Noter til B1:
FUNDAMENTALS
Danneels, E. (2004). Disruptive Technology Reconsidered: A Critique and
Research Agenda.
E-BUSINESS MODELS
Seddon, P. B., & Lewis, G. P. (2003). Strategy and business models: What's the
difference.
Krstov, L., & !inkovec, U. (2003). Relations between Business Strategy, Business
Models and E-Business Applications.
Hedman, J., & Kalling, T. (2003). The business model concept: theoretical
underpinnings and empirical illustrations.
Rappa, M. A. (2004). The utility business model and the future of computing
services.
O’Reilly, T. (2007). What is Web 2.0: Design patterns and business models for the
next generation of software.
E-STRATEGY
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Corporate Strategy is concerned with the overall purpose and scope of the organization
Business Unit Strategy defines how to compete within particular markets
Operational strategies are concerned with achieving a business unit and a corporate strategy
Functional strategy describe how the corporate and business unit strategies will be operationalized
in different functional areas or business processes.
o A strategy is “The pattern or plan that integrates an organizations major goals, policies and
actions into a cohesive whole” (Quinn, 1991). In other words, what separates strategy from
business models is that a strategy is more specific by pointing out different key objectives
and provides a plan that describes how to achieve these objectives.
Usually an e-business strategy isn’t seen as a strategy in itself but rather as an element of corporate
strategy (Cisco, Dell, HSBC, easyJet, General Electrics etc.).
o Implications may occur if an e-business strategy isn’t clearly defined e.g.
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Missed opportunities from lack of evaluation of opportunities or insufficient
resourcing of e-business initiatives. These will result in more savvy competitors
gaining a competitive advantage
 Inappropriate direction of e-business strategy (poorly defined objectives, for
example, with the wrong emphasis on buy-side, sell-side or internal process
support)
 Limited integration of e-business at a technical level resulting in silos (separate
organizational team with distinct responsibilities which does not work in an
integrated manner with other teams) of information in different systems;
 Resource wastage through duplication of e-business development in different
functions and limited sharing of best practice. For instance, each business unit or
region may develop a separate web site with different suppliers without achieving
economies of scale
o It’s a common notion that an e-business strategy should support functional marketing and
supply chain management strategies however the e-business strategy should not only
support them, but should also influence them
E-channel strategies define specific goals and approaches for using electronic channels. This is to
prevent simply replicating existing processes through e-channels, which will create efficiencies but
will not exploit the full potential for making an organization more effective through e-business.
o E-channel strategies also need to define how electronic channels are used in conjunction
with other channels – a so-called multi-channel e-business strategy, which defines how
different marketing and supply chain channels should integrate and support each other in
terms of their proposition development
o E-business also defines how an organization gains value internally from using networks,
intranets etc.
A strategy process model provides a framework that gives a logical sequence to follow to ensure
inclusion of all key activities of e-business strategy development. It also ensures that e-business
strategy can be evolved as part of a process of continuous improvement.
Lynch (2000) distinguishes between two approaches:
o A prescriptive strategy approach where strategic analysis, strategic development and
strategy implementation are linked together sequentially. (The elements in this approach
are structured annual or six-monthly budgeting process or a longer-term 3-year rolling
marketing planning process).
o An emergent strategy approach where strategic analysis, strategic development and
strategy implementation are interrelated (used on shorter time scales when there’s a need
for rapid responses to marketplace dynamics).
 Strategic analysis involves analysis of:
 The internal resources and processes of the company to assess its ebusiness capabilities.
 The immediate competitive environment (micro-environment), including
customer demand and behavior, competitor activity, marketplace structure
and relationships with suppliers, partners and intermediaries
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The wider environment (macro-environment) in which a company
operates; this includes economic development and regulation by
governments in the form of law and taxes together with social and ethical
constraints such as the demand for privacy.
 Resource analysis is primarily concerned with its e-business capabilities, i.e. the
degree to which a company has in place the appropriate technological and
applications infrastructure and financial and human resources to support it.
Quelch and Klein (1996) developed a five-stage model referring to the development of sell-side ecommerce. It’s still relevant today, particularly for existing small and medium enterprises (SMEs).
o Image and product information: a basic “brochureware” web site or presence in online
directories
o Information collection: enquiries are facilitated through online forms
o Customer support and service: “web self-service” is encouraged through frequently asked
questions and the ability to ask questions through a forum or online
o Internal support and service: a marketing intranet is created to help with support process;
o Transactions: financial transactions such as online sales where relevant or the creation of
an e-CRM system where customers can access detailed product and order information
through an extranet.
 Chaffey et al. (2009) suggests 6 choices for a company deciding on which marketing
services to offer via an online presence:
 No website presence
 Basic web presence: advertises on the web, but does not own a webpage
 Simple static informational web site: product information (brochureware)
 Simple interactive site: users are able to make queries to retrieve info
 Interactive site supporting transactions: usually limited to online buying
 Fully interactive: provides relationship marketing and marketing exchanges
 Considering buy-side e-commerce, the corresponding levels of product sourcing
applications can be identified (see chapter 6 (BHP case)):
 No use of web
 Review and selection from competing suppliers (B2B, B2C and C2C)
 Orders placed electronically through EDI via intermediaries, exchanges or
supplier sites. No integration between organization’s system and supplier’s
system
 Orders placed electronically with integration of company’s procurement
systems
 Orders placed electronically with full integration of company’s
procurement systems, manufacturing requirements planning and stock
control systems.
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SWOT analysisis a relatively simple yet powerful tool that can help organizations analyze their
internal resources in terms of strengths and weaknesses and match them against the external
environment in terms of opportunities and threats.
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Commoditization: The process whereby product selection becomes more dependent on price than
differentiating features, benefits and value-added services.
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Scenario-based analysis is a useful approach to discussing alternative visions of the future prior to
objective setting. It could include:
o One player in our industry becomes dominant through use of the Internet.
o Major customers do not adopt e-commerce due to organizational barriers.
o Major disintermediation occurs in our industry.
o B2B marketplaces do or do not become dominant in our industry.
o New entrants or substitute products change our industry.
SMART: Key performance indicators to measure the degree of an objective’s success (table 5.6 is an
example of SMART key measurements):
o Specific: is the object sufficiently detailed to measure real-world problems?
o Measurable: can a quantitative or qualitative attribute be applied
o Actionable: can the information be used to improve performance?
o Relevant: can the information be applied to the specific problem?
o Time-related: does the measure or goal relate to a defined timeframe?
Experienced e-commerce managers build conversion or waterfall models of the efficiency of their
web marketing to assist with forecasting future sales. Using this approach, the total online demand
for a service in a particular market can be estimated and then the success of the company in
achieving a share of this market determined. Conversion marketing tactics can then be created to
convert as many potential site visitors into actual visitors and then convert these into leads,
customers and repeat customers
o Conversion modeling should contain following main measures:
 Awareness efficiency: target web-users
 Attractability efficiency: number of individual visits
 Contact efficiency: number of active visitors (visitors coming back)
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 Conversion efficiency: number of purchases
 Retention efficiency: number of repurchases
A balanced scorecard can be used to translate visions and strategy into objectives. It includes
o Customer concerns. These include time (lead time, time to quote, etc.), quality,
performance, service and cost.
o Internal measures. Internal measures should be based on the business processes that have
the greatest impact on customer satisfaction: cycle time, quality, employee skills, and
productivity. Companies should also identify critical core competencies and try mto
guarantee market leadership.
o Financial measures. Traditional measures such as turnover, costs, profitability and return
on capital employed. For publicly quoted companies this measure is key to shareholder
value.
o Learning and growth: innovation and staff development. Innovation can be measured by
change in value through time (employee value, shareholder value, percentage and value of
sales from new products).
Choose the right strategy:
o Decision 1 (E-business channels): If the priorities are for the sell-side downstream channel,
as are objectives 1 to 3 in Table 5.6 (see above), then the strategy must be to direct
resources at these objectives.
 For a B2B company that is well known in its marketplace worldwide and cannot
offer products to new markets, an initial investment on buy-side channel upstream
channel e-commerce and value chain management may be more appropriate.
 It’s about getting the right mix between bricks and clicks. If you have a high online
revenue contribution and radical changes are required digital channels are
preferred, if you have a low online revenue contribution and your market doesn’t
demand radical changes bricks and mortar should be fine. Ask yourself how to
generate most value for the organization according to stakeholder preferences.
o Decision 2 (Market and product development): The market and product development
matrix (Figure 5.19) can help identify strategies to grow sales volume through varying what
is sold.
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Decision 3 (Positioning and differentiation): Chaston (2000) argues there are four options
for focus to position a company in an online market (the best position is a combination of
these excellences):
 Product performance excellence. Enhance by providing online product
customization.
 Price performance excellence. Use the facilities of the Internet to offer favourable
pricing to loyal customers or to reduce prices where demand is low (for example,
British Midland Airlines uses auctions to sell underused capacity on flights).
 Transactional excellence. A site such as software and hardware e-tailer Dabs.com
(www.dabs.com) offers transactional excellence through combining pricing
information with dynamic availability information on products listing number in
stock, number on order and when expected.
 Relationship excellence. Personalization features to enable customers to review
sales order history and place repeat orders, for example RS Components
(www.rswww.com)
 See page 305 (338 PDF) for six different e-business strategies suggested by
the industry analyst IDC Research.
o Attack e-tailing
o Defend e-tailing
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o E2E (end-to-end) integration
o Market creation
o Customer as designer
o Open-source value creation
o Decision 4 (Business and revenue models): Evaluating new models and approaches is
important since if companies do not review opportunities to innovate then competitors
and new entrants certainly will. Andy Grove of Intel famously said: “Only the paranoid will
survive”.
o Decision 5 (Marketplace restructuring): electronic communications offer opportunities for
new market structures to be created through following within a marketplace (this goes for
the both the sell- and the buy-side):
 Disintermediation (sell-direct): Traditionally sell through retail partners or offers
some products direct through an e-store.
 Reintermediation: Partner with new retailers or intermediaries
 Countermediation: Create online intermediary
o Decision 6 (Supply Chain Management capabilities): Supply Chain Management is about
optimizing the value chain by reviewing questions like:
 How should we integrate more closely with our suppliers, for example through
creating an extranet to reduce costs and decrease time to market?
 Which types of materials and interactions with suppliers should we support
through e-procurement?
 Can we participate in online marketplaces to reduce costs?
o Decision 7 (Internal knowledge management): Review of internal capabilities by answering
questions like:
 How can our intranet be extended to support different business processes such as
new product development, customer and supply chain management?
 How can we disseminate and promote sharing of knowledge between employees
to improve our competitiveness
o Decision 8 (Organizational resourcing): The organization should decide, which projects
they want to do themselves and which projects they want to be done by others. Some
solutions for task managing are:
 In-house division (integration, DIY)
 Joint-venture (mixed)
 Strategic partnership (mixed)
 Spin-off projects (separation, outsourcing)
 See page 311-312 (344-345 PDF) for different maturity models of ecommerce adoption.
Developing an IS (information system) strategy for e-business involves many different perspectives,
rather than a single perspective such as hardware technologies or applications to deploy e.g.:
o Business information strategy: How information will support the business. This will include
applications to manage particular types of business.
o IS functionality strategy: Which services are provided?
o IS/IT strategy: Providing a suitable technological, applications and process infrastructure.
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Traditionally investments in information systems have been categorized according to their
importance and contribution to the organization. For example, Robson (1997) describes four types
of BIS investment:
o Operational value investment: These investments are in systems that are key to the dayto-day running of the organization, such as transaction processing systems for processing
orders received by phone or a workflow system for managing booking staff training and
leave.
o Strategic value investment: Strategic investments will enhance the performance of a
business and should help in developing revenue.
o Threshold investment: These are investments in BIS that a company must make to operate
within a business. Investments may have a negative return on investment but are needed
for competitive survival.
o Infrastructure investment: These can be substantial investments which result in gain in the
medium-to-long term. Typically this includes investment in internal networks, electronic
links with suppliers, customers and partners and investment in new hardware such as
Client PCs and servers.
Productivity Paradox: Research results indicating a poor correlation between organizational
investment in information systems and organizational performance measured by return on equity.
Porter, M. E. (2001). Strategy and the Internet.
E-ENVIRONMENT
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SLEPT stands for Social, Legal, Economic, Political and Technological factors (some analysts add an
extra “E” and rename the model “PESTLE”)
o Social factors – these include the influence of consumer perceptions in determining usage
of the Internet for different activities.
 Cost of access. This is certainly a barrier for those who do not already own a home
computer: a major expenditure for many households. The other main costs are the
cost of using an ISP to connect to the Internet and the cost of using the media to
connect (telephone or cable charges). Free access would certainly increase
adoption and usage.
 Value proposition. Customers need to perceive a need to be online – what can the
Internet offer that other media cannot? Examples of value propositions include
access to more supplier information and possibly lower prices. In 2000, company
advertisements started to refer to ‘Internet prices’.
 Ease of use. This includes the ease of first connecting to the Internet using the ISP
and the ease of using the web once connected.
 Security. While this is only, in reality, a problem for those who shop online, the
perception generated by news stories may be that if you are connected to the
Internet then your personal details and credit card details may not be secure. It will
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probably take many years for this fear to diminish as using the Internet slowly
becomes established as a standard way of purchasing goods.
Fear of the unknown. Many will simply have a general fear of the technology and
the new media, which is not surprising since much of the news about the Internet
non-adopters will have heard will concern pornography, fraud and privacy
infringements.
A psychographic segmentation of customers can help organizations to better
understand different customers’ online behavior:
 Realistic enthusiasts: they typically like to see the product in real life
before making a purchase and they often consider that finding the product
to purchase is a difficult process.
 Confident shoppers: happy to use the Internet for the next time they want
to make a purchase. They lay on purchasing well-known brands.
 Carefree spenders: purchase from unknown companies and do not
consider that purchases should be restricted to well-known brands.
 Cautious shoppers: not likely to purchase goods through an online auction
and have concerns over the quality of products they purchase.
 Bargain hunters: buy from an unknown company or any web site as long as
it was the cheapest and is driven not by the convenience of the medium
but by price.
 Unfulfilled: Think online purchasing is too difficult and they think it takes
too long for products purchased online to be delivered.
o Important aspects of segmentation are for instance:
 Contact information (online forms, cookies etc.)
 Profile information (age, sex, social groups, company
characteristics and individual role for business customers)
 Platform usage information (type of computer, screen
resolution etc. (use tools like FeedJit etc.))
 Behavioral information on a single site (purchase history,
web analytics etc.)
 Behavioral information across multiple sites (access
multiple sites, responds to ads etc. (these tracking
methods are typically related to anonymous profiles by
using cookies, sessions or IP-addresses)).
Data controller: the person with responsibility for data protection
Data subject: the person whose individual data are held
Any company that holds personal data on computers or on file about customers or
employees must be registered with the data protection registrar (although there
are some exceptions which may exclude small businesses). This process is known as
notification and is based on eight data protection principles:
 Fairly and lawfully processed: “Personal data shall be processed fairly and
lawfully and, in particular, shall not be processed unless – at least one of
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the conditions in Schedule 2 is met; and in the case of sensitive personal
data, at least one of the conditions in Schedule 3 is also met.”
o
Processed for limited purposes: “Personal data shall be obtained only for
one or more specified and lawful purposes, and shall not be further
processed in any manner incompatible with that purpose or those
purposes”.
o This specifies that the minimum necessary amount of data is
requested for processing.
Adequate, relevant and not excessive: “Personal data shall be adequate,
relevant and not excessive in relation to the purpose or purposes for which
they are processed.”
o This specifies that the minimum necessary amount of data is
requested for processing. There is difficulty in reconciling this
provision between the needs of the individual and the needs of the
company. The more details that an organization has about a
customer, the better they can understand that customer and so
develops products and marketing communications specific to that
customer which they are more likely to respond to.
Accurate: “Personal data shall be adequate, relevant and not excessive in
relation to the purpose or purposes for which they are processed.”
o It is clearly also in the interest of an organization in an ongoing
relationship with a partner that the data is kept accurate and upto-date.
Not kept longer than necessary: “Personal data processed for any purpose
or purposes shall not be kept for longer than is necessary for that purpose
or those purposes.”
o It might be in a company’s interests to ‘clean data’ so that records
that are not relevant are archived or deleted, for example if a
customer has not purchased for ten years.
Processed in accordance with the data subject’s rights: “Personal data
shall be processed in accordance with the rights of data subjects under this
Act.”
o One aspect of the data subject’s rights is the option to request a
copy of their personal data from an organization; this is known as a
“subject access request”.
Secure: Appropriate technical and organizational measures shall be taken
against unauthorized or unlawful processing of personal data and against
accidental loss or destruction of, or damage to, personal data.
o This guideline places a legal imperative on organizations to prevent
unauthorized internal or external access to information and also its
modification or destruction.
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Not transferred to countries without adequate protection: “Personal data
shall not be transferred to a country or territory outside the European
Economic Area, unless that country or territory ensures an adequate level
of protection of the rights and freedoms of data subjects in relation to the
processing of personal data.”
o Transfer of data beyond Europe is likely for multinational
companies. This principle prevents export of data to countries that
do not have sound data processing laws. If the transfer is required
in concluding a sale or contract or if the data subject agrees to it,
then transfer is legal. Data transfer with the US is possible through
companies registered through the Safe Harbor scheme
(www.export.gov/safeharbor).
 Cold list: Data about individuals that are rented or sold by a third party.
 House list: Data about existing customers used to market products to encourage
future purchase.
 Types of cookies (Cookies are used for several things like identify individual users,
track what is in your basket as you order different products, web analytics, track
the number of times a particular computer user has been shown a particular
banner advertisement; they can also track adverts served on sites across an ad
network and retrieve their preferences from a database according to an identifier
stored in the cookie):
 Persistent cookies: Cookies that remain on the computer after a visitor
session has ended. Used to recognize returning visitors.
 Session cookies: Cookies used to manage a single visitor session.
 First-Party cookies: Served by the site you are currently using (typical for ecommerce sites). These can both be persistent and session cookies.
 Third-Party cookies: Served by another site to the one you are viewing
(typical for portals where an ad network will track remotely or where the
web analytics software places a cookie).
Legal and ethical factors – determine the method by which products can be promoted and
sold online. Governments, on behalf of society, seek to safeguard individuals’ rights to
privacy.
 Tax jurisdiction determines which country gets tax income from a transaction. In
2002 the European Council enacted two laws: Council Directive and Council
Regulation on how VAT was charges and collected for electronic services. These
laws helped European countries to be more competitive in e-commerce. The laws
implied:
 EU suppliers will no longer be obliged to levy VAT when selling products on
markets outside the EU
 The VAT rules for non-EU suppliers selling to business customers in the
Union (at least 90% of the market), will remain unchanged
 The UK VAT rules are as follows (see examples at page 231 (261 (pdf))):
o
o
If the supplier (residence) and the customer (source) are both in
the UK, VAT will be chargeable;
o Exports to private customers in the EU will attract either UK VAT or
local VAT;
o Exports outside the EU will be zero-rated (but tax may be levied on
imports);
o Imports into the UK from the EU or beyond will attract local VAT, or
UK import tax when received through customs (for which overseas
suppliers need to register);
o Services attract VAT according to where the supplier is located.
This is different from products and causes anomalies if online
services are created. For example, a betting service located in
Gibraltar enabled UK customers to gamble at a lower tax rate than
with the same company in the UK. This law has since been
reviewed.
Economic factors – variations in the economic performance in different countries and
regions affect spending patterns and international trade.
 E-economy (Booz Allen Hamilton, 2002): The dynamic system of interactions
between a nation’s citizens, the businesses and government that capitalize upon
online technology to achieve a social or economic good.
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Political factors – national governments and transnational organizations have an important
role in determining the future adoption and control of the Internet and the rules by which
it is governed.
 Shaped by the interplay between government agencies, public opinions, consumer
pressure groups and industry-backed organizations.
 The application of e-commerce technologies to government and public services.
The list below summarizes the types of actions that many governments are taking
to encourage e-business within their countries.
 Encouraging all sectors of the community to actively participate in the
information economy
 The government is working to provide more efficient communication
between businesses to help improve the productivity
 build public trust and confidence in going online, and addressing barriers to
consumer confidence in e-commerce and other areas of online content and
activity
 The use of new technologies for government information provision, service
delivery and administration has the potential to transform government.
 Provide research on the environmental variables that drive innovation and
growth in the information economy and underpin its future development
 Government bodies, represents the nation in world forums where
decisions are made that may affect national interests in the information
economy.
Technological factors – changes in technology offer new opportunities to the way products
can be marketed
 Hype Cycle: A graphic representation of the maturity, adoption and business
application of specific technologies (consists of 4 phases).
 Technology trigger
 Peak of inflated expectations
 Trough of disillusionment
 Slope of enlightenment
 Plateau of productivity
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Trott (1998) lists 9 factors that organizations need to keep in mind if they want to
be able to respond effectively and efficiently to technological innovation and
change:
 Growth orientation – a long-term rather than short-term vision
 Vigilance – the capability of environment scanning
 Commitment to technology – willingness to invest in technology
 Acceptance of risk – willingness to take managed risks
 Cross-functional cooperation – capability for collaboration across
functional areas
 Receptivity – the ability to respond to externally developed technology
 Slack – allowing time to investigate new technological opportunities
 Adaptability – a readiness to accept change
 Diverse range of skills – technical and business skills and experience
PMP (2008) describes four contrasting approaches to identifying new technologies
which may give a company a competitive edge if they are involved in
manufacturing or are looking to improve their supply chain effectiveness. These are
the four alternative approaches which apply to e-business technologies:
 Technology scouting: This involves individuals monitoring trends through
their personal network and technology scouting and then sharing them
through an infrastructure and process that supports information sharing.
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Crowdsourcing: facilitates access to a marketplace of ideas from
customers, partners or inventors for organizations looking to solve specific
problems
 Technology hunting: This is a structured review of new technology through
reviewing the capabilities of start-up companies. For example, British
Telecom undertakes a structured review of up to 1,000 start-ups to assess
relevance for improving their own capabilities.
 The organization use technology to auto-mate the process through
software such as Autonomy which searches for patterns indicating
potential technology solutions within patents, articles, journals,
technological reports and trend studies. A simpler approach is setting up a
keyword search for technologies through a free service such as Google
Alerts (www.google.com/alerts).
It may also be useful to identify how rapidly a new concept is being adopted. When
a product or service is adopted rapidly this is known as ‘rapid diffusion’.
Concerning implementation of new technology an organization can be considered
an innovator, a responder or a laggard (See Miles and Snow in Daft: Organization
Theory and Design).
Andersen, K. V., Björn-Andersen, N., & Dedrick, J. (2003). Governance initiatives
creating a demand-driven e-commerce approach: the case of Denmark.
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E-BUSINESS INFRASTRUCTURE
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E-business infrastructure refers to the combination of hardware such as servers and client PCs in an
organization, the network used to link this hardware and the software applications used to deliver
services to workers within the e-business and also to its partners and customers.
Below is e-business infrastructure illustrated as a five-layer model:
Internet Service Provider (ISP): A provider providing home or business users with a connection to
access the Internet. They can also host web-based applications.
o An alternative to ISPs is a hosting provider, which is a service provider that manages the
server used to host an organization web site and its connection to the Internet backbones.
Backbones: High-speed communications links used to enable Internet communications across a
country and internationally.
12 ways to use your intranet to cut your costs (Guidance from Internet Benchmarking Forum):
o Build bridges with internal customers: Business areas that are best placed to identify
inefficient processes and practices in their area, and then approach the intranet team for
help.
o Research users’ needs: The leaders in the field carry out research with the aim of building a
picture, for each of their main employee groups, of their working patterns, the processes
they follow and where the frustrations, blockages and inefficiencies lie.
o Implement or expand self-service: This is enabling administrative processes to be
reengineered.
o Target further design, print and distribution savings: Reduction in physical and distribution
costs
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o
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o
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Improve usability
Revamp HR content: Used to indicate inefficiency
Create content for customer-facing staff
Create internal helpdesk content: Costs of internal helpdesks for example, for IT, HR or
Finance can be delivered more efficiently via the intranet.
o Enhance the employee directory: “A good people search can be a killer app!”
o Put senior leaders online for better communication
o Leverage online meetings
o Measure savings
An extranet is a computer network that allows controlled access from the outside, for specific
business or educational purposes. In a business-to-business context, an extranet can be viewed as
an extension of an organization's intranet that is extended to users outside the organization,
usually partners, vendors, and suppliers, in isolation from all other Internet users. In contrast,
business-to-consumer (B2C) models involve known servers of one or more companies,
communicating with previously unknown consumer users. An extranet is similar to a DMZ in that it
provides access to needed services for channel partners, without granting access to an
organization's entire network.
Middleware is software used to facilitate communications between business applications including
data transfer and control. Also referred to as enterprise application integration.
Firewalls are usually created as software mounted on a separate server at the point where the
company is connected to the Internet. Firewall soft-ware can then be configured to only accept
links from trusted domains representing other offices in the company.
Below is an illustration of firewall positions within the e-business infrastructure of a B2B company
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HTTP Error Requets:
o 200: OK, standard for successful request.
o 301: Moved permanently, permanent redirection
o 302: Found (moved temporarily)
o 304: Not modified (The page hasn’t been modified since last requested by the browser)
o 404: Not found, special pages should be constructed to handle this issue
o 500: Internal server error, the server cannot respond due to an error
IPTV: Internet protocol television is a Digital television service, which is delivered using Internet
Protocol, typically by a broadband connection. IPTV can be streamed for real-time viewing or
downloaded before playback.
TCP/IP: The Transmission Control Protocol is a transport-layer protocol that moves data between
applications. The Internet Protocol is a network-layer protocol that moves data between host
computers. Four rules highlight the operation of the TCP/IP protocol
o Distinct networks would be able to communicate with seamlessly with other networks
o
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If a data packet did not reach the final destination, it would be retransmitted from the
source
o Black boxes (known as routers and gateways) would be used to connect the networks and
no information would be retained by the gateways.
o There would be no global control of transmissions – these would be governed by the
requester and sender of information.
 The TCP/IP Protocol is part of a larger model: Open Systems Interconnection (OSI)
OSI is a set of standards. When implemented in software these different layers of standards are
referred to as a “protocol stack”. This Protocol Stack consists of seven layers:
o Application: Executable programs like browsers etc.
o Presentation: Usually part of the operation system
o Session: Includes data-transfer protocols such as SMTP, HTTP, and FTP etc.
o Transport: Ensures the integrity of data transmitted e.g. TCP and Novel SPX
o Network: Defines protocols for opening and maintaining links between servers e.g. IP
o Data Link: Defines the rules for sending and receiving information
o Physical: Low-level description of physical transmission methods
 See page 170 – 171 (pdf) for an explanation of how the layers work together
HTTP (Hypertext Transfer Protocol): An internet standard that allows browsers and servers to
transfer requests for delivery of webpages. In 1999 Tim Berners-Lee (the inventor) describes HTTP
as follows: “HTTP rules define things like which computer speaks first, and how they speak in turn.
When two computers agree they can talk, they have to find a common way to represent their data
so they can share it”.
URL (Universal resource locator): a standard method of addressing, similar to postcodes or ZIP
codes that make it straightforward to find the name of a site.
Domain name: The domain name refers to the name of the web server and is usually selected to be
the same as the name of the company, and the extension will indicate its type or location.
o Distinguish between top level-domain and sub level-domain
HTML (Hypertext markup language): A standard web-page presentation format used to define the
text and layout of web pages.
Open-source software: Is developed collaboratively, independent of a vendor, by a community of
software developers and users.
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Microblogging: Publishing of short posts through services such as Twitter.com and Tumblr.com.
Dial-up connection: Access to the Internet via phone lines using analogue modems
Broadband connection: Access to the Internet via phone lines using a digital data transfer
mechanism such as ADSL (Asynchronous Digital Subscriber Line)
Bandwidth indicates the speed at shich data are transferred and is measured in bits per second
(bps).
Enterprise Resource Planning Systems (ERP): Software providing integrated functions for major
business functions such as production, distribution, sales, finance and human resources
management.
Web services: Business applications and software services are provided through Internet and web
protocols with the application managed on a separate server from where it is accessed through a
web browser on an end-user’s computer (e.g. Software as a service (SaaS)).
o Multi-tenancy SaaS: A single instance of a web service is used by different customers
(tenants) run on a single or load-balanced across multiple servers. Customers are
effectively sharing processor, disk usage and bandwidth with other customers.
o Single Tenancy SaaS: A single instance of an application (and/or database) is maintained for
all customers (tenants) who have dedicated resources of processor, disk usage and
bandwidth. The single instance may be load-balanced over multiple servers for improved
performance.
o Another web service is “Utility computing”: IT resources and in particular software and
hardware are utilized on a pay-per-use basis and are managed externally as ‘managed
services’. This is also referred to as ASP (application service provider).
Cloud Computing: The use of distributed storage and processing on servers connected by the
Internet, typically provided as software or data storage as a subscription service provided by other
companies.
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The technical architecture used to build web services is formally known as a ‘service-oriented
Architecture’ (SOA). This is an arrangement of software processes or agents which communicate
with each other to deliver the business requirements. The main role of a service within SOA is to
provide functionality. This is provided by three characteristics:
o An interface with the service which is platform-independent, so instructions and returned
results can be exchanged between services (løskoblet softwarearkitektur).
o The service can be dynamically located and invoked, so one service can query for the
existence of another service through a service directory.
o The service is self-contained and cannot be influenced by other services
Electronic Data Interchange: The exchange, using digital media, of structured business information,
particularly for sales transactions such as purchase orders and invoices between buyers and sellers.
o E.g. financial EDI is the aspect of electronic payment mechanism involving transfer of funds
from the bank of a buyer to the bank of a seller. And EFT (Electronic funds transfer) is
automated digital transmission of money between organizations and banks.
o In short DTI describes: Electronic data interchange (EDI) is the computer-to-computer
exchange of structured data, sent in a form that allows for automatic processing with no
manual intervention. This is usually carried out over specialist EDI networks.
o Internet EDI: The use of EDI data standards delivered across non-proprietary IP networks.
Value-added network (VAN) is a secure wide-area network that uses proprietary rather than
Internet technology.
Virtual Private Networks (VPN): A secure, encrypted (tunnelled) connection between two points
using the Internet, typically created by ISPs for organizations wanting to conduct secure Internet
trading.
Marketing messages are delivered in real time according to customers’ presence based on the
technology they are carrying, wearing or have embedded.
o Bluecasting involves messages being automatically pushed to a consumer’s Bluetoothenabled phone or they can pull or request audio, video or text content to be downloaded
from a live advert.
o Bluejacking: Sending a message from a mobile phone or transmitter to another mobile
phone which is in close range via Bluetooth technology
Weill, P., Subramani, M., & Broadbent, M. (2002). IT Infrastructure for Strategic
Agility
E-MARKETING
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There are 3 operational processes in e-marketing:
o Customer acquisition: Attracting visitors to a web site or promoting a brand through
reaching them via search engines or advertising on other sites.
o Customer conversation: Engaging site visitors to achieve the outcomes the site owner
seeks such as leads, sales or browsing of other content. Developing a satisfactory customer
experience is vital to this.
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Customer retention and growth: Encouraging repeat usage of digital channels and for
transactional sites, repeat sales.
SOSTAC™ is a framework developed by Paul Smith (1999) and this summarizes the different stages
that should be involved in a marketing strategy:
o Situation – where are we now?
o Objectives – where do we want to be?
o Strategy – how do we get there?
o Tactics – how exactly do we get there?
o Action – what is our plan?
o Control – did we get there?
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A demand analysis for e-commerce consists of questions like
o What percentages of customer businesses have access to the Internet?
o What percentages of members of the buying unit in these businesses have access to the
Internet?
o What percentages of customers are prepared to purchase your particular product online?
o What percentage of customers with access to the Internet are not prepared to purchase
online, but are influenced by web-based information to buy products offline?
o What is the popularity of different online customer engagement devices such as Web 2.0
features such as blogs, online communities and RSS feeds?
o What are the barriers to adoption amongst customers of different channels and how can
we encourage adoption?
Competitor analysis – benchmarking competitors has different purposes:
o Review of internal capabilities: such as resourcing, structure and processes vs external
customer facing features of the sites.
o From core proposition through branding to online value proposition (OVP). The core
proposition will be based on the range of products offered, price and promotion.
o Different aspects of the customer lifecycle: customer acquisition, conversion to retention.
o Qualitative to quantitative: from qualitative assessments by customers through surveys and
focus groups through to quantitative analysis by independent auditors of data across
customer acquisition
o
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In-sector and out-of-sector: benchmarking against similar sites within sector and reviewing
out of sector to sectors which tend to be more advanced, e.g. online publishers, social
networks and brand sites. Benchmarking services are available for this type of comparison
from analysts such as Bowen Craggs & Co (www.bowencraggs.com).
o Financial to non-financial measures. Through reviewing competitive intelligence sources
such as company reports or tax submissions additional information may be available on
turnover and profit generated by digital channels.
o From user experience to expert evaluation. Benchmarking research should take two
alternative perspectives, from actual customer reviews of usability to independent expert
evaluations.
Intermediary analysis – Questions which are answered by analysis of intermediaries are:
o Do competitors have any special sponsorship arrangements and are micro-sites created
with intermediaries? The other main aspect of situation analysis for intermediaries is to
consider the way in which the marketplace is operating. To what extent are competitors
using disintermediation or reintermediation? How are existing channel arrangements being
changed?
STPP: Segmentation, Targeting, Positioning, Planning:
Having a clear online value proposition has several benefits:
o It helps distinguish an e-commerce site from its competitors
o It helps provide a focus to marketing efforts and enables company staff to be clear about the
purpose of the site
o
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If the proposition is clear it can be used for PR and word-of-mouth recommendations made
about the company.
o It can be linked to the normal product propositions of a company or its product
The 6 Is (what seperates traditional media from digital media):
o Interactivity (Traditional: push, Digital: push and pull)
o Intelligence (The Internet can be used as a relatively low-cost method of collecting marketing
research, particularly about customer perceptions of products and services.)
o Individualization (Digital media can be tailored to the individual, unlike traditional media where
the same message tends to be broadcast to everyone)
o Integration (How does the Internet complement other channels in communication of
proposition for the company’s products and services to new and existing customers and how
can the Internet complement other channels to deliver customer service to these customers)
o Industry restructuring (Disintermediation, reintermediation and countermediation are key
concepts of industry restructuring)
o Independence of location (The internet gives opportunities to sell into international markets
that may not have been previously accessible)
The 4 Cs (The 4 Ps from a customer’s perspective):
o Customer needs and wants (Product)
o Cost to the customer (Price)
o Convenience (Placement)
o Communication (Promotion)
The 3 extra Ps:
o People: the delivery of service to customers during interactions with customers. For the online
part of an organization the “people-element” can be replaced by some of these options:
 Autoresponders
 E-mail notification
 Callback facility
 FAQs
 On-site search engines
 Virtual assistants
o Process: the methods and procedures companies use to achieve all marketing functions
o Physical evidence: The tangible expression of a product and how it is purchased and used.
Price elasticity: Measure of consumer behavior that indicates the change in demand for a product or
service in response to changes in price: 𝑒𝑙𝑠𝑡𝑖𝑐𝑖𝑡𝑦 =
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% 𝑐ℎ𝑎𝑛𝑔𝑒 𝑖𝑛 𝑞𝑢𝑎𝑛𝑡𝑖𝑡𝑦 𝑖𝑛 𝑑𝑒𝑚𝑎𝑛𝑑
% 𝑐ℎ𝑎𝑛𝑔𝑒 𝑖𝑛 𝑝𝑟𝑖𝑐𝑒
4 ways of setting the price:
o Increased price transparency and implications on differential pricing
o Downward pressure on price (including commoditization)
 Commoditization: The process whereby product selection becomes more dependent
on price than on differentiating features, benefits and value-added services.
o New pricing approaches (including dynamic pricing, auctions and aggregated buying)
 Dynamic pricing: Prices can be updated in real time according to the type of customer
or current market conditions.
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Aggregated buying: A form of customer union where buyers collectively purchase a
number of items at the same price and receive a volume discount
Alternative pricing structure or policies which is relevant especially for downloadable products
Hoffman, D. and M. Fodor (2010). Can You Measure the ROI of Your Social Media
Marketing?
Wilson, J. H., Guinan, P. J., Parise, S., & Weinberg, B. D. (2011). What’s Your Social
Media Strategy?
E-PROCUREMENT (414)
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E-BUSINESS SUPPLY CHAIN (364)
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Some benefits of supply chain management:
o To increase shareholder value
o New channels to market
o To improve management decisions
o Competitive pressures
o New products
o New clients
o Getting products to market faster
o To increase profits
o Cost cutting
o To improve service
Supply chain management (SCM) is the coordination of all supply activities of an organization from its
suppliers and partners to its customers.
Upstream supply chain is the transactions between an organization and its suppliers and
intermediaries, equivalent to buy-side e-commerce.
Downstream supply chain is transactions between an organization and its customers and
intermediaries, equivalent to sell-side e-commerce.
Supply chain network is the links between an organization and all partners involved in multiple supply
chains.
Efficient consumer response (ECR) is focused on demand management aimed at creating and satisfying
customer demand by optimizing product assortment strategies, promotions, and new product
introductions. It creates operational efficiencies and costs savings in the supply chain through reducing
inventories and deliveries.
Vendor-managed inventory (VMI): Supply chain partners manage the replenishment of parts or items
for sale through sharing of information on variations in demand and stocking level for goods used for
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manufacture or sale. VMI is a key concept in electronic supply chain and procurement management
which shifts the day-to-day tasks of stock management, purchasing and order tracking from the
customer to the supplier.
Inbound logistics: The management of material resources entering an organization from its suppliers
and other partners.
Outbound logistics: The management of resources supplied from an organization to its customers and
intermediaries such as retailers and distributors.
Historical developments in SCM:
o 1960/70’s: Physical distribution management (PDM) focused upon the physical movement of
goods by treating stock management, warehousing, order processing and delivery as related
rather than separate activities. However, some leading companies started using EDI at this
time.
o 1970/80’s: The just-in-time philosophy (JIT) is still a relatively recent development of logistics
management, its aim being to make the process of raw materials acquisition, production and
distribution as efficient and flexible as possible in terms of material supply and customer
service. Minimum order quantities and stock levels were sought by the customer and therefore
manufacturers had to introduce flexible manufacturing processes and systems that interfaced
directly with the customer who could call an order directly against a prearranged schedule with
a guarantee that it would be delivered on time.
o 1980/90’s: Efficient Consumer Response (ECR) means closer integration between the supplier,
customer and intermediaries and in some instances involved one organization in the channel
taking over functions that were traditionally the domain of the intermediary. Enterprise
resource planning (ERP) systems have helped manage the entire supply chain. ERP systems
include modules which are deployed throughout the business and interface with suppliers
through EDI or XML.
o 1990/00’s: Technological information management: Enterprise resource planning systems are
continuously being updated to support direct data interfaces with suppliers and customers, for
example to support EDI. Currently customers leave a trail of information behind them as they
visit sites and make transactions. This data can be captured and then used by suppliers and
agents to improve targeting of offers. However, as customers become more aware of the value
of information and as technology on the Internet enables them to protect private information
relating to site visits and transactions, then the opportunity grows for intermediaries to act as
customer agents and not supplier agents.
Push supply chain is a supply chain that emphasizes distribution of a product to passive customers
(from supplier to customer).
Pull supply chain is an emphasis on using the supply chain to deliver value to customers who are
actively involved in product and service specification (from customer to supplier).
A value chain is model that considers how supply chain activities can add value to products and services
delivered to the customer.
o Traditional value chain analysis distinguishes between primary activities that contribute directly
to getting goods and services to the customer and support activities which provide the inputs
and infrastructure that allow the primary activities to take place. Key weaknesses in the
traditional value chain mode:
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It is most applicable to manufacturing of physical products as opposed to providing
services.
 It is a one-way chain involved with pushing products to the customer; it does not
highlight the importance of understanding customer needs through market research
and responsiveness through innovation and new product development.
 The internal value chain does not emphasize the importance of value networks
Deise et al. (2000) suggests a revised form of the traditional value chain: This value chain starts
with the market research process, emphasizing the importance of real-time environment
scanning made possible through electronic communications links with distributors and
customers.
The value stream is a concept closely related to the value chain. The difference is that it considers different types of tasks that are involved with adding value and looks at how the
efficiency of these tasks can be improved.
A value chain is model that considers how supply chain activities can add value to products and
services delivered to the customer.
1. Assess the information intensity of the value chain. The higher the level of intensity and/or the
higher the degree of reliance on good-quality information, the greater the potential impact of
new information systems.
2. Determine the role of IS in the industry structure (for example, banking will be very different
from mining). It is also important here to understand the information linkages between buyers
and suppliers within the industry and how they and competitors might be affected by and
react to new information technology.
3. Identify and rank the ways in which IS might create competitive advantage (by impacting on
one of the value chain activities or improving linkages between them)
4. Investigate how IS might spawn new businesses
5. Develop a plan for taking advantage of IS. A plan must be developed which is business-driven
rather than technology-driven. The plan should assign priorities to the IS investments
A Porter’s original work considered not only the internal value chain, but also the external value chain
or value network (The links between an organization and its strategic and non-strategic partners that
form its external value chain.). Since the 1980s there has been a tremendous increase in out-sourcing
of both core value chain activities and support activities.
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Vertical integration is the extent to which supply chain activities are undertaken and controlled within
the organization.
Virtual integration is the majority of supply chain activities are undertaken and controlled outside the
organization by third parties. The intermediate situation is sometimes referred to as ‘vertical
disintegration’ or ‘supply chain disaggregation’.
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Information asymmetry: Imperfect information means sharing between members of a supply chain
which increases uncertainty about demand and pricing. ECR is an attempt to reduce information
asymmetry. Although information asymmetry can be reduced through the use of technology, technical
barriers such as the lack of standards, expertise or the cost of implementation will prevent it.
In economics, vendor lock-in, also known as proprietary lock-in or customer lock-in, makes a customer
dependent on a vendor for products and services, unable to use another vendor without substantial
switching costs. Lock-in costs which create barriers to market entry may result in antitrust action
against a monopoly.
Radio-frequency identification (RFID) is microchip-based electronic tags are used for monitoring
anything they are attached to, whether inanimate products or animate (people)
A key feature of a modern supply chain infrastructure is the use of a central operational database that
enables information to be shared between supply chain processes and applications. This operational
database is usually part of an enterprise resource planning system such as SAP, Baan or Prism and is
usually purchased with the applications for supply chain planning and execution.
Information needed by managers to intervene in the supply chain process when problems occur is
delivered as alerts or through continuous monitoring across secure private intranets or extranets used
to link to partners.
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The Global Data Synchronization Network (GDSN) is an internet-based, interconnected network of
interoperable data pools and a global registry known as the GS1 Global Registry, that enables
companies around the globe to exchange standardized and synchronized supply chain data with their
trading partners using a standardized Global Product Classification.
E-CRM (CUSTOMER RELATIONSHIP MANAGEMENT)
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The better you know customers the less it costs you to serve them
The 4 marketing activities the comprise CRM involve
o Customer selection: defining the customers the company wants to market to
 Who do we target
 What is their value
 What is their lifecycle
 Where do we reach them
o Customer acquisition: refers to marketing activities intended to form relationships with new
customers
 Target the right segments
 Minimize acquisition costs
 Optimize service quality
 Use the right channels
o Customer retention: refers to marketing activities taken by an organization to keep tis existing
customers
 Understand individual needs
 Offer relevant services
 Maximize service quality
 Use the right channels
o Customer extension: refers to increasing depth or range of products that a customer purchases
from a company
 Sense and respond
 Reselling (selling similar product to existing customers)
 Reactivation (sell products to customers who haven’t purchased for some time)
 Cross-selling (sell additional products which may be closely related to previously
purchased products)
 Up-selling (a subset of cross-selling but in this case selling more expensive products)
 Optimize service quality
 Use the right channels
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A CRM-system is made up of different marketing applications:
o Sales force automation (SFA): A tool to arrange and record customer enquiries and visits
o Customer service management: Respond to customer requests for information by using an
intranet to access databases containing information on the customer, products and previous
queries.
o Managing the sales process: Use SFA or e-commerce sites
o Campaign management: Managing ad, direct mail, e-mail and other campaigns
o Analysis: data warehousing and data mining are used to optimize the marketing mix
Personalization:
o Web-based personalization involves delivering customized content for the individual through
web pages, e-mail or push technology.
Mass customization:
o Mass customization is the creation of tailored marketing messages or products for individual
customers or groups of customers typically using technology to retain the economies of scale
and the capacity of mass marketing or production.
Customer-centric marketing:
o The approach to Internet marketing function is based on customer behaviour within the target
audience and then seeks to fulfil the needs and wants of each indi-vidual customer
Sense and respond communications:
o Delivering timely, relevant communications to customers as part of a contact strategy based on
assessment of their position in the customer lifecycle and monitoring specific interactions with
a company’s web site, e-mails and staff
A customer profile is information that can be used to segment a customer
Peppers and Rogers (1999) suggests the IDIC framework for using the web to build relationships
o
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Identification: identify each customer on their first visit and subsequent visits e-g- by using
cookies
o Differentiation: build a profile to help segmenting customers
o Interactions: provided on-site such as customer service questions, surveys etc.
o Customization: personalization or mass customization of content or e-mails according to the
segmentation achieved at the acquisition stage
The figure below is valuable in developing the right online marketing tactics to support each stage of
the process for each business
Net promoter score (NPS): A measure of the number of advocates a company (or web site) has who
would recommend it compared to the number of detractors.
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Referrer:
o The source of a web site visit, e.g. paid search, affiliate marketing, online advertising or
recorded as ‘no referrer’, i.e. when a URL is typed in directly.
Cost per acquisition (CPA):
o The cost of acquiring a new customer. Typically limited to the communications cost and refers
to cost per sale for new customers. May also refer to other outcomes such as cost per quote or
enquiry.
Allowable cost per acquisition
o A target maximum cost for generating leads or new customers profitably
Bounce rate
o Percentage of visitors entering a site who leave immediately after viewing one page only
(known as ‘single-page visits’)
𝑡𝑜𝑡𝑎𝑙 𝑠𝑎𝑙𝑒𝑠 𝑟𝑒𝑣𝑒𝑛𝑒𝑢𝑒 𝑔𝑒𝑛𝑒𝑟𝑎𝑡𝑒𝑑 𝑓𝑟𝑜𝑚 𝑟𝑒𝑓𝑒𝑟𝑟𝑒𝑟
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ROAS (Return on advertising spend) = 𝑇𝑜𝑡𝑎𝑙 𝑎𝑚𝑜𝑢𝑛𝑡 𝑠𝑝𝑒𝑛𝑡 𝑜𝑛 𝑎𝑑𝑣𝑒𝑟𝑡𝑖𝑠𝑖𝑛𝑔 𝑤𝑖𝑡ℎ 𝑟𝑒𝑓𝑒𝑟𝑟𝑒𝑟
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Traffic-building campaign:
o The use of online and offline promotion techniques such as banner advertising, search engine
promotion and reciprocal linking to increase the audience of a site (both new and existing
customers).
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Spiders or robots:
o Spiders are software processes, technically known as robots, employed by search engines to
index web pages of registered sites on a regular basis. They follow links between pages and
record the reference URL of a page for future analysis
The PPC ad networks detect multiple clicks from the same computer (IP address) and say they filter
them out. However, there are techniques to mimic multiple clicks from different locations such as
software tools to fake clicks and even services where you can pay a team of people across the world to
click on these links. It is estimated that in competitive markets one in five of the clicks may be fake.
While fake clicks can be monitored for and refunds obtained if proved, ultimately this could destroy
PPC advertising.
Online PR includes aspects like
o Communication with media journalists online
o Link building (external, internal and reciprocal)
o Blogs and social network relations
o Podcasts and other media
o Regular updates
o Online viral marketing (buzzing)
o RSS-feeds
o Online surveys and pools
Affiliate marketing:
o A commission-based arrangement where an e-retailer pays sites that link to it for sales, leads
(CPA-based) or less commonly visitors (CPC-based).
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Outbound e-mail marketing, where e-mail campaigns are used as a form of direct marketing to
encourage trial and purchases and as part of a CRM dialogue
Inbound e-mail marketing, where e-mails from customers such as support enquiries are managed.
These are often managed today in conjunction with chat and co-browsing sessions
Click-through rate: this is the number of people who click through on the e-mail of those delivered
(strictly unique clicks rather than total clicks)
House list:
o A list of prospect and customer names, e-mail addresses and profile information owned by
an organization
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Collaborative filtering:
o Profiling of customer interest coupled with delivery of specific information and offers, often
based on the interests of similar customers
Important questions to ask oneself when considering how to create a customer community:
o 1 What interests, needs or passions do many of your customers have in common?
o 2 What topics or concerns might your customers like to share with each other?
o 3 What information is likely to appeal to your customers’ friends or colleagues?
o 4 What other types of business in your area appeal to buyers of your products and
services?
o 5 How can you create packages or offers based on combining offers from two or more
affinity partners?
o 6 What price, delivery, financing or incentives can you afford to offer to friends (or
colleagues) which your current customers recommend?
o 7 What types of incentives or rewards can you afford to provide customers who
recommend friends (or colleagues) who make a purchase?
o 8 How can you best track purchases resulting from word-of-mouth recommendations from
friends?
 Avoid empty communities, silent communities and critical communities
RFM analysis: Recency (Recency of customer action, e.g. purchase, site visit, account access, e-mail
response, e.g. 3 months ago), Frequency (the number of times an action is completed in the period
of a customer action, e.g. purchase, visit, e-mail response, e.g. five purchases per year) and
Monetary value (The Monetary value of purchase(s) can be measured in different ways, e.g.
average order value or total annual purchase value)
o Propensity modeling is one name given to the approach of evaluating customer
characteristics and behavior, in particular previous products or services purchased, and
then making recommendations for the next suitable product.
NETWORK ECONOMICS AND LOCK-IN
Shapiro, C. and Varian, H.R. (1999). “Networks and Positive Feedback”
Shapiro, C. and Varian, H.R. (1999). “Recognizing lock-in”
Shapiro, C., & Varian, H. R. (1999). The art of standards wars.
CHANGE ENVIRONMENT
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Change management:
o Managing process, structural, technical, staff and culture change within an organization
Business transformation:
o
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Significant changes to organizational processes implemented to improve organizational
performance
The 7S framework for managing change environment:
Anticipatory change:
o An organization initiates change without an immediate need to respond
Reactive change
o A direct response by an organization to a change in its environment
The four different forms of organizational change identified by Nadler et al.(1995) are:
o Tuning: incremental change when there is no immediate need for change. Organization
processes are tuned when there’s a need for improvement.
o Adaption: incremental change due to external threat or opportunity
o Re-orientation: a radical change when there is no immediate need for change
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Re-creation: Fundamental/radical changes in the way a company operates due to threats
or opportunities
Business process management (BPM)
o An approach supported by software tools intended to increase process efficiency by
improving information flows between people as they perform business tasks
Business process re-engineering (BPR)
o Identifying radical, new ways of carrying out business operations, often enabled by new IT
capabilities
Business process improvement (BPI)
o Optimizing existing processes, typically coupled with enhancements in information
technology
Business process automation (BPA)
o Automating existing ways of working manually through information technology
Agile development:
o An iterative approach to developing software and web site functionality with the emphasis
on face-to-face communications to elicit, define and test requirements. Each iteration is
effectively a mini-software project including stages of planning, requirements analysis,
design, coding, testing and documentation
Scrum:
o Scrum is a methodology that supports agile software development based on 15–30-day
sprints to implement features from a product backlog. ‘Scrum’ refers to a daily project
status meeting during the sprint
Organizational Culture:
o This concept includes shared values, unwritten rules and assumptions within the
organization as well as the practices that all groups share. Corporate cultures are created
when a group of employees interact over time and are relatively successful in what they
undertake.
Birkinshaw J. and Goddard J. (2009). What is your Management Model?
ANALYSIS AND DESIGN (638)
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IMPLEMENTATION AND MAINTANANCE
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