1. 03.02.2003MS kap. 31 IT strategy – eBusiness (ch. 3 + more) IT strategy Business Process Reenginering (extended) eBusiness

2. 03.02.2003MS kap. 32 IT revolution IT for most administrative functions Standards and technology for integrating systems Big effects Requirements: High formalization level Symbolic tasks

3. 03.02.2003MS kap. 33 Examples

4. 03.02.2003MS kap. 34 Strategic use of IT

5. 03.02.2003MS kap. 35 Our textbook Focus for different editions End user computing (1986) Strategic advantages (1989) Reengineering (1993) Internet, intranet and extranet (1997) eBusiness (2001) Note: All areas are important today, the textbook has just focused on the ”hot” topic of the year

6. 03.02.2003MS kap. 36 Important trends: Flow of money go digital and automatic Point of sale terminals JIT, ERP XML will be important for B2B, in addition to EDI Digitalization (sound, pictures, books, etc) Distributed work will be more common Electronic cooperation between organizations (B2B) Reorganizations will occur often

7. 03.02.2003MS kap. 37 But: We have to be aware of the fundamental limitations: Formalization Standards Largest effect where everything is symbolic Other limitations: Technical Cultural Social Security

8. 03.02.2003MS kap. 38 Real possibilities := theoretical possibilities - constraints Teoretical possibilities Constraints Real possibilities

9. 03.02.2003MS kap. 39 BPR: Internally BPR, ”Business Process Reengineering” Sucess- (and fiasco-) criteria: growth and expansion better than reduction both internal and external actors (employees, customers, suppliers) driven by management use of technology to drive change goes seldom well IT offers possibility, but shall not drive Good understanding of technology is important

10. 03.02.2003MS kap. 310 BPR BPR ”hot” in the middle of the nineties, replaced by eBusiness today (also in our textbook). BPR ios important, especially due to the possibilities offered by the Internet and Web. Internet and Web offer the possibility of radical change - and in this respect has much in common with BPR

11. 03.02.2003MS kap. 311 BPR: Revulsion Start with a blank sheet, do everything from start (Hammer and Champy). Revolutionary approach (30-50% chance of success) Analysis: Starting again we can use today's technology in implementing business processes but, should we also demand that customers or suppliers change their processes dramatically? and to we have the complete overview when we redesign and what about the problem of moving from one system to a completely new? and then, should we relax until the next revolution comes along?

12. 03.02.2003MS kap. 312 Ford Motor Company

13. 03.02.2003MS kap. 313 BPR: Evolution Continuous improvement (TQM - Total Quality Management) Risk: changes may only be superficially, nothing is done with the more deeper structures Conservatism, complacency, etc. is there to stop fundamental changes

14. 03.02.2003MS kap. 314 Case: Prudence Insurance New ways of selling insurance Improved customer contact ”profiling” of customers IT system with all customer data Implemented office to office, got experience as the work progressed, enthusiasm, knowledge An experienced sales manager in charge – enjoyed much respect in the organization More sales, more commission, improved customer contact

15. 03.02.2003MS kap. 315 Case: insurance Other companies used the same package It worked for some, not for others Factors to fail: Laissez-faire approach Only supported by head office It was up to the agents themselves if they wanted to use the new method No training Moral: Implementation is important It is not easy to copy others successes

16. 03.02.2003MS kap. 316 BPR: Choices

17. 03.02.2003MS kap. 317 eBusiness B2E - Business-to-Employee B2C - Business-to-Consumer (B2C = B2E) B2B - Business-to-Business

18. 03.02.2003MS kap. 318 B2E Intranet Links to Internet ”best practices” Common functionality (database access, ordering of office supplies…) Replaces paper. can be accessed from everywhere Standard technology (browsers etc)

19. 03.02.2003MS kap. 319 Case: Microsoft “Human Relations” system: Health plan Stock options Pension plans salary Office supplies. Intranet Integrated with ERP (SAP R/3) Reduced costs for material etc. by 75-90% Replaced more than 200 paper forms Saved $1 million each year In addition, reduced workload for employees in addition

20. 03.02.2003MS kap. 320 B2C The “terminal” is given to the customer Intermediates can be removed The customer is given direct access to data and functions maybe a better service for reduced costs Revolution!

21. 03.02.2003MS kap. 321 B2C models Internet only (click) Internet + brick and mortar = brick and click Important questions: can all services be performed over the Internet? can traditional services be left for others to perform do the customer need both the brick and the click services?

22. 03.02.2003MS kap. 322 B2C advantages Global assess Automatic order handling Automatic dissemination of information, improved information Symbolic products can be downloaded Better access (24*7*52) Better communication with customers (or the opposite?) Customer loyalty (?) New products and services Direct marketing

23. 03.02.2003MS kap. 323 B2C problems User Interface (may be difficult to use) Takes time Logistics, reverse logistics Unstable customer base (too many customers) Global regulations (many are selling only nationally) Competition Information to competitors Can we trust ”dot-coms”?

24. 03.02.2003MS kap. 324 Case: Internet shopping Online grocer: Lose money (IHG) failed (Rema) Big losses (Webvan, IHG) Distribution costs Formalizing of products niches?

25. 03.02.2003MS kap. 325 case: Stop & Shop

26. 03.02.2003MS kap. 326 e-Business model New requirements from customers ”demanding on-demand” simple access customization new services (e.g., for bank to music) Relations with partners: Remove intermediates (travel agency, bank) Virtual organizations

27. 03.02.2003MS kap. 327 Case: Bank More than 50% of all transactions goes over the Internet If we do the job ourselves we want something back (as free services) Internet banks are increasing their customer base Is a bank a computer? Ideal application for B2C?

28. 03.02.2003MS kap. 328 Case: Travel agency Still existing? Only a small fraction of customers use Internet today but in a few years time ideal for brick & click?

29. 03.02.2003MS kap. 329 B2B (Business-to-Business) Since 1950 EDI from 1975 VAN (Value Added Networks) XML, XML/EDI Integration of value chains Demand: Good IT infrastructure Formalized data and services Willingness to think ahead Accept for standards

30. 03.02.2003MS kap. 330 XML 2000 Fifth Avenue Pittsburgh PA 15260

31. 03.02.2003MS kap. 331 XML: namespaces <item xmlns:invoice=http://www.acmeinc.com/inv xmlns:delivery=http://www.acmeinc.com/deliv> P.O.Box 5440 45 Main St namespaces define ”scope” for name

32. 03.02.2003MS kap. 332 XML: Schema Describe document structure Ideas from programming languages and databases DOM (Document Object Model) – document structure description XPath XSL ( eXtensible Stylesheet Language) and XSLT can we transform XML to other forms, e.g., to HTML An XML structure can be input to a program or a browser

33. 03.02.2003MS kap. 333 XML: way ahead Much optimism (or ”hype”) Slower than expected Is it too complicated? Competition from alternatives (HTML, Excel, database formats, ASCII) Establishment of standards is a social process Not everybody benefits However: XML will be used

34. 03.02.2003MS kap. 334 Electronic markeds Oil companies (Norway, abroad) Markets for fish, vegetables, etc. COVISINT Used by Ford, GM, DaimlerChrysler Offer supply services

35. 03.02.2003MS kap. 335

36. 03.02.2003MS kap. 336 Covisint

37. 03.02.2003MS kap. 337 A success?

38. 03.02.2003MS kap. 338 Some marketplaces seems to work: BUSINESS/FINANCIAL DESK | July 16, 2001, Monday E-Commerce Report; As the shakeout proceeds, some business-to- business marketplaces show their staying power. By Bob Tedeschi (NYT) 1313 words Late Edition - Final, Section C, Page 4, Column 1 ABSTRACT - Some business-to-business e-marketplaces are starting to show staying power amid industry shakeout; Pantellos, online utilities industry marketplace, ChemConnect, online chemicals exchange and Intercontinental Exchange, energy trading site, and handful of others have managed to attract buyers and sellers by broadening their service features beyond typical marketplace site; photo (M)

39. 03.02.2003MS kap. 339 eBusiness factors Technology Security Regulations Copyright Online contracts and signing Culture We will return to these issues in book 2