, ICT perspective;
− identification of weak points;
− Definition of business process potentials;
− identification and assessment of action alternatives
 model quality (completeness, consistency, detailing);
 data availability and quality (attributes of model elements);
 inter-enterprise partner collaboration
5.2.4.3 EE business model requirement specification
Overview
Description
Criticalities
risks
and
The requirement specification is the results of the process analysis and the basis for
the solution specification, done in following the design phase.
Identified requirements regarding an advanced methodical approach are:
 Specification of functional requirements regarding;
− Business process architecture (organisation, work and information flow, resource)
− ICT-architecture (software and system);
 Specification of non-functional requirements as the behavioural properties that the
specified functions must have and assignment of a specific measurement;
− Business process architecture (organisation, work and information flow, resource)
− ICT-architecture (software and system);
 Definition of constraints how the “to-be” process must fit into the EE value chain;
 Specification of drivers as the business-related forces;
 Specification of issues under which a re-engineering project is done
 fuzzy requirement specifications;
 missing system view (organisation, process, resources);
 little target user focus (business model for managers, IT-architecture for ITexperts);
 inter-enterprise partner collaboration
Expected results and benefits of the requirement analysis phase
The expected main results of the requirement analysis phase are qualitative/structural and quantitative process analyses for, i.e. transparency about business processes; common understanding
among EE partners about weak points; identification of potentials as results of organisation assessment (e.g. redundant or no responsibilities, “Taylorism” instead of congruence principle, complicate
work flows); ICT-architecture assessment (e.g. system (software and hardware) heterogeneity, sys© The e-Volution II consortium
page 52/113
WP 1
System requirement specification
G1RD-CT-2002-00698
tem interfaces); Human resource assessment (e.g. IT-know-how); time, cost, quality and risk analyses.
5.2.5 Design phase
Description
Design is the set of activities that make the EE specification with all of its components that satisfy
the EE business process and ICT-architecture requirements. The scope of design activities includes
the design of the organisation, processes and resources concerned with the EE’s customer services
and products and the related management and control functions. The design has to be a holistic
approach focussing on EE organisation (structure and responsibilities), processes (activities, in/outputs) and resources (ICT-architecture, staff, material). By business architecture we mean the
business process and ITC-architecture. Design may be subdivided into overall EE functional design/specification and detailed design/specification work for the final physical EE system.
The design is the detailed specification of the business process and ICT-architecture. One task of
this phase has to be the detailed specification of the identified e-services. This includes the definition
of the software and system as well as business process architecture to be implemented. Finally, a
detailed implementation plan is developed. This includes the selection of the best offer and is concluded with the signature of the contract with the software vendor(s).
In this phase the definition of the implementation concept has to be done, of course based on a Return on Investment Analysis (ROI). The investment, operational costs and expected benefits are
estimated. The rough implementation plan is defined.
The identified methodological requirements for the design phase are the following:
5.2.5.1 EE business process architecture design specification
Overview
Description
Criticalities
risks
and
The business process architecture design has to develop an integrated solution for
the re-engineering of existing organisation and business process towards an ebusiness-enabled organisation and processes. The requirements specification is validated and transferred into an organisation and business process concept.
Identified requirements regarding an advanced methodical approach are:
 Identification of business process related business objects;
 Analysis of relationships between business objects;
 Development of a business object model;
 Definition of business re-engineering measures;
 Integration of process owners and knowledge holders;
 In-house business re-engineering know-how, dependencies from consultants;
 Insufficient or misinterpretation of non-/functional business requirement specifications;
 Incompatible EE partner organisations, processes and cultures
5.2.5.2 EE ICT-architecture design specification
Overview
Description
Criticalities
risks
and
Based on the business object model specification and the system architecture requirement specification the software and system architecture is designed.
Identified requirements regarding an advanced methodical approach are:
 Decomposition of the business object model technical components;
 Definition of the technical infrastructure;
 Merging of system and software architecture to ICT-architecture;
 Separation of business and ICT-architecture design;
 In-house IT-know how, dependencies from consultants;
 Insufficient or misinterpretation of non-/functional technical requirement definitions;
 Different EE partners’ ICT-architectures and e-business status;
 inter-enterprise partner collaboration
5.2.5.3 Implementation plan development
Overview
Based on the business process and ICT-architecture design, a common implementa-
© The e-Volution II consortium
page 53/113
WP 1
System requirement specification
Description
Criticalities
risks
and
G1RD-CT-2002-00698
tion plan is developed.
Identified requirements regarding an advanced methodical approach are:
 Implementation risk analysis;
 Make / buy / reuse decision making;
 supplier/vendor identification, assessment, selection;
 supplier/vendor/consultant contracting;
 implementation project planning (goals, time, costs, resources)
 inter-enterprise project planning;
 resources (time, budget);
 partner heterogeneity
Expected results and benefits of the design phase
The quality of the design activities is the basis for successful implementation and operation of business process and ICT-architecture in the EE. The expected benefits of the design phase are specification and assessment of benefits; management decision based on cost-benefit-ROI-assessments;
and finally the common implementation agreement.
5.2.6 Implementation phase
Description
The implementation follows the detailed implementation plan defined in the design phase. Implementation is the set of activities that define all those tasks that must be carried out to build or rebuild the EE. This comprises implementation in the broadest sense, covering: a) organisational aspects, e.g. hiring and training personnel, developing or changing the EE organisation; b) process
aspects, e.g. re-engineering of business processes and work flow re-design; c) resource aspects: IT
hardware and software redesign, its testing, validation and integration. It includes the development,
integration, verification, quality, logistics, marketing, organisational change and training aspects.
The e-volution methodology is expected to provide support especially in the controlling of the implementation process. The case specific implementation of the EE business processes and ICTarchitecture process is running in parallel to the monitoring/controlling process.
The identified methodological requirements for the implementation phase are the following:
5.2.6.1 Implementation management
Overview
Description
Criticalities
risks
and
Implementation is the realisation of the e-business strategy and roadmap. Here, the
implementation is looked at from the project management point of view, not from the
technical point of view.
Identified requirements regarding an advanced methodical approach are:
 Project management (monitoring, controlling, exception handling) based on BSC;
 Technical problems (ICT);
 Cultural problems (organisational change process);
 Resource problems (time, budget, qualification and know-how);
 Management and coordination of EE partner activities
Expected results and benefits of the implementation phase
The aim of the implementation phase is the realisation of the “to-be” business processes and the
supporting ICT-architecture in the organisation. ICT is the enabler for realisation of more efficient
and effective business processes among the EE partners. The implementation of EE business processes and ICT-architecture is based on EE business goals and success factors. The Organisation
follows the structure.
© The e-Volution II consortium
page 54/113
WP 1
System requirement specification
G1RD-CT-2002-00698
5.3 Further issues
5.3.1 Usability requirements
This section describes user’s aspirations for how easy it will be to operate the product. The usability
is derived from the abilities of the target users of the methodology and methodology complexity.
− The methodology has to reduce the complexity of the real word. The methodology has to provide
an abstract model of the real word to reduce its complexity by simplification and generalisation.
− The methodology shall be used by skilled people with different, but basic knowledge about management methods and management tools/instruments. The methodology is first of all addressed
to the industrial user with limited theoretical background knowledge.
− The methodology shall be used by people with little training about the methodology. The user
should learn of how to use the methodology in a considerable time. The methodology documentation should be packaged with a tutorial. Alternatively a training course may be offered.
− The methodology shall be suitable for application in different branches.
− The methodology shall be suitable for application in different European countries (cultures).
− The methodology has to provide a guideline (reference process model) for the target user.
− Formalisation and standardisation as means for easy methodology content management and
dissemination.
− The integration of state-of-the-art models, concepts and standards increase the methodology
acceptance. Completeness is not required, but the flexibility to advance the methodological approach.
− Use scenarios for methodology are:
a) follows strictly the reference process model;
b) adapts the reference process model to his specific needs;
c) follow his own approach.
5.3.2 Maintainability requirements
The methodology represents business management know-how. Consequently, the methodology has
to take into consideration state-of-the-art management methods and instruments in the context of
methodology content management (CM). The CM approach has to be specified for the creation,
edition, and update of reference process model. The CM approach has to include functions that relate to authors, editors, collaborators and other personnel involved in the preparation of the process
reference model content.
5.3.3 Support requirements
5.3.3.1 e-volution tool kit
The e-volution tool kit is expected to be a workbench solution that supports e-business project workers with certain semi- and fully-automated functionalities of the methodology. It is an integration platform that enables the access to the several integrated tools.
The tool kit has to enable the individual configuration and application of the methodological process
model by the help of configurable software modules. Configurable interfaces have to enable the data
exchange with existing third party business information system applications.
5.3.3.2 Business modeller and data designer
The graphical business modeller designer and data designer are innovative third party applications
for the object driven business engineering and business model driven software development. The
target of the graphical business modeller is the stepwise instantiation of the EE business model. The
© The e-Volution II consortium
page 55/113
WP 1
System requirement specification
G1RD-CT-2002-00698
data modeller enables the more efficient of running software applications by database independent
persistence and independency from the operation systems.
5.3.3.3 Content provision
A Content Service Provider (CSP) shall be implemented. The CSP has to provide the user with
background information on how to develop an e-business strategy, and also targeted information on
specific sectors. The information shall be provided through a public web-portal. The applications of
the CSP should reach out to a number of applications that involve diverse sectors. The CSP shall be
dedicated to general arguments concerning e-business and shall also provide content on specific
sectors. The sectors shall be first of all the office furniture, photographic sector, and ceramic sector
(test case companies).
5.3.4 Cultural aspects
The first version of the methodology shall not distinguish between German, Italian and Greek specifics. The testing, assessment and refinement of the methodology has to provide feedback about cultural differences in using the methodology and to provide additional final requirements for methodology update. These requirements are particularly relevant because of the expected use of the methodology on European level.
© The e-Volution II consortium
page 56/113
WP 1
System requirement specification
G1RD-CT-2002-00698
6 INDUSTRIAL SOFTWARE REQUIREMENTS
6.1 General IT-requirements of SMEs and EEs
The business activities of SMEs are of great importance to the economic development, in terms of
employment, expansion and social growth of a country. The use of Internet technology and related
applications in formulating business is an important asset and a competitive advantage in nowadays
business making process.
However the nature and size of SMEs, in many case, inhibits the adoption and the use of IT technology primarily due to the fact of resource limitations in terms of finance and available skills. Thus,
many SMEs are driving by the need to join forces with others in order to make a competitive force
able to make business by employing IT technologies (e-business). The requirements that have to be
fulfilled in each case of the extended collaboration depend on the current IT adoption degree, as
well as on the nature of the business. In the first case current status of the SME in terms of IT technology enablers, orders the degree of investment necessary for the extended collaboration. In the
second case the customers’, users’ and software requirements are blended together to produce the
core functional requirements (a detailed set), which are going to be the basis for any software development assisting e-business realization.
The following software requirement specification is based on an ICT state-of-the-art and industrial
requirement analysis. It provides the requirements specification for the e-volution tool-kit system and
software which will be specified and developed in WP 2 and 3.
The software has to be designed in a way that supports the creation of and constant work within
Extended Enterprises (EE). Such EE have dynamic constellations and work distributed. That means
that the requirements for the software are clearly defined. It has to be both a web-application but
should also be usable as stand alone solution for small companies. It has to use standardized data
exchange formats, where the XML-data exchange format as the mostly excepted and distributed
format should be preferred.
EE are mostly lead by one strong partner which implies that the module includes the definition of
different roles within the supply chain. Because of different reasons, partners are changing, will be
included in or excluded from the EE. That has to be manageable by the software and the methodology too, which can be done by clear identification and transparent definition of each involved partner.
6.2 System and software concept drivers
6.2.1 System and software purpose
The general objectives of e-Vo tool kit is to serve as an enhanced knowledge base and decision
support tool, to help the formulation of company’s tailor-made e-business strategy, in the context of
an extended enterprise. The tool documents and supports the application of the road mapping
methodology, which will be presented in details in the Task 2.1. The heart of the tool is a software
system with two main modules together bounded:
1.
The market module implements the model (entities and behaviour) of the market, making use of
the method like market segmentations, portfolio assessments and trend analysis and providing
to the manager with opportunity and threats.
2. The organisation module implements the model (entities and behaviour) of the organisation,
identifying the underlying parameters and specification in regard to products, process organisation, performance indicators and providing the manager with strengths and weaknesses.
© The e-Volution II consortium
page 57/113
WP 1
System requirement specification
G1RD-CT-2002-00698
6.2.2 Customer and user specification
Target customers of the e-volution tool-kit are SME managers, business consultants and other experts involved in the e-business strategy and road map development process.
Target users are managers, specialist and experts in a certain area, e.g. IT, management trainer
and business consultants.
6.3 Non-functional software requirements on the e-volution tool kit
Non-functional requirements are the behavioural properties that the e-volution tool kit should have.
The non-functional categories have been identified by ICT experts and validated by industrial users.
6.3.1 Look and feel
Graphics
Graphics in applications should be very simple, easy to remember by the users and should identify
clearly the objects or concepts they represent.
Colours
It is better to use a simple colour model, with no more than two different basic colours for default
functionality and a standard set of colours to communicate additional information to the user.
Background and borders of components should be rendered using light, non-saturated colours,
which do not distract the user and are natural to the eye.
Selected or focused items should use a more saturated, neutral colour such as blue. Text should be
rendered using black.
Text
Text is an important design element and appears throughout the application in labels, buttons and
other components. To ensure consistency, ease of use, and visual appeal, only one simple font style
in no more than three different sizes should be used for the whole application. For most applications,
only one font colour (preferably black) should be sufficient. Other colours should be used to help the
user identify certain values or to notify the user that an unexpected situation appeared.
Language used in applications should be clear, concise and consistent, with wording that is readable and grammatically correct.
Menus
Menus have to be well organized so that the operators can navigate them intuitively. Thus it is best
to implement standard menus like File, Edit, View, Help, etc, which most users are already familiar
with. These primary menus positioned in the menu bar should be equipped with keyboard mnemonics (ALT + letter) for faster access. Item names should be capitalized and one word in length to be
easily recognized.
Secondary menus’ names can be longer. Menu options containing submenus should indicate this
with an arrow displayed next to the name and menu actions invoking a dialog should indicate this by
displaying three dots (“…”) next to their name.
Messages
The user has to be informed about any event that occurred inside an application without his direct
initiation. The user also has to be notified upon results of his actions. Expected and frequently occurring messages can be displayed in a status bar or preferably in a special textual report area, while
unexpected and important messages should be displayed in a special message box.
Buttons
© The e-Volution II consortium
page 58/113
WP 1
System requirement specification
G1RD-CT-2002-00698
A typical dialog is of fixed size and contains a few text fields, check boxes and radio buttons together with a pair of control “OK” and “Cancel” buttons. The control buttons should be placed in the lower right corner of the dialog, while the design of the rest of the components above them should follow the same guidelines as the rest of the application. The “OK” button should be the default command that can also be accessed through the “Enter” key on the keyboard while pressing the “Esc”
key should be equivalent to the “Cancel” command.
The interface should be user friendly.
 Each task and sub task performed by the user should be separated and isolated not to confuse
the user. This distinction should be provided by the analytical set of the functional requirements.
 The incorporated applications should have their own focus provided by separated-distinct User
interactive forms (comprising separate units).
 The logical flow of task completion should be in compliance with the logical flow of events as
these have been identified in the functional requirements. Therefore each sub task has to be organised in a well defined structure or workflow, as this one is a very important asset.
 There should be a help document describing each step (task or sub-task), attached in the task’s
interaction form. This help assisted document should describe the purpose of the step, the input
needed.
1. The style of this help document should be always the same regardless of the step
taken.
2. It should have a unique colour and the text style should be easy to read.
3. The help text should be hidden in cases where the interaction is simple whilst should
be always showed in cases where the user encounters a more complicated interaction.
4. Contextual help.
 The style of the various control components for accepting user’s input should be always the
same, regardless of the task taken.
 The controls should have, apart from text description, also –whenever possible- an image at-
tached, in order to give a quick overview of their functionality.
 Audit queues should be provided whenever necessary.
 All the interfaces should follow a well defined and structured layout in order to facilitate the user
approach.
6.3.2 Usability
This section describes how easy it will be for the intended users of the product to operate it.. Usability represents the measure according to which a product can be used by a specific users in order to
reach specific objectives in terms of effectiveness, efficiency and satisfaction inside a specific context use. The product’s usability is derived from the abilities of the expected users of the product and
the complexity of its functionality
The evolution toolkit should be usable in the sense of the “ease of use” and acceptability of the system for the intended users carrying out the road mapping realisation analysis. Usability will depend
on the user performance and satisfaction. The usable characteristics that the evolution toolkit should
provide are:

Learnability: The system should be easy to learn so that the user can rapidly start getting
some work done with the system. All windows should have a help button. Clicking on it a
complete explanation of fields involved in the window should appear.

Language used in each window should be English and, without modifying software, it should
be possible to change language application.
© The e-Volution II consortium
page 59/113
WP 1
System requirement specification
G1RD-CT-2002-00698

Efficiency: The system should be efficient to use, so that once the user has learned the system, a high level of productivity is possible.

Memorability: The system should be easy to remember, so that the casual user is able to return to the system after some period of not having used it, without having to learn everything
all over again. A minimum number of windows reduce the mental load of managing multiple
windows and the related potential confusion.

Error resistance: The system should have low error rate, so that users make few errors during the use of the system, and in that case the toolkit should be able to easily recover from
them.

Satisfaction: The system should be pleasant to use, due to the friendly user interface, so that
users are satisfied when using it. Moreover the system should offer a quick connection to all
the functionalities: the user will strongly appreciate how quickly he can browse through the
software windows.
6.3.3 Operating platforms
Operating system
This specifies the physical environment in which the e-volution tool kit will operate. The field research in SMEs shows that most of the interviewed companies use Windows Operating System.
Linux and Unix are not very widespread, so Microsoft operating systems has to be our prime deployment target.
Operating system agreement
Others
Unix
Operating system
agreement
Linux
Windows
0
1
2
3
4
5
Agreement level
Figure 6-1: Operating system agreement
The environment of e-volution tool kit should be Windows based, because other operating systems
are not widespread, nevertheless this does not mean a significant reduction of e-volution potential
customers.
Databases
There is not a common DBMS used by the interviewed companies, if we do not consider Access
which is a database for small software applications. Very complex DBMS are not used inside EE
companies, a good choice is a database like SQL SERVER, which makes available a complete but
not complex free edition DBMS, and if there is the need of managing a higher amount of data it is
possible to use its professional edition. It is not a multiplatform solution, but the widespread of windows operating systems doesn’t limit the number of tool’s potential customers. Finally it has also a
moderate level of spread.
© The e-Volution II consortium
page 60/113
WP 1
System requirement specification
G1RD-CT-2002-00698
Dbms % used
Other
Access
Informix
Dbms % used
db2
Sqlserver
Oracle
0
10
20
30
40
50
% of usage
Figure 6-2: DBMS % used
Referring to the previous chart, the choice of SQLSERVER as RDBMS is fouded on the trade off
between the need of a reliable storage engine and query processor for web applications and the
outcomes of SMES interviews.
In fact Microsoft SqlServer satisfies: –all the features of a professional RDBMS,
- the low IT budget requirement, making available MSDE which is its totally free edition. In fact,
MSDE is designed primarily to provide a low-cost option for both developers who need a database
server that can be easily distributed and easy to implement and managers who need to have installed a value-added business solution.
- the professional needs of managing higher amount of data and more complex solutions (OLAP
transaction, datamining, …). Although it is not a multiplatform database, this does not limit, for the
same reasons presented for the operating system, the number of the e-volution target user.
System architecture
Actually (as from the analyzed sample) most of the software architecture adopted in EEs are client
server based, while web based solutions are beginning to spread. It reflects the trend to cautiously
change software architecture, but there is also an interest for this new kind of architecture. In fact, as
emerged from the DSS installation question, most of the companies prefer web based installation,
showing an increasing interest for new architectural paradigm.
Besides the interviewed companies prefer buying software instead of using, leasing, or renting approaches. Innovative solutions, like ASP and e-business on demand, actually are still underevaluated, probably for cultural reasons.
© The e-Volution II consortium
page 61/113
WP 1
System requirement specification
G1RD-CT-2002-00698
DSS installation
6%
29%
Stand alone
client server based
web based
53%
other
41%
Figure 6-3: DSS installation
Interviewed companies prefer a web based installation and this feature easily allows companies to
take part in the same EE providing their contribution to e-business strategy definition process.
Software architecture adopted
18%
24%
Stand alone
client server based
web based
82%
Figure 6-4: Software architecture adopted
Development platform
The software architecture of the tool kit could be based on Java platform (J2EE) in order to reduce
the cost of software development and, consequently, the investment of potential customers. This is
in accordance with the low price feature of the survey.
System environment
There are three main B2B solutions: CRM. SCM and ERP, which are generally, identified as operational tools for managing the overall business process of companies, both internal and external processes. These systems provide influence on decision making and taking up within firms, but are not
properly recognized to support directly strategic decisions formulation and implementation.
© The e-Volution II consortium
page 62/113
WP 1
System requirement specification
G1RD-CT-2002-00698
So there is an important need for software that can process and synthesize vast amounts of data
daily collected by firms during their business process execution, and receive strategic information (or
roadmaps) for business strategies elaboration and implementation. This kind of software is generally
identified as Business Intelligence (BI) applications, by integrating various company information systems, allow retrieving and processing data, which come out from different systems and support strategic decisions taking up. E-Volution tool-kit has to be a system which supports the development
and implementation of e-business strategies, which cover the whole supply chain, enabling Extended Enterprises in European SMEs.
6.3.4 Technical support, maintainability and portability
Most of the interviewed Extended Enterprises do not invest enough on ICT: in fact they only have a
low number of employees in the IT department and sometimes these ones are external. Moreover,
as they do not spend so much in the employees training, this fact involves that e-volution tool kit
maintenance has to be simple. In this way it could be possible that Extended Enterprises are able to
do by their own basic tool maintenance activities and that tool maintenance support provided by evolution Consortium Members is not expensive. Therefore, web based solutions with a client that
does not need any installation is well suited inside this context.
ICT Employees
> 8 external
>8 internal
4-8 external
ICT employees
4-8 internal
1-3 external
1-3 internal
0,00%
10,00%
20,00%
30,00%
40,00%
50,00%
60,00%
Figure 6-5: ICT Employees
© The e-Volution II consortium
page 63/113
WP 1
System requirement specification
G1RD-CT-2002-00698
ICT employees training
Others
E-learning
Not trained
Training on
demand
Learning by doing
0%
10%
20%
30%
40%
50%
60%
70%
80%
ICT employees training
Figure 6-6: ICT employees training
6.3.5 Security and Extended collaboration
e-Volution security model concerns security issues introduced during the exchange of data between
the partners (SMEs) via network. Such that, security services are provided by technological security
mechanisms, which aim at facing known possible attacks. Applying security is more an engineering
approach that has to do with employing different mechanisms to achieving the desired level of security while taking into account various constraints (technical, administrative, etc.) enforced from the
system structure.
6.3.6 Web Security Precautions
In the most important step, which the System Administrator can take to increase security, is to create a written security policy. This security policy should lay out the web policies with regard to:
1. Who is allowed to use the system.
2. When they are allowed to use it.
3. What they are allowed to do (different groups may be granted different levels of access)
4. Procedures for granting access to the system.
5. Procedures for revoking access (e.g. when an employee leaves).
6. What constitutes acceptable use of the system.
7. Remote and local login methods.
Actually security framework provide only authentication and access control or authorisation. the first
feature answer the question “who” whereas the second feature answer the question “what”.
This “e-Volution security constitution” needs to be a summary of how the information system works.
There are two major benefits of having a written security policy:
1. The system administrator will understand what is permitted and respectively what is not on the
system.
2. The security policy will serve as a list of security requirements based on which future technical
issues and solutions will be examined.
© The e-Volution II consortium
page 64/113
WP 1
System requirement specification
G1RD-CT-2002-00698
6.3.7 General Security Precautions
There are some general security precautions that the e-Volution system’s administrator has to take
into account:
1. The number of login accounts should be limited to the necessary users that log on the system. All
inactive user accounts should be deleted. In fact web applications are compliant with the “session” paradigm: after a specific time of inactivity, the “session” is killed and the user is logged out.
2. The administrator should check that the users that login use good passwords that cannot be broken easily. (use of strong password instead of weak password)
3. Any unused services should be turned off.
4. The system and Web logs should be checked regularly for suspicious activity.
5. The administrator should be sure that the permissions are set correctly on system files, to discourage unauthorized access.
Apart from the above the system administrator should also take into account any security issues that
may arose from the specific location of the system’s installation.
6.3.8 Standardisation issues
Data exchange standards and format
EDI (Electronic data interchange) is a standard format for exchanging business data. The standard
is ANSI X12 and it was developed by the Data Interchange Standards Association. ANSI X12 is
either closely coordinated with or is being merged with an international standard, EDIFACT. One
new standard, which worth to be mentioned is XML (Extensible Markup Language).
An EDI message contains a string of data elements, each of which represents a singular fact, such
as a price, product model number, and so forth, separated by delimiter. The entire string is called a
data segment. One or more data segments framed by a header and trailer form a transaction set,
which is the EDI unit of transmission (equivalent to a message). A transaction set often consists of
what would usually be contained in a typical business document or form. The parties who exchange
EDI transmissions are referred to as trading partners.

X12. The base of X12 is a simple data dictionary. A simple element represents the smallest
unit in X12. It can be a price, a description or an ID. Most of the industries use a subset of
X12. For example, Chemical industries use CIDX, Transport industries use TDCC, Retail
industries use VICS etc.;

UN/EDIFACT. UN/EDIFACT was adopted by ISO on 1987 and is based on X12, but X12
offers more functions than EDIFACT;

XML. Another open standards for EDI is XML. XML (Extensible Markup Language) is a
flexible way to create common information formats and share both the format and the data
on the World Wide Web, intranets, and elsewhere. XML/EDI proposed in 1998 is used by
many industries, which use EDI. XML is very suitable for exchanging prices and product
information in a supply chain, because it is designed to share data on a network
infrastructure. One of the main advantages of XML is its ability to work on different platforms.
XML is useful because a document can be written once and can be rendered in different
computer systems, from computer monitors to mobile phones.
XML widespread and its features make important that the tool is enabled to exchange data using
XML in order to communicate with other company wide information system.
Data exchange can be insured also by DBMS (Database Management System). In fact storing data
produced in a relational database allows to read them using standard languages (SQL, Structured
© The e-Volution II consortium
page 65/113
WP 1
System requirement specification
G1RD-CT-2002-00698
Query Language) and, in the same way, it is possible to collect data from internal databases and
from external sources. In this case the interoperability is DBMS based.
User interface
The user interface (UI) serves as the output panel for the e-volution tool kit software.
There are different usable rules and recommendations for the development of user interfaces. If
software is not easy to handle, the user is not willingly to work with it. For the user the user interface
seem to give advice how the software works and how usable it is. So a well designed user interface
enhances the satisfaction with the software and allows people to work with the application without
the necessity of reading handbooks or manuals. The well designed user interface supports the user
to carry through his tasks.
The dialogue between the system (in our case the e-Volution tool-kit software and the user is a very
important function of the software and therefore has to be taken into special consideration
The graphical user interface (GUI) contains elements like windows, icons, menus, pointing, and
graphics which provide different advantages: easy to learn and use, quickly switch and interaction
with several different applications
According to DIN EN ISO 9241 four different types of dialogue can be distinguished.

menu
The user chooses the favourite command from a menu list. The menus can be subdivided in pop-up,
pull-down and slide-out menus
advantage:
disadvantage
easily learnable
inconvenient for the experienced
user
low error rate caused by invalid overlapping of application inforinput possible
mation

command language
The command languages base on the input of commands with a predefined syntax. In most systems
it is possible to summarize commands via batch files.
advantage:
disadvantage
fast and efficient working for the high learning effort
experienced user
big/extensive commands can be mistake-prone input because of
realised
the predefined syntax
activities with different / many errors with considerable conseobjects realizable
quences possible
undo functionality only in few
exceptions

direct manipulation
This dialogue bases on a pointer tool like for example the mouse pointer. Dialogue builds up natural
actions (like deleting a file by throwing them into a dustbin/wastebasket via the mouse pointer).
Icons act as representation of objects and activities from the real world. The user sees the objects
on the desktop and can control them through direct manipulation.
© The e-Volution II consortium
page 66/113
WP 1
System requirement specification
advantage:
G1RD-CT-2002-00698
disadvantage
low learning effort , use often inexperienced users have to
intuitive
learn working with the pointer
tool
use of well known metaphors wrong inputs are possible when
forces the linkage to new and there is no clear analogy
traditional knowledge
fast reachable efficiency of the reduced acquisition of specific
system
knowledge
forcing of explorative learning,
fearless use

form
Forms serve as input of structured data in a data base, but also to the output for changing data
advantage:
disadvantage
analogy to forms => easy learn- lost overview for bigger forms,
able
because important information
disappear from the view field
efficient and fast working
handling is intuitive
form can fully be corrected before confirmation
The user interface of the e-Vo tool kit will be a mixture of form based, direct manipulation and menu
due to their different advantages. The average potential user of the tool kit is well experienced.
Following are the most important rules for designing user interfaces presented according to their
usefulness for the e-Vo tool kit user interface.
User control and feedback
Generally the user has the possibility to control the single steps and they should not be prescribed
unnecessary. The user control will be enabled and supported via the following functions:

The cancel button, go back button and / or undo facilities, which should be present/located in every dialogue box is a suitable tool for less experienced users, which want to
learn via trial and error, the exits are clearly marked

Every destructive action requires confirmation.

Activities lasting longer than 10 s should be interruptible. it is useful to show the progress, if
possible with the expected time

New activities could be started while the previous one is still running.

All Activities should not have unexpected irreversible effects

The interface should show resilience to user errors and recovery from errors
© The e-Volution II consortium
page 67/113
WP 1
System requirement specification
G1RD-CT-2002-00698
Inform the user continuously about what the system is doing, for example if a search is still in progress or has been completed with too many matches/too few matches the search field icon can
change colour.
User efficiency
The user efficiency will be increased by the use of known concepts and icons which the user is familiar with. The user efficiency can be enhanced by simplicity and consistency. Simplicity can be
achieved especially for the more experienced user through the ability of quickly performing frequently used operations for example via abbreviations, menu short cuts etc.
The basic functions should be accessible easily, special options should not render prominent to the
basic ones.
Help
The help function within the e-Volution tool-kit will enable the user to quick and easy trouble shooting and enhances the feeling of control about the tool kit. Clear and precise error messages as well
as both types of help messages („help, I am in trouble“ and „help, I want information“) will ensure
and support a efficient use of the tool kit.
Online help should be available at every time, easy to find but not predominant. The error messages
should be clear and precise.
An entry from different points/places to the help system should be offered.
The detailed information concerning the design rules and the graphical lay out will be concretised in
the software requirements.
© The e-Volution II consortium
page 68/113
WP 1
System requirement specification
G1RD-CT-2002-00698
7 MARKET SURVEY FOR EXPECTED EVOLUTION PRODUCTS
An in depth state of the art analysis about relevant technologies and systems as the basis for doing
e-business was already done in “Deliverable 1.2: Analysis report on industrial software requirements
and not repeated here.” E-business enabling technologies and systems itself are not in the scope of
the e-volution project results but the IT-market must be taken into consideration in the course of ebusiness strategy development. That’s why a short introduction is give at the beginning. But the
main aim of this chapter is to give an overview of the market, the e-volution results will be positioned in.
The two main results of the e-volution project will be
1. a management methodology for the planning of e-business in EEs, in particular for SME EEpartners;
2. assisting software tools (the e-volution tool kit) for the efficient use of the methodology;
3. accompanied by a training package and Content Service Provider.
7.1 Overview of European ICT and e-business market environment
The general purpose of IT is to strengthen customer-loyalty and networking with external partners.
Companies are increasingly calling on IT organisations to develop a network of relationships encompassing customers, suppliers, partners, and internal activities in an Extended Enterprise, that´s
accessible, integrated, scalable and resilient.12
During recent years IT-systems have gained more and more importance for enterprises of different
kinds. 81% of all respondents to the standardised survey rate the economic relevance of e-business
for SME as high or very high. The general economic relevance of e-business is even believed to be
superior to the economic relevance for one's own company. A positive impact is also seen on the
company's image and market position, customer and supplier relationships and knowledge management.
But not only positive tendencies can be traced concerning this matter – as IT demands to keep up
permanently with new requirements. The demand for IT has decreased during last years and became a sheer cost factor. But slowly, IT budgets grow again.
Figure 7-1: IT investments13
12
Nigel Stokes in “The Extended Enterprise comes out of age”, eAI Journal, p. 42.
13
BITKOM; EITO in: Management Kompass, IT-Strategie., p. 6, edit.: Mummert Consulting/F.A.Z.-Institut, March 2004.
© The e-Volution II consortium
page 69/113
WP 1
System requirement specification
G1RD-CT-2002-00698
New tools of integration offer a high innovation-potential. In his article “Where are the innovations?”
A.-W. Scheer lists them as follows:
 web-services
 enterprise application integration
 component architecture
 business-process-management14
7.1.1 Products / Solutions
The respondents to the standardised survey are aware of many types of software and software producers. Office applications, PPS systems, MIS, ERP and Data Warehouse are the most frequently
named e-business solutions that the standardised survey respondents have already implemented.
Plans for implementation of e-business solutions feature in the areas of knowledge management, eprocurement, E-Customer Relations Management and GPA applications.
One-third of all companies said they used Microsoft applications, while 22 % of SME use SAP. The
surveyed experts named SAP as the most widely known e-business tool. About one-third uses other
software. More than 50 % of respondents to the standardized survey work with a combination of
standard software and in-house developments. Only 5% are not dependent on standard software
providers and develop in-house solutions. This trend is confirmed by the surveyed experts, who presume a combination of standardized and in-house software solutions. Depending on the size and
status of the e-business, experts prefer the software of niche providers. Small providers often
achieve better results when it comes to meeting the individual requirements of companies, particularly small companies. In addition, they recommend that individual tools be implemented for certain
business processes.
With regard to the implementation in individual company departments, most respondents have already used e-business solutions in the areas of distribution, public relations, finance, marketing and
purchasing. The distribution, research & development, marketing and controlling departments are
believed to offer the strongest potential for the implementation of e-business.
73 % of all respondents say the integration or adaptation of software is carried out by own staff. 56
% of all answers indicate that external experts are involved in the process. Beyond that, 36 % of
responses indicate a need to adapt business processes to software. Most experts questioned in the
qualitative survey also pointed to the need to not only adapt software, but also business processes.
7.1.2 Technology integration
The Extended Enterprise covers all key business functions. There´s a need to integrate primarily
inward-facing applications such as ERP (enterprise resource planning), SCM (Supply Chain Management), and legacy systems with applications that provide outward-facing connectivity to suppliers, partners, and customers.
The integration of technology in business processes is one of the most difficult tasks for the decision
maker. Apart from “tough” factors of success such as project management, finances and technology, “soft” aspects like communication, motivation and personal management have to be taken into
consideration as well. Especially the introduction of ERP causes headache. As ERP appeals to the
central business processes of the enterprise, employees have to adjust.
Before they realise the advantages, ERP disappoints first. This difficult stage of transition should be
kept rather short and should be overcome together with the users and the affected groups.
Worst practices in integration
 existing strategies, relationships and objectives are taken into consideration insufficiently
14
compare: A.-W. Scheer: Wo sind die Innovationen?, CeBIT 2004 Verlagsbeigabe, F.A.Z., Mi., 17.03.2004,
Nr.65
© The e-Volution II consortium
page 70/113
WP 1
System requirement specification
G1RD-CT-2002-00698
 planning bases on unrealistic assumptions
 competence is not clearly distributed
 skills do not suffice for project management
 future needs are not taken into consideration15
7.1.3 Room for improvement
81 % of respondents to the standardized survey said they were satisfied with the software they use,
20% see a need for further improvements. A desire for improvement of e-business solutions prevails
above all in the areas of MIS. 27 % are dissatisfied with their Office Applications. Improved eprocurement, knowledge management and ERP play a role for about one-quarter of all respondents.
20 % would like to see SCM and CRM improved. CRM is the focal point of the Extended Enterprise,
as Nigel Stokes, CEO of Data MirrorCorp., puts it. It brings together all customer information to create a single picture of each customer.
When asked specifically about their expectations with regard to MIS, small and mid-sized companies say it is important that such an instrument is user-friendly and answers to their needs and
hopes of a structured outline and less complexity. Whether the instrument is up-to-date is a key criterion for 20% of respondents. Experts consider MIS to be a "luxury instrument" for SME. Other tools
should be prioritized in an initial introduction of e-business solutions.
The e-business annual names the points which need improvement - and which are already, or will
be, ameliorated by the enterprises:

security – The general purpose of IT is to strengthen customer-loyalty and networking with external partners – but matters of security are hindering the development. “security, quality of service and reliability are the basic requirements concerning the future Internet”

mobility –“Internet supports mobile appliances”

agents – “software is part of our every-day products and links them via Internet – intelligent software-assistants take over routine work”

semantic web – “the semantic web makes the crossover from information to knowledge possible”

convergence – “the Internet will be platform for the convergence of all media”

human-machine – “intuitive appliance will make Internet usage easier for everybody”
7.1.4 Requirements and risks
Medium sized enterprises are discovered by IT-offerers, now – as trust-customers are occupied with
system-consolidation. So marketing has shifted towards a new “peer-group”.
So another way of communication has to be found – which corresponds to the enterprise. E.g.:

IT-language is generally understood, but does not reach the needs of middle-class

Products are not applicable to middle-class, as middle-class organisation-structures differ from
those of the trusts
So middle-class requirements concerning IT-service-people and –suppliers are like Mr. U. Faulwetter from Koenert-group puts it:
 reliable partners who:
-
“speak our language”
-
“give new impulses”
15
Donryn Dewar and Melanie Ellis (Campus Management), in: Management Kompass, IT-Strategie., p. 9,
edit.: Mummert Consulting/F.A.Z.-Institut, March 2004 and Nigel Stokes in: The Extended Enterprise comes of
age, eAI Journal, p. 42
© The e-Volution II consortium
page 71/113
WP 1
-
System requirement specification
G1RD-CT-2002-00698
“should fit – with regards to the size of our enterprise”16
In the article ”The future enterprise” the author states that: “(...) in several years already – the term
(e-business) will sound quite absurd. The “e” will at most stand for “enhanced” or simply for “everyday” as e-business will have become the normal case meanwhile.”(“The future enterprise”, p.3)
But after an inquiry made by the professional journal “CFO-Magazine” three of four enterprises affirm that they might have invested too much in the IT-sector.
Only 14% state that the investment was worth it which means that these enterprises have assessed
a ROI and reached a benefit.17
In the survey the key medium-term risks which SME mention are that e-business will generate security risks and entail excessive costs. 11% of all respondents take a skeptical view with regard to
technological dependence on providers and software, the risk of flawed investments and the lack of
personal contact. The experts detected the greatest risk in the possible misallocation of investments,
lack of user know-how and system heterogeneity. With regard to costs, many experts added that
SME often underestimate the follow-up costs, for example, for updates, file maintenance and staff
training.
Figure 7-2: IT costs18
So the question is which steps should be taken concerning the IT-sector in order to make it more
attractive and worth its costs:
1. further opening of IT for the market
2. e-collaboration as a “new way of teamwork in enterprises”, e.g. changing the existing Intra- and
Extranet into “collaborative workshops)
3. enhancing of efficiency and controlling
4. flexibility and velocity
16
M. Deus, Es ist angerichtet., CeBIT 2004 Verlagsbeigabe, F.A.Z., Mi., 17.03.2004, Nr.65
Eric Czotscher: Wertorientierung, p. 6-12, in: Management Kompass, IT-Strategie, Hrsg.: Mummert Consulting and
F.A.Z.-Institut, March 2004.)
18 Techconsult in: Management Kompass, IT-Strategie., p. 7, edit.: Mummert Consulting/F.A.Z.-Institut, March 2004.
17
© The e-Volution II consortium
page 72/113
WP 1
System requirement specification
G1RD-CT-2002-00698
7.1.5 Investments in IT
Regarding annual investments just under one-third of the respondents had plans to invest at least
10% a year in e-business solutions. With regard to the share of investments, respondents say that
software and licensing costs will account for one-third each of their investments. The largest share
of investments is allocated to this area.
The experts pointed out that the cost of staff training, data administration and e-business system
maintenance is often underestimated. Depending on the company size and the complexity of the ebusiness tool, they said, companies have to reckon with higher personnel expenses.
7.1.6 Trends
Gerry Cohen, CEO from Information Builders can be seen as pioneer on the field of business intelligence. In an interview he spoke about the changes of the last 30 years and came to the conclusion
that way and form of information delivery have altered as well as the consignee thanks to Internettechnology (employer, partner, and customer).
He furthermore stresses the importance of investing in BI-systems. In his opinion these systems are
necessary as information exchange is the basis for a functioning enterprise – and because BI helps
“to bring the huge treasure of information to light”. 19The growth potentials lie in the readiness to exchange ”(...) information over the borders of the enterprise”.20 In a USA market survey on B2B software with a focus on Business Intelligent Applications, the three B2B solutions ERP (Enterprise Resource Planning), CRM (Customer Relation Management) and SCM (Supply Chain Management)
are analysed and identified as “operational tools for managing the overall business process – internal and external - of companies.” These solutions “produce neither roadmaps nor high-level information for strategic decisions and implementation plans”.
According to this USA survey these results and the need to obtain extra information for strategic
decisions and the vast amounts of data generated by IT systems call for specialized software: The
Business Intelligence (BI) applications. BI applications are new decision support tools, which enable
real-time, interactive access and analysis of corporate information. This software integrates various
company information systems, allows for retrieving and processing data, which are generated by
different systems and support strategic decisions. BI applications seem to be interesting and maybe
also trendsetting for the e-Vo tool kit as the USA survey sees high need for it and says it is expected
to boost growth in the coming years – also in Europe, if at lower rates and with the time delay typical
of the IT market.
Five trends concerning e-business can be summed up:
1
business intelligence in real time
2
complete costs
-
the economic climate demands for higher yields
-
customers´ expectations towards technique-offers = continuous improvement of costperformance ratio of products
-
clear cost-reduction for installation, configuration and integration
3
support of technology-platforms
-
2 technology-platforms: Java 2 Enterprise Edition (J2EE) and Microsoft .NET
-
most enterprises use both platforms, instead of deciding for one, that means that today’s enterprise-software has to be capable of running in both surroundings
4
appreciation through integration
-
strong interest to increase the worth of their IT-investments by integrating their application costfactor could be positively influenced by far-reaching developments, which make the expensive
point-to-point-integration superfluous
19
20
G. Cohen, Den Durchblick behalten!, CeBIT 2004 Verlagsbeigabe, F.A.Z., Mi., 17.03.2004, Nr.65
CeBIT 2004 Verlagsbeigabe, F.A.Z., Mi., 17.03.2004, Nr.65
© The e-Volution II consortium
page 73/113
WP 1
5
hosted solutions
-
outsourcing
System requirement specification
G1RD-CT-2002-00698
Figure 7-3: Red pencil outsourcing21
Figure 7-4: Successful outsourcing22
All this defines the environment for the implementation of e-business in industry.
7.2 Market assessment
The potential market for e-volution is European manufacturing and service industry. Emphasis is
placed first of all in certain market fields, consisting of the SMEs in the sectors of furniture, metal
constructions and studios of graphic arts, given that some of the project’s participants belong to
these sectors and will serve as pilot applications.
21
WGMB;WiWo in: Management Kompass, IT-Strategie., p. 8, edit.: Mummert Consulting/F.A.Z.-Institut, March 2004
Wolfgang König, Tim Weitzel, Daniel Beimborn in: Management Kompass, IT-Strategie., p. 15, edit.: Mummert Consulting/F.A.Z.-Institut, March 2004
22
© The e-Volution II consortium
page 74/113
WP 1
System requirement specification
G1RD-CT-2002-00698
7.2.1 Target groups
Target customers of the e-Volution results are business managers, multiplier (public and private associations, management trainer), and business consultants. Multiplier and business consultants are
expected to transfer and apply the project results in industry, if industry is not willing or able to do it
themselves. With industry we mean preferably SMEs.
Target users are SME managers, specialist departments in SMEs, management trainer and business consultants.
7.2.2 Market and competition analysis for the e-volution methodology
The e-volution results can be positioned in the management and business consultant market. In the
following, the consultancy market in Italy, Greece and Germany are looked at.
Market analysis Italy
The key figures of the Italian management consultancy market in 2001 are:
 Total turnover: 2.141 Mill. €
 Market share within Europe: 4,50%
 Average growth rate: 10,00%
 Estimated number of management consultancy firms: 3.085
 Estimated number of consultants: 23.800
 Turnover per consultant: 90.000 €
The composition of the Italian MC-Market by services lines is presented in the following figure:
IT Consulting/ IT
Implementation
3,5% 7,9%
29,4%
20,4%
Corporate Strategy
Services
Operations Management
Outsourcing Services
38,8%
HR-Consulting
Figure 7-7: Composition of the Italian MC-Market, 2001
Market analysis Germany
The following statements are latest information, published by the Federation of German Business
Consultants BDU e.V. There was an increase in the interest in organisation reengineering projects in
2002 by 35,7 %, compared with the previous year. The total turnover of German business consultants in 2002 was 12.3 Billion Euro, a decrease of 4,5 % compared with the year ago. Whereas in
traditional management consultancy (organisation and strategy) there was an increase of 10,3 %,
the development in the IT-consultancy/service field is had a downward tendency in the last years.
A market growth is, from the current point of view, not expected because of economic and political
environment. But the postponement of strategic projects in the enterprises resulted already in investment accumulations. One of the most important issues is the improvement of IT- and data security in the connection with process and IT-integration along the value chain.
The key figures of the German management consultancy market in 2001 are:
− Total turnover: 12.900 Mill. €
© The e-Volution II consortium
page 75/113
WP 1
System requirement specification
G1RD-CT-2002-00698
− Market share within Europe: 27,20%
− Average growth rate: 5,50%
− Estimated number of management consultancy firms: 14.500
− Estimated number of consultants: 70.000
− Turnover per consultant: 185.000 €
IT Consulting/ IT
Implementation
5%
4%
40%
25%
Corporate Strategy
Services
Operations Management
Outsourcing Services
26%
HR-Consulting
Figure 7-2: Composition of the German management consultancy market in 2001
The general economic slowdown has brought changes to the German management consultancy
market. In 2002, corresponding to a negative annual growth rate of 4,5%, its total turnover decreased to 12.300 mill. €. The major decline appeared in the demand for IT and corporate strategy
consultancy. The German Association of management consultants (BDU e. V.) expects a stable
turnover in consultancy services for 2003.
Market analysis Greece
The key figures of the Greek management consultancy market in 2001 are:
 Total turnover: 149 Mill. €
 Market share within Europe: 0,30%
 Average growth rate: 14,50%
 Estimated number of management consultancy firms: 140
 Estimated number of consultants: 1.150
 Turnover per consultant: 95.000 €
Figure 7-3 presents the composition of the Greek MC-Market in 2001:
4%
5%
27%
IT Consulting/ IT Implementation
Corporate Strategy Services
Operations Management
Outsourcing Services
38%
HR-Consulting
26%
© The e-Volution II consortium
page 76/113
WP 1
System requirement specification
G1RD-CT-2002-00698
Figure 7-3: Composition of the Greek MC-Market, 2001
In 2002, the Greek management consultancy market had the highest growth rate within the European countries at a remarkable level of 19,5%. For the future, it is expected that the start of the Third
Community Support Framework (CSF), further implementation of the Information Society Programme as well as the preparation for the Olympic Games 2004 in Athens will bring about an increase in demand of management consulting services.
7.2.3 Market and competition analysis for the e-volution tool-kit
Given that competition in general includes all the actual and potential rival offerings and substitutes
that a buyer might consider, it is the area of e-business related management consultancy and the
wide area of management support systems (MSS), where e-volution product belongs to. We examine the products and services of main suppliers in this market based on a desk research in the Internet, at fairs and in literature.
There are a number of large companies operating in the MSS sector. Large American BI provider
companies, in their majority are active in Europe mainly through representatives. Their clients are
usually large manufacturing companies and also companies in the services sector.
In the context of strategy development different business management IT applications come into
play. The earliest applications intended for business strategy development are Management Information Systems (MIS) and Decision Support Systems (DSS). Their functions as a whole were reduced to support decision-making and business management processes (MIS) and to help decision
makers utilize data and models to identify and solve problems and make decisions (DSS). In a reality functionality of these applications left much to be desired. At the end of 80’s came more perfect
systems called Executive Information System (EIS) and Executive Support Systems (ESS). In a
parallel way starts development of such systems as Data Warehouse (DW), Data and Text mining
systems, OLAP (Online Analytical processing), OLPT (Online Transaction processing) and at last
Business Intelligence (BI). In spite of the fact that primarily all these systems developed separately
from each other, they are so closely integrated today that it s not possible to consider them separately.
Figure 7-5gives an overview about the development in management support systems in the last
centuries.
Software support for
the management
BI
EIS
OLAP,
OLPT
Data
Warehouse
Text Mining
DSS
MIS
60‘s
70‘s
80‘s
90‘s
00‘s
Figure 7-5: Development in management support systems
Management Information Systems (MIS)
MIS (management information systems) is a general term for the computer systems in an enterprise
that provide information about its business operations. Typically MIS refers to a central or centrallycoordinated system of computer expertise and management, often including mainframe systems
and network of computer resources. MIS describe applications that provide managers with information about sales, inventories, and other data that would help in managing the enterprise. MIS
guarantee only a suitable data supply in connection with suitable data selection and view on the
© The e-Volution II consortium
page 77/113
WP 1
System requirement specification
G1RD-CT-2002-00698
data for certain decision fields, without concession of methods or models for direct decision making.
MIS refer to much broader group of users than DSS. Today, the term is used broadly in a number of
contexts and includes (but is not limited to): decision support systems, resource and people management applications, project management, and database retrieval applications. The IBM Glossary
defines Management information system (MIS) as one of a number of older synonyms for applications and data used to support decision-making and business management processes, now broadly
called business intelligence systems. In fact MIS never had so much functionality, as BI has. MIS
are information systems at the management level of an organization that serve the functions of
planning, controlling, and decision making by providing routine summary and exception reports.
Decision Support Systems (DSS)
Decision Support Systems (DSS) are a specific class of computerized information system that supports decision-making activities. According to Turban (1990), a DSS has four major characteristics:
DSS incorporate both data and models; they are designed to assist managers in their decision processes in semi structured (or unstructured) tasks; they support, rather than replace, managerial
judgment; and their objective is to improve the effectiveness of the decisions, not the efficiency with
which decisions are being made .A properly designed DSS is an interactive software-based system
intended to help decision makers compile useful information from raw data, documents, personal
knowledge, and/or business models to identify and solve problems and make decisions. Typical information that a DSS might gather and present would be:
–
Accessing all of your current information assets, including legacy and relational data sources,
cubes, data warehouses, and data marts;
–
Comparative sales figures between one week and the next;
–
Projected revenue figures based on new product sales assumptions;
–
Consequences of different decision alternatives, given past experience in a context that is described.
 The receipt of the information by DSS – applications direct from operational data volume, which
belongs to transaction systems (for example systems for job execution, stock management or account system), proved as technical or economically not feasible. That is why the data from internal and external sources of the company (data base, internet, and intranet) was organized in the
DW.
Enterprise wide DSS, also called Group Decision Support Systems (GDSS) is linked to large DW
and serve many managers in a company. Desktop, single user DSS, also called Individual Decision
Support Systems (IDSS), is a small system that resides on an individual manager’s PC. These two
categories include a broad range of functionality. GDSS is an interactive system that helps a team of
decision-makers solve problems and make choices. GDSS are targeted to supporting groups in analyzing problem situations and in performing group decision-making tasks. A GDSS is a hybrid system that uses an elaborate communications infrastructure and heuristic and quantitative models to
support decision-making. GDSS provides technical features aimed at removing common communication barriers, such as large screens for instantaneous display of ideas, voting solicitation and
compilation, anonymous input of ideas and preferences, and electronic message exchange between
members. Sending and receiving information efficiently among all parties or specific group members. GDSS allows access to personal data files or corporate data during the course of a meeting
and shows ideas, votes, data, graphs, or tables to all members simultaneously. GDSS summarize
and displays ideas; makes statistical summary and displays votes. The gains of GSS are first of all
parallel information processing / flow. Larger groups can participate in decision making. Rapid computer discussions are possible. Quiet people can participate equally and noisy people can’t strongly
drive meeting. And the last but not the least GDSS saves travel time (millions Euro / year).
All types of DSS help managers answer questions relevant to a decision situation. The questions
may be sophisticated and complex or simple and even somewhat simplistic. A specific DSS may
only support operational decision making or it may support more strategic and long-run decision
making and problem solving. The design and capabilities of DSS influence the fact-based decisions
that can be made.
© The e-Volution II consortium
page 78/113
WP 1
System requirement specification
G1RD-CT-2002-00698
However using DSS it is possible to come across reefs. It is easy to over-promise when building a
DSS and it is easy for managers to develop unrealistic expectations for their new DSS. Even the
best DSS will not eliminate “bad” decisions. Some managers will continue to ask the wrong questions and draw the wrong conclusions from the information they receive. Because of its wide scope
and high development costs, an enterprise-wide DSS is likely to have enormous credibility with users. So we need to recognize that enterprise – wide DSS can compound and magnify the harm from
decision errors. DSS designers, builder and user need to be “critical” consumers of DSS. Decision
makers can sometimes benefit greatly from rapidly retrieving a single fact; or benefit from being able
to perform a simple ad-hoc data analysis; or by viewing data in pre-specified reports or “screens” an
EIS
Executive Information Systems (EIS) and Executive Support Systems (ESS)
EIS is a computerized system intended to provide current and appropriate information to support
executive decision making for managers using a networked workstation. The emphasis is on graphical displays and an easy to use interface that present information from the corporate database.
They are tools to provide canned reports or briefing books to top-level executives. They offer strong
reporting and drill-down capabilities. An executive information system (EIS) that includes specific
decision aiding and/or analysis capabilities is called ESS.The most sophisticated DSS build on and
extend the Executive Information Systems (EIS). EIS uses “state-of-the-art” graphics, communications, and data storage methods to provide executives easy on-line access to current information
about the status of a company. Executive Information System (EIS) serves the information needs of
top executives. It provides rapid access to timely information and direct access to management reports. It is user-friendly and supported by graphics. EIS provides global information from a corporate
view. It is normally a part of Enterprise Resource Planning (ERP) system. The most EI Systems are
Web-ready, that is why it is easy to develop an EIS in an OLAP system, deliver timely information,
improve efficiency, and provide accurate and relevant information, access to the status of the organization and improved communications. Commercial EIS software includes functionalities like e.g.
office automation, email, information management, remote information access, and information
analysis. The combination of IT-supported DSS for top management and EIS build ESS. ESS is a
comprehensive support system that goes beyond EIS to include communications, office automation,
and analysis support. ESS is a strategic information system designed for unstructured decision making through advanced graphics and communications. ESS has an ability to move from summary to
lower levels of detail (Drill down). Executive has 24 hour per day ability to examine, control progress
throughout organization. EIS and ESS solves specific problem and boosts work efficiency. It facilitates changes in organization (strategic changes or reorganization) and helps executives to “send a
signal” to subordinates to gain a computer literacy.
The following table presents a comparison of the main MIS, EIS and DSS characteristics
System
Functions
Focus
Primary
pose
Pur-
MIS
EIS
DSS
Managerial systems
Strategic systems
Status access, drill
down; Internal and
external monitoring
Staff support
Internal monitoring
Primary users
Managers and Executives
Primary output
Predefined
reports
periodic
Primary operations
Summarise
mation
infor-
© The e-Volution II consortium
Senior executives
Predefined customized periodic or ad
hoc reports, presentations and queries
Displays
pregenerated information
about past and present, creates new information about the
past present and fu-
Analysis , decision support
Analyst,
professionals,
managers ( via intermediaries)
Predefined and new periodic
reports
Creates new information
about the past present and
future
page 79/113
WP 1
System requirement specification
G1RD-CT-2002-00698
System
MIS
EIS
DSS
Functions
Time
tion
orienta-
Example
ture
Past, Present and Future
Past
Sales report, Human
Resource MIS, Financial MIS etc.
Market share tracking
Past, Present and Future
Negotiation processes support in design, quality control, research, processes,
etc.
training of decision makers
to deal with disaster situations or high risk situations
Project management
Table 7-1: MIS, EIS and DSS characteristics
Data Warehouse (DW)
Primarily DW could be defined as “subject oriented, integrated, time-varying, non-volatile collections
of data that is used primarily in organisational decision making”. A DW is a collection of technologies
aimed at enabling the decision maker to make better and faster decisions. DW architecture can be
considered as layers of data on top each other in which data from one layer are derived from data of
the lower layer. A DW is a complex system; the volume of recorded data is vast and the processes
employed for extraction, transformation, storage and aggregation are numerous, sensitive to changes and time-varying. The metadata repository serves as a roadmap that provides a trace of all the
interactions and changes.
According such structure we can consider that the lowest layer of the DW is directly related to the
environment of source data. DW integrates data from multiple heterogeneous information sources
and transforms them into a multidimensional representation for decision support applications. The
extraction or the aggregation process can be performed defining ad-hoc query procedures, or data
mining techniques. Another form of aggregation can be the implementation of models that take their
inputs via the different operational database and store their outputs into the reconciled data repository. Consequently, only the top layer is related to the decision process. As a DSS, a DW must provide high-level quality of data and quality of service. Coherency, accuracy, accessibility, availability
and performance are among the features required by the end users of the DW.
Data and Text Mining
Data Mining is the process of extracting knowledge hidden from large volumes of raw data. The importance of collecting data that reflect your business or scientific activities to achieve competitive
advantage is widely recognized now. Powerful systems for collecting data and managing it in large
databases are in place in all large and mid-range companies. However, the bottleneck of turning this
data into your success is the difficulty of extracting knowledge about the system you study from the
collected data. Data mining automates the process of finding relationships and patterns in raw data
and delivers results that can be either utilized in an automated decision support system or assessed
by a human analyst. Modern computer data mining systems self learn from the previous history of
the investigated system, formulating and testing hypotheses about the rules which this system
obeys. When concise and valuable knowledge about the system of interest had been discovered, it
can and should be incorporated into some decision support system which helps the manager to
make wise and informed business decisions.
Text Mining is the discovery by computer of new, previously unknown information, by automatically
extracting information from different written resources. A key element is the linking together of the
extracted information together to form new facts or new hypotheses to be explored further by more
conventional means of experimentation. Text mining is different from the common web search. In
search, the user is typically looking for something that is already known and has been written by
someone else. In text mining, the goal is to discover heretofore unknown information, something that
no one yet knows and so could not have yet written down. Text mining is a variation on a data mining that tries to find interesting patterns from large databases. The difference between regular data
© The e-Volution II consortium
page 80/113
WP 1
System requirement specification
G1RD-CT-2002-00698
mining and text mining is that in text mining the patterns are extracted from natural language text
rather than from structured databases of facts.
On-line Analytical Processing (OLAP) and On-line Transaction Processing (OLPT)
OLAP is the most widely used term for multidimensional analysis software. The term On-Line Analytical Processing was developed to distinguish data warehousing activities from On-Line Transaction Processing"- the use of computers to run the on-going operation of a business. In its broadest
usage the term "OLAP" is used as a synonym of DW. In a more narrow usage, the term OLAP is
used to refer to the tools used for Multidimensional Analysis.
OLAP is software for manipulating multidimensional data from a variety of sources that has been
stored in a data warehouse. The software can create various views and representations of the data.
OLAP software provides fast, consistent, interactive access to shared, multidimensional data. OLAP
is a category of software technology that enables analysts, managers and executives to gain insight
into data through fast, consistent, interactive access to a wide variety of possible views of information that has been transformed from raw data to reflect the real dimensionality of the enterprise
as understood by the user.
OLAP functionality is characterized by dynamic multi-dimensional analysis of consolidated enterprise data supporting end user analytical and navigational activities including:
• Calculations and modelling applied across dimensions, through hierarchies and/or across
members
• Trend analysis over sequential time periods
• slicing subsets for on-screen viewing
• Drill-down to deeper levels of consolidation
• reach-through to underlying detail data
• Rotation to new dimensional comparisons in the viewing area
OLAP is implemented in a multi-user client/server mode and offers consistently rapid response to
queries, regardless of database size and complexity. OLAP helps the user synthesize enterprise
information through comparative, personalized viewing, as well as through analysis of historical and
projected data in various "what-if" data model scenarios.
OLTP is a class of program that facilitates and manages transaction-oriented applications, typically
for data entry and retrieval transactions in a number of industries, including banking, airlines, mailorder, supermarkets, and manufacturers. Today's online transaction processing increasingly requires support for transactions that span a network and may include more than one company. For
this reason, new OLTP software uses client/server processing and brokering software that allows
transactions to run on different computer platforms in a network.
The most important differences between OLTP- and OLAP-model are presented in Table 7-2: OLTP
vs. OLAP: Application differences
.
OLTP
OLAP
Transaction oriented
Subject oriented
High create/read/update delete activity
High read activity
Many users
Few users
Real time information
Historical information
Tactical decision-making
Strategic planning
Controlled customized delivery
“uncontrolled” generalized delivery
Operational database
Informational database
© The e-Volution II consortium
page 81/113
WP 1
System requirement specification
G1RD-CT-2002-00698
Table 7-2: OLTP vs. OLAP: Application differences
The most important differences between OLTP- and OLAP-model are presented in Table 7-3:
OLTP
OLAP
Single purpose model supports operational
system
Multiple purpose model supports informational system
Full set of enterprise data
Subset of enterprise data
Eliminate redundancy
Plan for redundancy
Validate model against business function
analysis
Validate model against reporting requirements
Technical metadata depends on business
requirements
Technical metadata depends on data mapping results
Table 7-3: OLTP vs. OLAP: Model differences
Business Intelligence (BI)
Business Intelligence (BI) is the gathering, management and analysis of vast amounts of data in
order to gain insights to drive strategic business decisions, and to support Operational processes
with new functions. BI is an analytical process that transforms fragmented market and company data
into activity-directed know-how about requirements, capabilities, constraints, and activities, goals of
the analysed internal or external working field (actors and processes).
The aims of BI are close to real-time, aggregated management information for acceleration of decision processes in an enterprise. The vision is to have the right information, at the right time at the
right place by a mouse click on the computer. To realise that, different data sources must be analysed, the process performance measured and key figures developed. Information overload has to
be avoided by structured information presentation.
BI is a low-risk investment with many mature components. Trends such as information democracy,
corporate performance management and business activity monitoring (BAM) have been important
drivers for the adoption of BI.
BI is about the development of information that is conclusive, fact based, and actionable. It includes
technology practices like data warehouses, data marts, data mining, text mining, and on-line analytical processing (OLAP). The objective of a BI solution is to transform data into useful information,
such as customer profiles, buying habits, product profitability and competitive analysis. It may involve analyzing volumes of data for unsuspected, but valuable, associations and insight. It includes
streamlining data into useful reports and sharing that information with people inside and outside the
organization who need that information.
The benefit of BI is in creation of transparency about success-relevant cause-and-effect chains. BI
applications summarise all IT instruments that enable the direct access to business-relevant data,
automated data analysis and data retrieval.
However, implementing a successful BI initiative is not as simple as just installing the required technology. It is imperative that the business objectives for the project be clearly defined at the outset
and that the project has upper management's complete support. At this point, the technological solution can be developed, and the expected benefits of undertaking the project quantified.
The following table summarises the Gartner’s23 evaluation of most important and popular in Europe
vendors of commercial BI and DW applications.
Vendor
Rating
Last Update
Actuate
Promising
12 May 2003
arcplan
Promising
8 May 2003
23
Gartner Research
© The e-Volution II consortium
page 82/113
WP 1
System requirement specification
G1RD-CT-2002-00698
Vendor
Rating
Last Update
Ascential
Promising
14 May 2003
Brio
Caution
21 May 2003
Business Objects
Positive
27 January 2003
Cognos
Positive
27 January 2003
Computer Associates • Business Intelligence
Caution Caution
27 February 2003
Comshare
Promising
21 May 2003
Crystal Decisions
Positive
27 January 2003
Hyperion Solutions
Promising
27 January 2003
Informatica
Promising
7 May 2003
Information Builders
Promising
27 January 2003
Microsoft • Business Intelligence
Positive Promising
21 April 2003
19 May 2003
MicroStrategy
Promising
21 May 2003
NCR • Teradata Division
Promising Positive
21 April 2003
World mark MPP Servers -Teradata DBMS -Analytic CRM
Applications
Promising Strong Positive Promising
21 April 2003
Oracle • Oracle Warehouse Builder • Oracle BI Tools
Positive Promising Caution
23 April 2003
PeopleSoft BI Strategy
Promising
20 May 2003
Sagent Technology
Strong Negative
16 May 2003
SAS Institute
Positive
27 January 2003
Table 7-4: Business Intelligence Vendor Ratings as of May 200324
Fully integrated systems
The newest surveys25 show that today it is almost impossible to find a provider of only one of the
above-named system. It is as well difficult as find an enterprise which needs the functionality only
one of them. Nowadays are these systems in very strong integration and the term Data Warehousing covers all functions of IT applications for business strategy development.
Data warehouse products are categorized according to their basic function as follows:


Data extraction, transformation, and cleansing tools: Data extraction and Transformation
tools are products that extract, convert, and transform data from a DBMS and prepare a load
file for a target DBMS, the data warehouse, or data mart. Data cleansing tools are products
that identify and correct inconsistent or poor data in the warehouse. Data re-engineering, data analysis, and name-and-address integrity products are considered data cleansing tools.
Data warehouse administration: Products that assist in warehouse administration, including
metadata management, performance monitoring, user analysis, and chargeback activities.
Metadata management products include those that assist in the storage and management of
information about the organization, relationship, history, and business rules of data that resides in the warehouse.
24
Gartner Research. BI: Making the Right Choices in a Volatile Market. 21 May 2003. Frank Buytendijk,Kevin
H. Strange
25 Gartner Research. Software Market Research Methodology and Definitions, 2003-2004. 16 January 2004.
Colleen Graham, Nicole S. Latimer, Fabrizio Biscotti, Joanne M. Correia, Chad Eschinger, Chris
Pang,Thomas Topolinski
© The e-Volution II consortium
page 83/113
WP 1
System requirement specification
G1RD-CT-2002-00698

Business intelligence (BI) tools: Products that access and analyze data in the warehouse.
This includes online analytical processing (OLAP) tools, executive information systems, query and reporting tools, multidimensional tools, and decision support systems.
 Business intelligence applications: Products that analyze data, usually but not necessarily
from a data warehouse or data mart, to generate preformatted reports and/or screens in
support of management decision making. Many BI applications source data from ERP applications. These products often use BI tools (such as OLAP engines, query and reporting
tools, modelling, statistics, various visualization techniques, or sometimes even data mining
algorithms) embedded in the application. BI applications usually support a single function
within an organization such as sales analysis, enterprise budgeting, or churn analysis (in the
telecommunications industry). They may also cover the broader organization, as in the case
of enterprise performance management or balanced scorecard type of applications. BI applications are usually packaged with some
"Consultancy" services to tailor or customize the application to the client's specific requirements. These services are not included in Dataquest's BI application market size.
 Data mining tools: Products that discover meaningful new correlations, patterns, and trends
by sifting through data in the warehouse.
 Data marts: Products that are used to create a decentralized data set, designed to support
unique business unit requirements. This data can be a subset of data from the data warehouse, or it can exist as a standalone decision support system
In the conclusion we represent in the leader vendors and evaluation of functions submitted in their
products.
© The e-Volution II consortium
page 84/113
Product
Vendor
Homepage
Business Intelligence
OLAP, OLTP
Data Warehouse
Text Mining
Enterprise Information
Systems
Decision Support
G1RD-CT-2002-00698
MicroStrategy
http://www.microstrategy.com
+
+
+
+
-
+
-
MIS onVision
MIS AG
http://www.mis-ag.de
+
+
+
-
-
+
+
Brio Performance Suite™ 8
Brio Technology
http://www.brio.com
+
+
+
+
-
+
-
Analytic and Business intelli- SAS Institute
http://www.sas.com
 +
 -
 +
 +
 +
 +
 +
Comshare Decision
Comshare, Inc.
http://www.comshare.com
+
+
-
-
+
+
+
10g
Oracle
www.oracle.com
-
-
+
-
-
-
-
Oracle9i
Oracle
www.oracle.com
+
+
-
+
+
+
-
QPR ProcessGuide
QPR Software
http://www.qprsoftware.com
+
-
-
-
-
+
-
Resources & Results DSS
Resources & Results
http://www.decision-support.net
 +
 -
 +
 +
 +
 +
 +
Informatica PowerAnalyzer™
Informatica Corp.
www.informatica.com
+
-
+
+
+
+
-
WebFOCUS 5
Information Builders
http://www.informationbuilders.com
+
+
+
-
+
+
-
ProClarity Analytics Server
ProClarity
http://www.proclarity.com
+
+
+
-
-
+
-
Management Information Systems
System requirement specification
Systems
WP 1
MicroStrategy 7i
gence systems
Table 7-5: Extract of main vendors and products
© The e-Volution II consortium
page 85/113
WP 1
System requirement specification
G1RD-CT-2002-00698
The following market analysis focus on the market for management consultancy services in Italy,
Germany and Greece, and if data are available, more specifically for e-business strategy development.
7.2.4 SWOT analysis
Based on the draft product concepts and the market survey, a draft strength-weakness-opportunitythreat (SWOT) analysis is done for the expected e-volution products.
Strengths
Weaknesses
 Innovative product (introduces a new idea
 New product, with no previous experience,
and transform it in a product)
 The complete character of the product (set of
services consisting a completed product:
software, methodology, technical services,
guides)
 Consortium with experience in the field.
introduced in the market by not well-known
commercial company
 Need for strong funding for the successful
introduction of the product in the market
(marketing plan implementation and promotion actions)
 Beginners in the market
 The e-volution product can not be positioned
as an accompanied product of an already
well-known firm
Opportunities
Threats
 Competition (large companies are interested
in above the medium companies. These do
not constitute the e-volution’s target market)
 Competition (large companies with great experience, know-how etc / other smaller companies – but they have not yet expand such a
product)
 e-business consultancy sector for SMEs is
expected to have a positive development in
next years
 The fact that the potential market regards to
have personnel ready to develop services and
technologies they need
 The positive attitudes resp. need of SMEs in
the e-business and its representative applications in the course of value chain management
 The established mentality of SMEs in not easily accepting changes in their methods of
work through the implementation of new tools
and procedures
 The need for the enterprises to use a strategic decision tool combined with the trends of
the SMEs sector towards the implementation
of MSS applications
 The strong relations between buyer and supplier that characterises the B2B market and
the IT sector (companies do not easily accept
a new supplier) and the dependence on software providers.
 The high implementation costs of e-business
applications, the lack of user know-how and
the system heterogeneity
Table 7-1 : SWOT analysis for the expected e-volution products
© The e-Volution II consortium
page 86/113
WP 1
System requirement specification
G1RD-CT-2002-00698
8 SOCIO-ECONOMIC FINDINGS ON EXTENDED
ENTERPRISES
E-business in an Extended Enterprise is an activity without frontiers. Stating up to stimulate SMEs to
advance in the dimension of collaborative and e-business, first of all it is a necessity to provide
clearer views about partnership development of Extended Enterprises in the networked digital economy. This analysis provides general socio-economic requirements regarding the implementation of
the Extended Enterprise concept in practice. These socio-economic are closely related to the project
approach but does not address macro-economic aspects.
8.1 Cultural aspects of SME collaboration in extended enterprises
8.1.1 Collaborative work
Cooperation between the partners of extended enterprises are exposed to various problems like
different aims, different cultures and the protection of knowledge. The main human barriers for collaborative work in networked organisations identified are language, international differences, accuracy and reliability of knowledge, protection of proprietary knowledge, maintenance of communication channels and lack of time, fear of penalty, losing profile and company stability/market position.
Partners within extended enterprises have to deal with different cultures, handle the knowledge, find
a new way of cooperation on the human /employee level, not only on technological way.
There are different advantages for SMEs taking part in a network or being part of an extended enterprise. But these advantages are linked with disadvantages. SMEs need often to make investments (in collaborative tools for example, in infrastructure, training etc), take more responsibilities or
accept higher risks.
Collaboration in extended enterprises involves changes in people, process, organisation, culture,
communication and knowledge management. The extended enterprise requires a company and
process spanning cooperation and collaboration. A networking culture is basis for a collaborative
working. This covers the information flows, the decision finding, the open communication and the
handling of knowledge, especially in R&D collaboration.
The collaboration within extended enterprises enforces the distribution of knowledge and competencies across the SMEs boundaries and induces a change of the organisational model into knowledge
based networked organisations.
Within the extended enterprise there are different roles which are taken by the extended enterprise
partners or entities, depending if they are customers, suppliers on different tiers, outsourcers etc.
Nevertheless an overall “mission statement”, a shared vision and a shared set of values can be
helpful to enhance the effectiveness of the extended enterprise. Common values should be identified and confirmed (e.g. frankness, trust, change etc).
8.1.2 Management issues
The management of the web of relationships is very complex and one goal is the harmonization of
the different partners’ strategies into an overall extended enterprise strategy.
Regarding extended enterprise relation it has always to be in mind that the extended enterprise can
be very dynamic and subject to changes in case of pressure arising from the market, from new
technologies, from competitors etc.
A culture where people are encouraged to work together is necessary for efficient use of collaborative software. That is a long hurdle for many companies where individuals are rewarded for controlling knowledge and highlighting their own achievements, not for sharing knowledge and focusing on
team accomplishments.
It is useful to start in a small group with collaboration for testing, the collaboration should be started
to solve a real problem. In a collaborative area controversial discussions should be allowed as well
© The e-Volution II consortium
page 87/113
WP 1
System requirement specification
G1RD-CT-2002-00698
as to adapt collaborative tools to the culture and environment of the specific organisation or department.
The development of a process to get commitments and/or agreements of all partners involved in a
process is decisive for a fast decision taking in extended enterprises. An open dialogue is a mean of
checking the assumptions about processes purposes. Although in general large meetings are seen
as inefficient, in extended enterprises they are a useful and important tool to get the commitment of
all partners and a quick response.
It's impossible to prescribe a specific series of adjustments that will transform a company's culture
from individually oriented to collaborative, but some general recommendations can be described.
The culture within extended enterprise is formed by the employees and the management and include pattern of thoughts and basic assumptions which influence the way of collaborative working as
well as how problems are dealt with and solved. The knowledge about the culture and the consistence with aims and values is essential for the implementation of changes and decisive for success
or failure. A well developed culture improves the cooperation and the communication and yields in
an efficient and streamlined supply chain. However, too many layers of management can hinder the
generation of ideas, the performance of projects and the resolution of problems.
Extended enterprises will succeed especially as learning organizations. The problem solving within
teams, learning from experiences and their transformation into new approaches and the transfer of
knowledge will be supported via an open communication and a trustful environment.
There is a need to move away from functional hierarchies, from command and control way of working towards flatter more empowered structures within extended enterprises. An urgent need of faster
decision making is necessary. An increased empowerment of employees leads to efficient and successful e-business. Especially in customer focused processes a fast decision making due to empowered employees is beneficial.
Cross-functional training, development and work experience for employees will enhance the acceptance of new structures. The employment of HR tools to support performance of process oriented teams and work structures will enable the extended enterprise to an efficient way of collaboration
8.1.3 Trust
The question of trust is an essential topic in enterprise culture and employee behaviour. A successful collaboration needs trust-based relationships within supply chain. In extended enterprises there is
a lack of mechanism for trust building. Another topic in this context is the question of trust strategies
for employees which only work temporarily cross enterprises boundaries. These questions concern
the human resources management, the knowledge management as well as the IPRs. Within a collaborative research and product development the question of IPR is of fundamental importance.
They are covering industrial property rights as well as author’s rights etc. The transfer of knowledge
and technologies requires trust to the partners.
The trust between the different autonomous entities within the extended enterprise plays an important role. In extended enterprises the information and data flow cross the company boundaries
requires a great extent of trust between the extended enterprise partners. For the development of ebusiness strategies covering the whole supply chain, the trust of the partners is essential. Core
questions for example are:

how deep insights do the partners have in their supply chain?

what is about the order handling, the related customer data etc. ?
8.1.4 Training and knowledge
One of the extended enterprises goals is the enhancement products value through knowledge and
expertise coming from all extended enterprise partners. In general current enterprise cultures do not
sufficiently encourage people to share knowledge.
© The e-Volution II consortium
page 88/113
WP 1
System requirement specification
G1RD-CT-2002-00698
One key issue in extended enterprises is the management of knowledge, especially in regard to collaboration in R&D processes. The knowledge can be distinguished between documented and tacit
knowledge, which is bound to the people
The education and training does not concern only technology training on e-business applications,
but moreover non technical skills like teamwork, management and e-business: how it works in extended enterprises and what it offers.
The management and storage of data, the derived information and the resulting knowledge, including all skills of staff is the base for extended product development and improvement. Humans play a
central role in identification acquisition, storage assessment, generation, distribution of knowledge.
Only human beings can take the central role in knowledge creation...computers are merely tools,
however great their information processing capabilities may be. The input of employees as carriers
of process knowledge and experience should be integrated in the e-business strategy planning process. In this way the acceptance of the changes resulting from e-business implementation would be
enhanced.
Within SMEs a lack of learning cultures is existent. The costs for e-learning are perceived high.
The knowledge within enterprises is very often embodied in employees as tacit knowledge and it is
difficult to codify it for sharing it with other employees. Face-to-face contacts seem to be necessary
to successful transfer of knowledge
Dissemination
knowledge
of
existing Creation of new knowledge
Individual learning (resulting in e.g. schooling; vocational train- e.g. university based research
human capital)
ing; “learning by doing” in the by PhD student; “learning doworkplace
ing” in the workplace
Organisational learning (result- e.g. building data bases, creaing in structural capital)
tion of routines and manuals;
appropriation of technological
licences from other firms; recruitment of highly qualified
staff by firms
e.g. [“learning by interaction”];
R&D in universities by research groups; R&D within
firms; collaborative R&D between firms and research institutes
Table 8-1: Categories of learning (Source OECD (2001)
The most mentioned barriers for training in SMEs are as follows

Lack of time

Cost

Lack of information and support

Lack of interest and motivation

Unsuitable range of products
There are evidences, that people with higher level of education are rather disposed for further job
related training. But in general the possibilities of trainings within SMEs are significantly lower than
in larger enterprises. They have often difficulties to justify the organizational and financial efforts.
Additionally for many SMEs there is a lack of proofs for the benefit from training.
8.2 Human aspects of using e-business in SMEs
New structures caused by implementation or enhancement of collaboration may result in increasing
pressure on employees, new job requirements, new responsibilities, the risk of mergers for example
means the possibility of job loss, etc..
© The e-Volution II consortium
page 89/113
WP 1
System requirement specification
G1RD-CT-2002-00698
8.2.1 Information structures and decision taking
According to IBH experience, SMEs often do not see a remarkable ROI after e-business implementation. The costs for e-business implementation are often seen in contrast to the low additional turn
over or cost reductions. Enterprises often do not take into account that e-business projects are first
of all strategic decisions. According to different studies only a third of SMEs have a detailed internet
concept and a differentiated strategy.
A lot of interviewed SMEs are owner-led or family-owned, often with traditional structures. Thus,
strategic decisions are taken by the managing director, supported by only a few employees from
sales, controlling etc., while only a few SMEs have a dedicated e-business team.
The introduction of e-business concept and successful involvement/engagement will be very helpful
for decision taking and will address a few issues:
 SMEs first of all associate e-business with e-commerce.
 The majority of companies does not use professional software for the strategy planning and con-
trolling but only self-developed tools often based on MS Access or even Excel.
 Importing of these data has to be taken into consideration for the development of e-Vo tool kit.
 The lack of data standards is seen as a big challenge for SMEs in extended enterprises.
 In the overwhelming majority the decision is taken by the managing director, an e-business resort
or department is existent only in a few companies.
 The information is predominantly used at the permanent working place.
Project and result reports are available for the majority of e-business decision makers, followed by
market studies, whereas business outlooks where mentioned less. In parallel, reliable forecast and
external market data are seen as possibility to improve the strategy process. It points out the usefulness and necessity of providing these data via an information selector.
IT and e-business changes are mainly forced by the managing director. Decision finding is supported by controlling and engineering staff.
Project management knowledge management as well as information management are less often
used as a management tool.
8.2.2 Recommendations for e-business implementation
There is no general recommendation for successful e-business implementation as it has to adapt to
specific requirements. There is no general e-business model valid for all organizations. For example
new projects may cause new partners involved in business process and therefore a stable partnership is difficult.
For a successful implementation of e-business in extended enterprises the consideration of human
roles and organizational structures is necessary.
Successful e-business implementation in extended enterprises depends to a great extent on the
acceptance of the employees using the new systems. Measurements to integrate employee’s ideas
will enhance the motivation. Thus the management behaviour, the skills of employees and the information structures are of great importance especially in extended enterprises with its necessary
networks throughout the company barriers.
The development and implementation of e-business strategies causes changes within extended
enterprises in a very specific manner due to its complexity / corporate integration.
One of the dominant challenges is the encouragement and conviction of employees to use the new
and innovative methodologies and tools. The willingness and preparedness to accept and support
changes will enable and facilitate the success of e-business implementation.
There are no general models of e-business working, which fits to all organizations. The most obvious distinction is between the use of auctions in the supply chain for indirect goods (e.g., pens, pencils, paper, etc.). This, however, is not an appropriate business model for the purchase of products
or services requiring longer-term stable relationships. More generally, products and services involv© The e-Volution II consortium
page 90/113
WP 1
System requirement specification
G1RD-CT-2002-00698
ing high levels of expertise, demanding high quality, and involving some variability are likely to involve direct human interaction and long term stable relationships – the use of auctions in such circumstances may well be inappropriate.
The level of certainty in the chain may also be a factor. In the construction industry for example,
each new project can involve new partners working in unique mixes, and this makes it hard to develop stable integrated business models.
A further issue concerns the opportunity, through e-business, to be more customer focused. For
example, this includes moving away from being organised internally in ways that are product, service or even supplier based.
As researches show, the majority of management directors expect changes in operational processes and process optimization which are linked with changes in working environments. Effects on job
requirements, necessary further trainings and enhanced team workability are seen as prevailing
effects due to e-Business implementation
Change management is an important tool within e-business implementation in extended enterprise.
E-business implementation enforces changes in working practice; the staff within extended enterprises is exposed to changes in work compared to the working environment in traditional SMEs.
Traditional command and control models of organisational thinking are unsuitable for e-business
working.
Empowerment of staff has different advantages. The employees know is vital because they are the
people who really understand how the systems work, and what their customers and suppliers actually want and need.
One of the main reasons for the restrained speed for e-business implementation is the lack of considering human aspects. Uncertainties about the necessary changes, the long-time relationships
with customers and suppliers with their structures and networks often hamper the necessary restructurings. On the organizational side, companies tend to deal with the ‘human’ issues much more reactively. They tend to ignore inward issues – such as quality of work life – until they jump up and bite
them
Create an environment where all aspects of an employees work and role including incentives, line
up with and support the objectives of the extended enterprise
As starting point for process/business implementation: Strategically important activities areas and
projects, in which people/employees share more agreement, have more energy feel more exited,
show more commitment
8.2.3 Employees
The implementation of changes whether in management or in processes or workflows is always depending on the behaviour and skill of employees and managers and their openness respectively
their resistance against it.
The employees in extended enterprise are forced to

work flexible and adapt to new workflows, systems, processes

acquire new skills

learning/training on new / changed processes applications

process complex data and information flows

trust of information especially in R&D exchange of Information
o

extent of shared information depending on the level of trust
take new responsibilities
Within extended enterprise the employees are exposed to high complex information flows. Often
familiar with the used systems or processes, employees are often not willingly to accept or adapt to
© The e-Volution II consortium
page 91/113
WP 1
System requirement specification
G1RD-CT-2002-00698
new systems. The clear explanation and communication of changes leads to realistic expectations
and to an acceptance.
An open communication about strategy facilitates the acceptance of employees towards new systems and improves the transparency in decision making.
A collaborative mindset of employees can be boosted by education and training. Anxieties and
fears of employees due to the new structures can be counteracted with a management approach
with social and economic sustainability. Self organisation and empowerment across organisation
max enhance collaborative working of employees.
8.3 Economic findings on Extended Enterprises
While these benefits and concerns may be significant, the perhaps most exciting part of the future
lies in the challenges posed to procurement and supply management in the quest for success in
strategic cost management. There is an issue of cost transparency. E.g.: an OEM who is assigning
costs to its suppliers must assume preliminary product architecture and be knowledgeable of the
related process and discuss with the suppliers on the basis of “standard” costs. This assumes process knowledge at the OEM, which may not be the case.
An important, often unsolved issue is how to share of the financial benefits deriving from the Extended Enterprise. There is a lot to be understood in this domain, which has to do with microeconomics and possibly with game theory.
Within an Extended Enterprise it seems that the prevailing issue concerns profit sharing than cost
sharing. And the issue has to do with the type of partnership, with the stage when cooperation
starts. Quite a few styles of cooperation exist which pose a variety of problems. OEM may pay the
design costs of their suppliers in whole, including a profit percentage, or reward them with a percentage on product sales.
Another challenge is the continuous, generational decrease of costs. Most initial cost improvement
efforts directed at a neglected area find abundant "low-hanging fruit" that result in early and large
cost improvements. As cost management efforts continue, it becomes more difficult to find and implement additional significant improvements. Ultimately incremental and generational improvements
become exhausted and breakthroughs and paradigm shifts are necessary for further improvement.
Still another challenge is maintenance of flexibility. Partnership arrangements along the value chain
are likely to increase. A perfect cost management strategy for a given product or supply chain is
useless if changes in products, technology, personnel, organisation, EE constellation or concepts
render it obsolete. The challenge is to create cost management strategies that are capable of adjusting to changing conditions.
8.4 Training requirements
The learning and training culture in extended enterprise is quite different. In most companies a
“learning by doing” attitude is prevailing. Decision takers in extended enterprises suffer from lack of
time and the readiness to follow complicated and theoretical descriptions. The training material
should meet these demands and enable the focus on the core questions, depending on the information and knowledge level of the decision takers.
Despite their basic understanding of management tools and theories, a clear speech is successful
and helpful for the acceptance of the e-Volution methodology and e-Volution tool-kit. Easy to use as
well as plug and play are dominant requirements to the decision support system.
In the majority of enterprises there is no dedicated e-business department, which means, that ebusiness decisions are usually taken by the management director. But this means also, that it is
possible that the e-business decision taker has only basic understanding of e-business. Moreover
only a minority of managers in SMEs within extended enterprises use professional software for
strategy planning and controlling or has experiences. The training concept has to take into account
this fact and should offer additional information if required.
© The e-Volution II consortium
page 92/113
WP 1
System requirement specification
G1RD-CT-2002-00698
The successful dissemination and transfer of the methodology into practice will require a training
concept on how to apply the e-volution methodology and on general aspects related to e-business.
The training material on how to use the methodology and the supporting tools are targeted at the eVolution target user groups. The training material is expected to facilitate also the future exploitation
of the methodology to other parties. General training material on e-business is necessary to train the
staff so that they can effectively participate in the whole process of e-business implementation in
Extended Enterprises. The training materials will develop and strengthen the specialised and methodical knowledge of the users. Comprehensive guidelines and manuals for the use of the eVolution methodology and e-Volution tool-kit are valuable factors for the successful exploitation of
the e-Volution application in extended enterprises.
The awareness for e-business strategy planning, the readiness for using highly complex strategy
planning tools like e-Volution are enhanced and supported by clear and comprehensible explanations and training materials. Thus the full exploitation of the e-Volution methodology and tool kit
As many managers see changes in job requirements and necessary further trainings as effect
caused by e-business implementation, the training of employees with regard to e-business is essential to exploit the full potential of employee knowledge and experience to support the e-business implementation process.
8.5 Risks
External
The high complexity of processes in extended enterprise is a very critical issue and it increases
due to the partners’ approach to focus on core competencies and outsource the processes which
can be done better or more efficient by one of the partners. Therefore, the success can be achieved
only if there is a common understanding of extended enterprise goals processes and the share of
information and trust between the partners.
SMEs as part of the extended enterprise are often family owned and traditionally lead which can
be an obstacle for e-business strategy planning and implementation. In family managed companies
the owners tend to take control about all company concerning issues and data and have resistance
against delegating tasks to other partners.
Internal
The methodology design might turn out to be a very complex task. It is difficult to grasp the
concept of tacit knowledge, or the know-how contained in people's heads. The challenge inherent
with tacit knowledge is figuring out how to recognize, generate, share and manage it. Identifying tacit
knowledge in the first place is a major hurdle. Consequently, in order to avoid un-sharp definition or
insufficient development of basic ingredients the focus would be narrowed down to specific branches or to the predominant components of the process.
An always present risk is the acceptance of results from a research project by industry. Industry
needs practicable solution that doesn’t necessarily have to be state-of-the-art. The approach for getting acceptance by the target group for the solution is to build up reference cases that will prove the
increase in efficiency and effectiveness aimed at with the sue of the reference process model. The
acceptance of the methodology by industry will increase with the existence of branch models.
8.6 Summary of socio-economic findings
In the following, there is a summary of main socio-economic issues that has been found in the Extended Enterprise context:
Recognition of the Extended Enterprise concept
The Extended Enterprise concept envisages this kind of business collaboration as a contribution to a
new paradigm of organising business and non-business activities. The current pilots and research
have raised awareness of the forthcoming changes and developments, even though there are dif© The e-Volution II consortium
page 93/113
WP 1
System requirement specification
G1RD-CT-2002-00698
ferent definitions and understandings of the underlying concept. In this context, multi-skilled and
knowledge intensive networked enterprises are at the very heart of "tomorrow's production systems". The awareness among business managers, politicians and people is an important prerequisite for such a change process. People observe the environment and reflect on how they might creatively shape the development and benefit from it. Even is this might lead to a somewhat chaotic development, good solutions usually succeed.
Involvement of government and industry in developing and supporting Extended Enterprises
There are and there still will be significant public and private investment required to develop concepts, tools and methods for Extended Enterprises. Especially SMEs often cannot make this investment by themselves, but can benefit greatly. But they require also catalysts to overcome the
initial hurdles of collaboration and trust building, and thus extend their management capabilities.
Extended Enterprise constellations are regarded as an important enabler of growth in SMEs.
Public bodies should be careful in making the most effective use of their resources and help enterprises to overcome intra- and inter-organisational hurdles.
Awareness of legal and socio-economic problems associated with Extended Enterprises
There is growing awareness of political, legal and socio-economic issues hindering economic
change and growth in Europe. Whereas socio-economic issues can be addressed mainly by the EE
partners themselves, political and legal issues must be addressed on the Federal, national or European level to provide the framework for competitive and sustainable growth of European SMEs.
There is a need for research to understand and come up for solutions in the following fields:
− human development and work/life in the Extended Enterprise (e.g. contact invisibility, isolation,
overwork, maintaining focus, etc.);
− change of individual rights/liabilities in the Extended Enterprise (e.g. qualification, training);
− management of diversity in the Extended Enterprise (e.g. across countries, industries, companies, cultural issues);
− ethical issues in the Extended Enterprise (e.g. leadership vs. equality, trust vs. opportunism).
From the socio-organisational angle, necessary re-definitions of roles, working methods, training
needs, legal framework, creation of appropriate methods to manage intellectual properties, or even
the basic economic principles that drive the Extended Enterprise, are relevant issues that must be
addressed as well technological development trends and solutions.
New methods and instruments for inter-enterprise and collaborative work
Extended Enterprises must make use of innovative work arrangements and changing working practices. These work arrangements are probably some of the strongest precursors for more advanced
and prevalent forms of extended collaborations. Growing experiences with networked collaboration
allow the adaptation of Extended Enterprise concepts and development of support measures. They
also prepare the way for change in the society as more and more people are exposed to these practices and learn to live with them.
Much research has covered individual and organisational problems, e.g. on the management of diversity, however usually in the context of traditional, hierarchical organisations, not for networked or
extended organisation. This is to some extend also due to the prevailing research paradigm of social
sciences, which tries to observe and understand social phenomena, which however for extended
organisations can only be observed in few and relatively contained settings. Additionally, the influencing and shaping of socio-economic developments is usually not focus of such research in the
past.
A challenging issue is the extension of the infrastructures to accommodate metrics and mechanisms
for dynamic evaluation of fractional values for a distributed process or a process improvement per© The e-Volution II consortium
page 94/113
WP 1
System requirement specification
G1RD-CT-2002-00698
formed by an enterprise. Another related challenge is the creation of appropriate legal frameworks
for regulation of new business models, and to support the interoperation among different legal systems, supporting multi-cultural and/or multi-national Extended Enterprises, including modelling, negotiation, conflict resolution, and the management of contracts and cooperation agreements.
Legal (national/international) framework
Important within collaborative working is the question of how to solve legal issues. They are still under discussion. Open legislation concerning questions within collaborative work in extended enterprises are for example licence contracts, intellectual property rights (IPRs), fiscal regulations within
different countries, liability regulations , insolvency risks (what about data, patents etc.) etc.
Some fundamental work concerning legal framework of ICT in inter-enterprise use is done by the
Project eLEGAL (IST 1999-20570).
Current law regulating economic developments is greatly influenced by traditional, rather large and
monolithic firms, whose boundaries are clearly defined and who compete for market dominance.
Also, there is still a strong national bias in company laws. Networked organisations like Extended
Enterprises should be supported and protected by adapted regulations on European level, which
reflect the specific requirements, e.g. sharing of intellectual property, international collaboration, joint
liabilities.
Strong regulations thwart economic activity, as they either hinder collaboration or force companies
to spend considerable resources and time to work around them through special contracts.
Technological development
Technological developments will further drive the developments in the field of Extended Enterprises.
New communication and collaboration technologies enable efficient communication and collaboration, while secure data exchange and digital rights management dissolve the boundaries of companies. A careful integration and co-development of technical and socio-economic aspects is needed.
An integrated co-development of technical and social issues should be the aspiration for future work.
But the move towards customer-driven networked industrial enterprises requires not only technology
innovation but also careful attention to organisation and human.
A major obstacle in the study of Extended Enterprise concept is the interaction of the ICT and the
socio-organisational communities. These two communities are analysing trends and the identification of the necessary supporting tools as well as the evaluation and performance criteria, in isolation.
At present, only a few research and development projects are making an attempt to combine the
various types of expertise in a multi-disciplinary team.
Extended Enterprise is not just a trend
The Extended Enterprise seems often used as buzz-word to attract public attention. The underlying
concepts and their implications to society are not yet widely known and understood by the industry
and public. To avoid overuse and misuse of this term a broader introduction of the term and concept
to the first of all industry sectors is necessary.
As a consequence of the emergence of knowledge and skills-based economy and the widespread of
the e-business concepts, traditional business models and concepts are gradually being abandoned
or challenged. Traditional organisation concepts are dissolving and being replaced by new forms of
more dynamic and re-configurable organisations, like e.g. the Extended Enterprise concept as instantiation of the Virtual Organisation concept. Being at its early stages, many consequences of the
practical development, implantation, and performance of Extended Enterprise organisations are still
unknown and their affect on the day-to-day work in Extended Enterprises need to be carefully investigated and evaluated.
Once clear concepts and models are developed in this context, the next issue in support of agility is
the derivation of the mechanisms, to be implemented at the infrastructure level. Currently a large list
of support tools and mechanisms are foreseen, to address negotiation and tendering, contracts
management, monitoring and controlling among others.
© The e-Volution II consortium
page 95/113
WP 1
System requirement specification
G1RD-CT-2002-00698
9 ANNEX
9.1 Profile description of Extended Enterprise case studies
EXTENDED
ENTERPRISE
BUSINESS
AREA
DESCRIPTION
STRATEGY AND GOALS
EMEC
Machinery for
ceramics manufacturing.
It is 10 years old and its business is
B2B. It is based in the Italian ceramic
district, near most of suppliers who
have technical expertise for advanced
product development.
Main issue of almost all EE members is technological innovation. Also increasing information
sharing about the market demand forecast and
user needs is considered an important strategic
goal.
ITALY
Graphicolor
Photographical
service for professionals, companies and consumers.
It is strongly focused to match the service required by the customers. Its
commitment towards higher service
level led the company to gain updated
technology for digital photo processing.
Moreover, it has looked for complementary service providers able to support a
wide range of services to the final customer.
Main issue is to enhance synergy of EE members in sale and marketing departments. Also
exploiting all information available to the extended enterprise, in order to update the range
of services in a shorter time and cope with the
market crisis, is considered an important goal.
ITALY
ESMAL GLASS
Materials, technologies and services for the fabrication of ceramic products.
It focuses its business in following areas:
Main issue is to share information with customers about the production and end users’ analysis, in order to gather valuable information
about the end users’ requirements and trends.
ITALY
Main issue is to improve their ICT system that
allows:
ITALY
FEBAL
Furniture in the
kitchen segment
production and commercialisation of glazes for ceramic industry;
- new product development;
- personalised services and technical assistance.
Its business consists in a whole set of
activities, which cover the entire kitchen
furniture market:
-



© The e-Volution II consortium
design
production
sale and distribution.
-
to the customer to design and customize his own kitchen;
to collect orders via web;
to develop orders with a 3D CAD and
page 96/113
LOCATION
(Ceramic district)
(kitchen district)
WP 1
EXTENDED
ENTERPRISE
DE-TA
System requirement specification
BUSINESS
AREA
G1RD-CT-2002-00698
DESCRIPTION
STRATEGY AND GOALS
dynamic CAM, transmitting the information to specific CNC machines.
Main goal is to make the whole extended enterprise more efficient. Thus, after the setting
up of partnerships with specialised companies
and a clear allocation of the process, now they
are investing on ICT to ensure an effective data
exchange and gain competitive advantage.
LOCATION
Furniture (Chair
segment)
The business covers every process of
the chair manufacturing and sale. It is
managed through a set of companies,
which are very focused and specialized
on the single activity.
PLAST CAUDIO
Automotive and
electric household
appliances industry.
Its business approach is B2B and Its
production is characterized by high volume of plastic component produced in
lots according to the specific requests
coming from FIAT, which is the most
important customer.
Main issue is to improve the SCM, providing a
stable integrations of the internal value added
processes with its customers. Another issue is
to share e-services with main suppliers, in order to improve the information flow.
ITALY
IMBAL CENTER
Production and
management of
wood packaging.
It offers to its customers innovative value added services such as the management of the empty packages, the
withdrawal and recovery of the already
used packaging, the design of customised pallets according to the customer’s
specific needs for the revision and
reengineering of logistic processes.
Main issue is to improve synergy on the supplier’s side and on the customer’s side.
ITALY
WINI and Veyhl
Manufacture of
furniture and
metal products
The EE focuses on the customersupplier b2b relationship. WINI has
several redundant suppliers that can be
replaced one by another. WINI purchases standard as well as specific
parts. WINI aims at closer b2b relationships with its about 20 core suppliers in
the procurement and sourcing process.
Veyhl supplies WINIl. The Veyhl group
itself is already an EE, as there are
temporal customer-supplierrelationships between the single pro-
The joint business goal is the increase of market flexibility by more efficient and effective
management of broader product range, combined with shorter delivery times and better
customer service; for WINI towards the final
customers and for Veyhl towards its b2b customers. The WINI-Veyhl SCM-solution is a pilot
case which is planned to be extended to other
business partners too.
GERMANY
© The e-Volution II consortium
page 97/113
ITALY
(Chair district)
WP 1
EXTENDED
ENTERPRISE
System requirement specification
BUSINESS
AREA
G1RD-CT-2002-00698
DESCRIPTION
STRATEGY AND GOALS
LOCATION
duction sites on the intra-enterprise
level.
Autev
Engineering and
service (electronics, informatics,
automation)
AUTEV AG is a group of legally independent micro and small enterprises.
AUTEV AG is the legal framework and
marketing and sales platform for common business activities. ICT is the enabler for collaborative work of AUTEV
partners.
The goal of this EE is the marketing and sales
GERMANY
of all in one hand engineering services in order
to compete with LSE on the market. Based on
contractual and legal framework, the partners
collaborate in dynamic project constellations.
ICT is an enabler for efficient business processes. The EE is open for further partners but
is not the guarantee for participation in common
projects. There is a competitive situation
among some partners because of similar competences and services.
PRÄMAB Präzisionsmaschinen und
Anlagenbau GmbH
& Co. KG
Machinery and
plant construction
sector.
The EE constellation covers the core
(research, implementation and operation) and supporting (sale, procurement, administration, ICT) processes
related to non vacuum electronic beam
technology in industrial practice.
The successful realisation is founded on a
knowledge and know-how network of final
manufacturers, technology developers and
plant engineers. The partners share and extend
their competences throughout the EE. The basis for the collaboration in the EE are:
- non-formal business agreement and constellation,
- common economic benefit,
- avoidance of competition,
- informal, non-bureaucratic behaviour,
- long-term perspective,
- confidence and personal relationships
Main benefit of the EE constellation is the reduction of costs for the partners.
GERMANY
Greschalux
Product maintenance service for
metal products
and equipment
This EE constellation is driven by the
Greschalux as the domination partner.
The other EE partners are subcontractors which are linked with Greschalux
by a common goal agreement and
shared IT-infrastructure, provided by
The aim of Greschalux is the optimisation the
internal organisation by means of subcontracting of non-core activities and the realisation of
a flexible b2b value chain constellation. In order
to guarantee a high service quality for the customer, business and business process reengi-
GERMANY
© The e-Volution II consortium
page 98/113
WP 1
EXTENDED
ENTERPRISE
System requirement specification
BUSINESS
AREA
© The e-Volution II consortium
G1RD-CT-2002-00698
DESCRIPTION
STRATEGY AND GOALS
Greschalux. The management of the
EE constellation is realised by an organisational change process, business
process standardisation and automation, in order to realise cost cuttings as
a result of outsourcing, although there
is an increased need for information
and communication.
neering is done. The extension of the workflow
and workflow management system to subcontractors is the basis for collaborative work.
page 99/113
LOCATION
WP 1
System requirement specification
G1RD-CT-2002-00698
9.2 Questionnaire about industrial requirements
General information about the interviewed EE partner
Legal information
Company legal name:
Legal status:
Short name:
 Privately owned companies  Collectively owned compa-  Joint venture companies
nies
Foundation:
Address
Country:
Web address:
Contact information
Title :
Gender :
Position:
Name:
First name:
Telephone:
Fax:
Email:
Comments:
Company information
Annual turno-  Up to 0.5 Mil €
ver
 Up to 5 Mil. €
Size:
 1 – 9 full time employees
 Up to 1 Mil. €
 Up to 2.5 Mil. €
 Up to 10 Mil. €
 Over 10 Mil. €
 10 – 49 full time employees
 50 – 249 full time employees
 250 – 499 full time employ-  > 499 full time employees
ees
Business information
Industry Type  Agriculture
 Manufacturing
 wholesale and retail trade
 Fishing
 Mining and quarrying
 Electricity, gas, water  construction
supply
 transport, storage and  Services
communication
 Others:
E-business status
 offline
 passive online user
 advanced user
 professional user
Operational IT systems
 office tools
 Controlling system:
 Management Information  Decision Support System  Business Intelligence (BI):
System (MIS):
(DSS):
 CRM:
 ERP:
 Administration systems:
 Others:
General information about the Extended Enterprise
EE information
 2 EE partners
© The e-Volution II consortium
 2 – 5 EE partners
 5 – 10 EE partners
page 100/113
WP 1
System requirement specification
G1RD-CT-2002-00698
 > 10 EE partners
EE business




Agriculture
Manufacturing
wholesale and retail trade
Others:
 Fishing
 Mining and quarrying
 Electricity, gas, water supply
 construction
 transport, storage and communication  Services
EE value chain
 procurement/sourcing
 marketing/sales
 service
 operation/manufacturing
 delivery
 administration
 logistics
 RTD
 other:
Extension degree
 information sharing
 other:
 integration of value adding processes
 integration of non-value adding processes
EE focus
 primary EE internal (business process view)
 primary EE external (market view)
EE benefit
 risks:
 output:
 costs:
 resources:
 equal partners
 else:
 standard services
 extended services
 standard products & services
 extended products & services
EE type
 dominated by one partner
EE output
 standard products
 extended products
EE market
 regional
 stable  dynamic
 national
 transparent  not transparent
 European
 known  unknown
 global
EE customer
 finishing industry
 retailer
© The e-Volution II consortium
 vendor
 other
 end user
page 101/113
WP 1
System requirement specification
G1RD-CT-2002-00698
EE marketing strategy
 innovation
 flexibility
 price
 other
 quality
Company’s position in EE
 leader
Leader behaviour:
 follower
Follower behaviour:
 else:
Company’s role in EE value chain
 b2b customer
 else:
 b2b supplier
 b2c supplier
EE stability
 short term collaborations; < 1 year
 permanent
 mid term collaborations; 1-2  long term collaborations; > 2 years
years
 dynamic/frequently
Framework for e-business implementation process in the EE
e-business project management in the EE
 central coordination for EE
Mechanisms and instruments:
 individual coordination
 formal process
 informal process
Requirement analysis on e-business life cycle PHASE I: IDENTIFICATION
Organisation view (responsibility)
 manager (owner, CEO)
 expert (specialist department):
 external consultant:
Process view (common practice)
 experiences
Tasks
 formal procedure used
Current success factors
 need for formalisation
Current failure factors
Resource view (methods, instrument, human skills and competences, etc.)
Resources
Current success factors
Current failure factors
Concrete requirements
Requirement analysis on e-business life cycle PHASE II: CONCEPTION
© The e-Volution II consortium
page 102/113
WP 1
System requirement specification
G1RD-CT-2002-00698
Organisation view (responsibility)
 manager (owner, CEO)
 expert (specialist department):
 external consultant:
Process view (common practice)
 experiences
Tasks
 formal procedure used
Current success factors
 need for formalisation
Current failure factors
Resource view (methods, instrument, human skills and competences, etc.)
Resources
Current success factors
Current failure factors
Concrete requirements
Requirement analysis on e-business life cycle PHASE III: REQUIREMENTS
Organisation view (responsibility)
 manager (owner, CEO)
 expert (specialist department):
 external consultant:
Process view (common practice)
 experiences
Tasks
 formal procedure used
Current success factors
 need for formalisation
Current failure factors
Resource view (methods, instrument, human skills and competences, etc.)
Resources
Current success factors
Current failure factors
Concrete requirements
© The e-Volution II consortium
page 103/113
WP 1
System requirement specification
G1RD-CT-2002-00698
Requirement analysis on e-business life cycle PHASE IV: DESIGN
Organisation view (responsibility)
 manager (owner, CEO)
 expert (specialist department):
 external consultant:
Process view (common practice)
 experiences
Tasks
 formal procedure used
Current success factors
 need for formalisation
Current failure factors
Resource view (methods, instrument, human skills and competences, etc.)
Resources
Current success factors
Current failure factors
Concrete requirements
Requirement analysis on e-business life cycle PHASE V: IMPLEMENTATION
Organisation view (responsibility)
 manager (owner, CEO)
 expert (specialist department):
 external consultant:
Process view (common practice)
 experiences
Tasks
 formal procedure used
Current success factors
 need for formalisation
Current failure factors
Resource view (methods, instrument, human skills and competences, etc.)
Resources
Current success factors
Current failure factors
Concrete requirements
9.3 Questionnaire about software requirements
There are three sections in this questionnaire:
1.
Extended Enterprise structure and relationships, which aims at providing an overview of
the Extended Enterprise and the relations between the involved partners.
2.
Information and communication infrastructure (ICT), which has got these three further
sections;

ICT prerequisites;
© The e-Volution II consortium
page 104/113
WP 1
System requirement specification

Web and Communication

ICT infrastructure and business processes
G1RD-CT-2002-00698
3.
Requirements regarding a new support decision tool (e-Vo tool kit), which has got these
two further sections;

Organisation (ORG);

e-business (EBS).
The ICT section aims at understanding :
 the ICT infrastructure inside the EE;
 how the technological resources are used;
 the short term perspectives,
 the technological sectors of interests.
The questions about ORG (section 2) aim at understanding the firm organisation, the staff
composition and the investment in the ICT sector.
The questions about EBS (section 2) aim at understanding what kind of software the firm uses in order to define e-business strategies and, if the firm is interested in a software that support the
development of e-business strategies inside the EE (e-vo tool kit).

The systematic analysis of the answers about ORG and EBS together with the answers of the other sections will provide useful information about the ICT and e-business level of
the EE; moreover, some of the questions in the ICT section and in the EBS section could suggest
further considerations about the lack of an advanced ICT infrastructure and a relevant e-business
philosophy especially in regard to the strategy definition process .
Legal INFORMATION
Title:
Gender:
Function:
Family name:
Telephone:
First Name:
Fax:
E-mail:
Comments:
Extended Enterprise structure and relationships
Supply
Chain Ranking
Structure
Customer (Please
© The e-Volution II consortium
PercentEntity Type
age
of
sales
Share
mation
Infor- Process Integration
page 105/113
WP 1
System requirement specification
fill in the infor- 1
mation of your top
3 customers in
terms of percentage of sales)
2
%
G1RD-CT-2002-00698
Local SME
Yes
No
Yes
No
Yes
No
Yes
No
Yes
No
Yes
No
Local Large
Foreign
%
Local SME
Local Large
Foreign
3
%
Local SME
Local Large
Foreign
What Processes do you integrate with your
customers? (multiple answers)
What information do you share with your
customers in the EE?
(multiple answers)
Marketing/Sales (CRM)
None
Plan
Enable
Return
Logistics/Source
Others
Service
Real time information on sales
demand forecast
Available inventory
Production plan
Product design
Product introduction
Other
Supply
Chain
Structure - Supplier (Please fill in
the information of
your top 4 Supplier in terms of percentage of purchase)?
Ranking
Percentage Entity Type
of Purchase
1
%
Share
mation
Local SME
Infor- Process
gration
Inte-
Yes
No
Yes
No
Yes
No
Yes
No
Yes
No
Yes
No
Local Large
Foreign
2
%
Local SME
Local Large
Foreign
3
%
Local SME
Local Large
Foreign
Which processes do you integrate with
your suppliers in the EE?
Procurement
(multiple answers)
Plan
Enable
RTD
Other
What information do you share with your
suppliers?
Logis-
Other
tics/Deliver
Return
Production Schedule
Production capacity
Production plan
(multiple answers)
© The e-Volution II consortium
Product design
page 106/113
WP 1
System requirement specification
G1RD-CT-2002-00698
Available inventory
Demand forecast
Others
Information and communication Technology (ICT) infrastructure
ICT PREREQUISITES
What is the level of ICT penetra- 
EE wide Low IT penetra- 
EE wide IT penetration
tion within EE?
tion
mainly in administrative and
planning departments

EE wide IT penetration 
Networked architecture,
down to shop floor level
that involves all EE business
processes
 Comments:
EE IT network architecture (mul- 
tiple choice)?
No

Intranet
extranet

internet
How do you exchange infor- 
mation inside the EE?
Fax

Legacy System

Modem

Web based application

Email and attachments

Commercial software

Telephone

Others

Others

(Multiple Answer)
Do you prefer
ASP solutions
Yes
No
Yes
No
Yes
No
 Self-made SW
Yes
No
 Buying SW
Yes
No
e-business on demand
 SW
leasing/renting
EE hardware strategy
Your Network and IT equipment
for EE system integration have 
been provided and installed
Buy
by a single vendor
Leasing
Other

by multiple vendors, each
one responsible for different
subsystems. There is a specific integrator, responsible
for the maintenance and efficient data exchange between
these subsystems
by multiple vendors. Some 
by multiple vendors. Sub(or all) subsystems do not exsystems communicate with
change data each other
each other, without a specific
integrator
by yourself

others:

Software architecture adopted:
© The e-Volution II consortium

Stand-alone.

Client/server based
page 107/113
WP 1
System requirement specification

Web based
G1RD-CT-2002-00698

other:
What kind of operating systems does your  0 - no relevance, 1 – least important, 5 - most imcompany use and what is its extension
portant
 Windows
 0
 Linux
 0
 Unix
 0
 Others:
 0
Do you use a single database or 
a repository in your EE?

Single database

Repository: a place from
which specific databases
are obtained for further relocation or distribution in a
network
None (please specify how 
do you replace the functions of
a database)
Specify the vendor of the data- 
base used? (multiple choice)
Oracle

SQL Server

DB2

INFORMIX

Access26
 Other:

Web and communication in the EE
Has the EE in which you take part in its 
own enterprise portal?

Yes
No
If yes, what kind of services does it offer?  0 - no relevance, 1 – least important, 5 - most important
 Information about the partners and
products
 0
 Customer service
 0
 e-contracting
 0
 Other services (e-mail, free sms, chat,
forum, …)
If yes, how is it managed?


 0
Internally

By an external service 
provider in hosting mode
By an external service
provider in housing mode
Others:

If yes, what language do you 
Only mother 
use for it?
language
26
Only English

Only Multilanguage
Access is a relational DBMS by Microsoft
© The e-Volution II consortium
page 108/113
WP 1
System requirement specification
G1RD-CT-2002-00698
Do you face communication 
Heterogeneity of the 
problems with your partners
communication
systems
(suppliers and customer) be(please specify)
cause of
Missing standards


Different
equipment
level
of
IT 
Others:
Do you have an “always on” internet 
connection?
Yes
Which of the following tools do you use 
for information security in your company? Do you make use of ....
Control of access to the computer system
Cryptography / data encryption
Vulnerability Assessment Tools
Firewalls
Security Training and Awareness Rising Activities
Intrusion Detection Systems
End-user Security Training Class
(multiple answers)
© The e-Volution II consortium

No
page 109/113
WP 1
System requirement specification
G1RD-CT-2002-00698
ICT infrastructure and EE business processes
What are EE wide ICT supported busiYes
ness processes ?
No
No, but planned in the next two
years
Infrastructure/planning process
Procurement process
Sourcing process (incl. ordering, warehousing)
Making process
scheduling)
(incl.
planning
and
Delivery process
Return process
Marketing/sales process (CRM, sales, …)
Administration (HRM, PM, budgeting, ...)
What is the implementation level of these
software in your EE? (specify the soft-  Low27
ware used)
 Medium28
 High29
 Office applications.
 Software:
 e-procurement.
 Software:
 Human resource planning.
 Software:
 Production planning.
 Software:
 Financials.
 Software:
 Supply Chain Management.
 Software:
 e-commerce.
 Software:
 Customer Relationship Management.
 Software:
 Sales automation.
 Software:
 Others:
27
Business process partially enabled by a standard software (low process integration)
Business process enabled by a standard software (standard process integration)
29 Business process enabled by a specific customized software (high process integration/automation)
28
© The e-Volution II consortium
page 110/113
WP 1
System requirement specification
What is the expected benefit of ebusiness in the EE?
G1RD-CT-2002-00698
Better process
Better process
effectiveness
efficiency (doing
(doing the things
the right things)
right)
Both of them
Requirements regarding a new support decision tool (e-Vo tool kit)
 ORGANIZATION (ORG)
Who has access to the relevant
data from the market through 
internet?
management level

total staff
 specific personnel:
There is skilled personnel for: 
(multiple choice)
Please specify if the skilled personnel is internal or external to
your firm for each category.
Managing the network

Internal

External

Database maintenance

Maintenance of SW and
HW

Internal

External

Software development

Internal

Internal

External

External

Web mastering

Internal

External
How many ICT employees have

you got? (multiple choice)
1 – 3 internal employees

1 – 3 external employees

4 – 8 internal employees

4 – 8 external employees

How do you train your staff on 
ICT? (multiple choice)

More than 8 internal em- 
More than 8 internal employees
ployees
Learning by doing

Not trained (expert per- 
sonnel)
Training on demand
E-learning
 Others:
Do
you
have
and
use

knowledge management systems?

Yes
No
 If yes for which tasks?

What is the level of acceptance 
Highly accepted (all nec- 
Partly accepted (formal
of ICT in your company?
essary information available
and informal information proin the IT system)
cesses, personalised know
how)

Not accepted (no current data available in the system)
What kind of requisites should a Decision  0 – no relevance, 1 - least important, 5 - most imSupport System (DSS) have?
portant
© The e-Volution II consortium
page 111/113
WP 1
System requirement specification
 Low price (license or purchase costs)
G1RD-CT-2002-00698
0
 Plug and play (implementation and
0
customisation costs)
 Easy to use (training, interface, logic)
0
 Compatibility (standardised interfaces
and file exchange formats)
0
 Technological innovation
0
 After sales services
0
 Famous brand
0
What functionalities do you ex- 
pect of DSS tools? (multiple
choice)
Provision of guidelines 
(methods, tools data base)

Prospective analysis

Interaction of creative 
methods and analytical tools
Automated workflow

(multiple answers)
Retrospective analysis
Reduced
complexity
and modularity of tasks

Knowledge management


Reporting
 Others:
How much is your average IT  % of operating expenditures:
budget per year?
 % sw
% hw
Monitoring, controlling,
benchmarking
% EE Infrastructure
E-BUSINESS (EBS)
What kind of tools do you use 
for market survey in internet?

Search engine
Information content service
provider (e.g. portal)
 Others:
Do you already use commercial
software for market and compet- 
itor analysis?

 If yes, what application do
Yes
you use? For what purposes?
Where are the gaps?
No

Does your company use CRM

software for?

Do you use controlling software

for the EE business processes?

Do you use only data stored in
your database to define busi
ness strategies?
Administration and re- 
Processing customer data
trieving customer data
in order to develop optimised
customer oriented strategies
Both
No
If yes, what application do
you use? Where are the gaps?

No,
pur- 
No, othchased data
er sources
What kind of tool kit does your EE use in order to
support an e-business strategy?
© The e-Volution II consortium

Yes
Custom

Yes, 
Yes,
without proafter processing
cessing
Commercial
Others
page 112/113
WP 1
System requirement specification
G1RD-CT-2002-00698
What kind of problems, limitations and/or advantages have you found?

What do you think about tool kit

that can help you to develop
better e-business strategies for

you and your EE partners?
Not interested
Quite interested

A little inter- 
Very Interestested
ed

Interested

Why?
Are you interested in the following ways
Stand alone yes
of making use of such tools?
What are the reasons
that hindered the application of e-business in your
extended enterprise in
the past?
(multiple answers)
Yes
No
Client/server
Yes
No
Web based
Yes
No
Others:
Yes
No
No identified need
Low
acceptance
by EE partners
no EE wide common strategy
Doesn’t fit
with
the
products
Doesn’t fit with the
processes
Do not have conceptual
know-how to create winning
e-business strategy
ICT interface problems
Costs
Low security standards
Low
acceptance
by customers
Little acceptance
by users
Do not have adequate technological know-how to implement e-business
Others:
© The e-Volution II consortium
page 113/113