Information Management

Transcription

1 Information Management Prof. Dr. Elgar Fleisch, Ass. Prof. Dr. Felix Wortmann ETH Zurich & University of St. Gallen (HSG) Discovering Management Information Management Thursday, April 23,, 8-10am

2 The Management Model Marketing Employee Vision Values Corporate Culture / Human Resource Management Corporate Strategy Supply Chain und Operations Technology- und Innovationmanagement HR Management Financial Management Information Management Risk Management Quality Management Satisfaction Customer Satisfaction Partner + Supplier Satisfaction Social + ecological Responsibility Business Result Chair of Entrepreneurship D-MTEC ETH Zurich

3 The 2 different views on Information Management Organizational representative CEO CIO Overall goal Leveraging IT Managing IT Subject topics Business value of IT IT-based business model innovation Process & product innovation Stragegic information systems IT-System types and trends, and its business impact Basic topics such as integration, transaction costs, network economy, disruptive innovation IT Governance IT Project Portfolio Management IT-Business Alignement Infrastructure IS-Selection IT & Business Architecture Cost & budget management Software development Slide 3

4 Leveraging IT Business Model Innovation Slide 4

5 Business Model Innovation and its Predecessors Rate of major innovation Product Process Business Model Time Slide 5

6 Business Model Articles in the Business & Management Field Source: Zott et al. (2011) Slide 6

7 A BM describes how a company creates, captures, and delivers value. What? To Whom? How? Articulates the value proposition (i.e., the value created for users by an offering based on technology); Identifies a market segment and specify the revenue generation mechanism (i.e., users to whom technology is useful and for what purpose); Details the revenue mechanism(s) by which the firm will be paid for the offering; Defines the structure of the value chain required to create and distribute the offering and complementary assets needed to support position in the chain; Estimates the cost structure and profit potential (given value proposition and value chain structure); Describes the position of the firm within the value network linking suppliers and customers (incl. identifying potential complementors and competitors); and Formulates the competitive strategy by which the innovating firm will gain and hold advantage over rivals. Source: H. Chesbrough, Business Model Innovation: Opportunities and Barriers, Long Range Planning Slide 7

8 Example Dacuda Which one is the right business model? Slide 8

9 Example Dacuda Which one is the right business model? What? Sell Mouse? Sell Scanner? Sell License? Sell B2B projects (passport scanner at checkout etc.)? Sell consumer apps? Do scientific publications? Go open source? To whom? Retailer? ODM? Brand? Go for Laptops, Tablets, and mobile phones? How - supply chain? key partners in the value chain of mice, scanners, or what? How - revenue model? $ per Hardware $ per License? Slide 9

10 Business Model Definition The Magic Triangle What? What do you offer to the customer? Value Proposition How is revenue created? Revenue Model Who? Value Chain How is the value proposition created? How? Who is your target customer (segment)? How? Prof. Oliver Gassmann, Dr. Karolin Frankenberger, ITEM-HSG Slide 10

11 Industry game changer Slide 11

12 Detailing the BM pattern Subscription The customer pays a regular fee, e.g., most commonly on a monthly or an annual basis, to have access to the product/service. Jamba (2004) SAP Business ByDesign (2007) Salesforce (1999) blacksocks (1999) Dollar Shave Club (2012) Premiere (1990) Prof. Oliver Gassmann, Dr. Karolin Frankenberger, ITEM-HSG Slide 12

13 4 Strategies of how business model innovating firms use patterns - Example Create Transfer Combine Leverage Nestlé BabyNes (2012) Gillette (1904) hp (1984) Nestlé Nespresso (1986) Apple Apple Apple Nestlé ipod/itunes iphone/ ipad/ibook- SpecialT (2003) (R) AppStore Store (2011) (2007) (R) (2010) (R) Razor and Blade (R): Reverse Multi-sided platform Long Tail Slide 13 Prof. Oliver Gassmann, Dr. Karolin Frankenberger, ITEM-HSG

14 Leveraging IT The Role of IT in Business Model Innovation Slide 14

15 IT and Business Modell Innovation Slide 15

16 IT empowers BMP: Example Hidden Revenue Definition The logic that the user is responsible for the income of the business is abandoned. Instead, the main source of revenue comes from a third party, which cross-finances whatever free or low-priced offering attracts the users. A very common case of this model is financing through advertisement, where attracted customers are of value to the advertisers who fund the offering. This concept facilitates the idea of 'separation between revenue and customer'. Case Examples JCDecaux (1964), Sat.1 (1984), Metro Newspaper (1995), Google (1998), Facebook (2004), Spotify (2006), Zattoo (2007) Slide 16 Source: Gassmann et al

17 IT empowers BMP: BMP Two-Sided Market Definition A two-sided market facilitates interactions between multiple interdependent groups of customers. The value of the platform increases as more groups or as more individual members of each group are using it. The two sides usually come from disparate groups, e.g., businesses and private interest groups. Case Examples Diners Club (1950), JCDecaux (1964), Sat.1 (1984), Amazon Store (1995), ebay (1995), Metro Newspaper (1995), Priceline (1997), Google (1998), Facebook (2004), MyHammer(2005), Elance (2006), Zattoo (2007), Groupon (2008) Slide 17 Source: Gassmann et al

18 IT empowers BMP: Two-Sided Market (cont.) Slide 18

19 IT as a prerequesite: BMP E-Commerce Definition Traditional products or services are delivered through online channels only, thus removing costs associated with running a physical branch infrastructure. Customers benefit from higher availability and convenience, while the company is able to integrate its sales and distribution with other internal processes. Case Examples Dell (1984), Asos (2000), Zappos (1999), Amazon Store (1995), Flyeralarm (2002), Blacksocks (1999), Dollar Shave Club (2012), Winebid (1996), Zopa (2005) Slide 19 Source: Gassmann et al

20 IT as a prerequesite: BMP Long Tail Definition Instead of concentrating on blockbusters, the main bulk of revenues is generated through a 'long tail' of niche products. Individually, these neither demand high volumes, nor allow for a high margin. If a vast variety of these products are offered in sufficient amounts, the profits from resultant small sales can add up to a significant amount. Case Examples Amazon Store (1995), ebay (1995), Netflix (1999), Apple ipod/itunes (2003), YouTube (2005) Slide 20 Source: Gassmann et al

21 IT as a prerequesite: BMP Affiliation Definition The focus lies in supporting others to successfully sell products and directly benefit from successful transactions. Affiliates usually profit from some kind of pay-per-sale or pay-per-display compensation. The company, on the other hand, is able to gain access to a more diverse potential customer base without additional active sales or marketing efforts. Case Examples Amazon Store (1995), Cybererotica (1994), CDnow (1994), Pinterest (2010) Slide 21 Source: Gassmann et al

22 IT as a prerequesite: BMP Freemium Definition The basic version of an offering is given away for free in the hope of eventually persuading the customers to pay for the premium version. The free offering is able to attract the highest volume of customers possible for the company. The generally smaller volume of paying premium customers generate the revenue, which also cross-finances the free offering. Case Examples Hotmail (1996), Survey-Monkey (1998), LinkedIn (2003), Skype (2003), Spotify (2006), Dropbox (2007) Slide 22 Source: Gassmann et al

23 IT as a prerequesite: BMP Freemium (cont.) Slide 23 Source: Surveymonkey

24 General IT-Triggered Trends Across IT-enabled BMP Which features did IT enable in many of the BMP? 1. Integration of users / customers IT enables companies, to outsource tasks to customers BMP examples are 05 User Designed, 06 Crowdsourcing, 07 Crowdfunding, 39 E- Commerce, 04 Open Source (Content), 09 Peer-2-Peer, 01 Mass customization 2. Run time services / digital contact to customer after sales IT enables companies to maintain the relationship after sales via IT-based services Examples are 17 Rent Instead of Buy, 12 Subscription, 11 Freemium, 03 Razor & Blade, 48 Add on, 38 Leverage Customer Data, 15 Performance-based Contracting 3. Analytics of user and other data evolves to a core competency The target-oriented collection and analysis of transaction and usage data becomes a core competency in digital industries for product and pricing decisions. Examples are 12 Subscription, 13 Flat Rate, 11 Freemium, 14 Pay per Use, 48 Add on,15 Performance-based Contracting, 16 Guaranteed Availability Slide 24

25 Which Technology-Waves did enable new Business Model Patterns? Web 1.0 Web als Business Infrastructure Web 2.0 Web als Social Media When users add value Web 3.0 Internet der Dinge When things add value 39 E-Commerce 08 Multi-sided Plattform 10 Hidden Revenue 54 Affiliation 02 Long Tail 09 Peer-2-Peer 11 Freemium 38 Leverage Customer Data 04 Open Source (Software) 40 Digitalisierung 05 User Designed 06 Crowdsourcing 07 Crowdfunding 12 Subscription (SaaS, Media as a Service) 04 Open Source (Content)? Slide 25

26 Understanding the Web 3.0 Value Stack DigitalServic Layer 5 Digital, Global Digital World Analytics Layer 4 Connectivity Layer 3 Customer Value Physical World Sensor and Actuator Layer 2 Physical Thing Layer 1 Physical, Local Slide 26

27 Web 3.0: Towards Hybrid Value Propositions THING + DATA = Thing-based Function + Data-driven Service Bulb Presence Light Security Bin Stock Storage capacity Automatic Replenishment Tractor Diagnostics Towing vehicle Predictive Maintenance, Optimization Slide 27

28 Managing IT Tasks and Major Challenges Slide 28

29 Definition of Information Management The focus of information management is shifting Definition from the 1980 s: Information Management is the cognition and conversion of the potentials of ICT. Definition since the mid-1990 s: Information Management is the cognition, conversion and operation of the potentials of ICT. Source: Prof. Dr. Walter Brenner, IWI-HSG, and Source: Österle, H. (1987) Erfolgsfaktor Informatik Umsetzung der Informationstechnik in der Unternehmensführung, Information Management (2:3), pp Slide 29

30 The role of IT in the company Perception of IT by the business units of a company necessary evil support, no partner IT is everything! business units are better in IT equal partners Avoid IT, because it cannot be controlled The corporate management should provide IT with the direction IT-Specialists should supervise the alignment of IT Each business unit should control its own IT Control over IT should be divided between business units and IT-Specialists Source: Prof. Dr. Walter Brenner, IWI-HSG Slide 30

31 The basic problem: The machinist in the basement Source: Prof. Dr. Walter Brenner, IWI-HSG Slide 31

32 Challenge 1: Legacy Systems They must be compatible with modern systems Legacy systems are historically grown information systems that do not conform with the technological state-of-the-art and are operated beyond the end of their originally intended life span Source: Prof. Dr. Walter Brenner, IWI-HSG Source: Hansen, H.R., and Neumann, G. (2001) Wirtschaftsinformatik Lucius & Lucius Verlagsgesellschaft, Tübingen. Slide 32

33 Challenge 2: Interfaces (with legacy systems) The number of interfaces can be a challenge The number of interfaces between systems is calculated by n(n 1)/2 ~ n 2 Systems Interfaces ' ' ' ' ' '950 1' '500 Source: Prof. Dr. Walter Brenner, IWI-HSG Slide 33

34 Challenge 3: The Dominance of Operations Source: Prof. Dr. Walter Brenner, IWI-HSG Slide 34

35 Challenge 4: ICT Breakdown Costs for broken down ICT can be enormous Reasons for breakdowns: Force majeure, organizational flaws, human failure, technical fault, willful intent Costs during breakdowns: Lost employee productivity = cost per hour x duration Lost IT productivity = cost per hour x duration Lost revenue = revenue per hour x duration Costs after breakdowns: Image loss and overtime Missed appointments, contractual penalties Slide 35 Source: Prof. Dr. Walter Brenner, IWI-HSG 35

36 Challenge 5: Cost cutting vs. Innovation Innovation Cost cutting Effectiveness Efficiency Source: Prof. Dr. Walter Brenner, IWI-HSG Slide 36

37 Managing IT Keep the Business-IT-Stack Aligned, Run the IT, Slide 37

38 Business-IT-Stack Strategy Business Process Information System Source: Courtesy of Prof. Dr. H. Österle,, IWI-HSG. Slide 38

39 Enterprise Architecture is about aligning strategy, processes and IT + Strategic planning, controlling - Strategy Project Portfolio Management Enterprise Architecture Management Project Management - Implementation + Slide 39

40 Business transformation as an engineering discipline Slide 40

41 Transformation framework at Swiss Re From phase to takt Slide 41

42 Transformation artefacts at Swiss Re From phase to takt Slide 42

43 Run the IT IT Infrastructure Library (ITIL) Version 2 Source: Prof. Dr. Walter Brenner, IWI-HSG Slide 43 43

44 Summary Information Management Leveraging IT Managing IT Slide 44

45 Information Management Prof. Dr. Elgar Fleisch, Ass. Prof. Dr. Felix Wortmann ETH Zurich & University of St. Gallen (HSG) Discovering Management Information Management Thursday, April 23,, 8-10am