14. Summary, Q&A, Entrepreneurship

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1 14. Summary, Q&A, Entrepreneurship Prof. Dr. Elgar Fleisch ETH Zürich & University of St. Gallen (HSG) Management Information Systems Autumn Semester Tuesday, 8-10am; HG E 3

2 Agenda Summary Exam What s next? E-Ship Slide 2

3 Summary Slide 3

4 Business Model Innovation and IT Slide 4

5 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 5

6 Which Technology-Waves did enable new Business Model Patterns? Today s Focus 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)? see lecuture on Internet of Things Slide 6

7 Businss Value of IT Slide 7

8 Industry effects of IT (cont.) Example Co#eleer / Bendoly, E. (2006), MIS Quarterly 30(3), Slide 8

9 IT does not matter Slide 9 Carr, HBM 2003

10 Strategic IS versus strategic necessity (cont.) The Benetton Case Old business process sequence Benetton s business process sequence Fabric Colored fabric Pullover Fabric Uncolored pullover Pullover Coloration Sewing Sewing Coloration Slide 10

11 The Concept of Integration Slide 11

12 Horizontal and vertical integration Business processes Functional area spanning and corporate planning models Sales process Oder processing Development Customers service P&C systems Operative systems Cross-cutting functions Basic functions Research, product and process development Planning and control systems (P&C) Data Warehouse Finance Accounting Human resources Asset management Sales Procurement Production Shipment Customer service Vertical integration Inventory management Value creation / order flow Source: P. Mertens et al. Horizontal integration Slide 12

13 One history of integration Phase 1 Computerization of individual functions (support of island functions such as invoicing) Phase 2 Computerization of functional areas (integrated functional areas, such as financial accounting) Phase 3 Design of integrated processes (internally from customer to customer, such as e.g. order processing) Phase 4 Individual 1 : 1 integration of cross-enterprise processes Supplier Supplier Supplier Supplier Customer Finance Finance Finance Finance Finance Sales Sales Sales Sales Sales Production Production Production Production Production Function / process Business unit / Enterprise Integration via computerization Output Network infrastructure Trust Payment Transport Phase 5 Consistent m : n integration of cross-enterprise processes with the establishment of a networking infrastructure... Slide 13

14 Transaction Cost Perspective Slide 14

15 From vertical integrated companies to horizontal global players 1980 Old, Vertical Computer Industry 1995 New, Horizontal Computer Industry, Sales and Distribution Retailstores Superstores Dealers Mail orders Application Software Word Word Perfect etc. Operating System DOS/Windows OS/2 Mac UNIX Computer Dell Compaq HP IBM... Chips Intel Motorola Risc IBM, Sperry, DEC, Wang Quelle: Prof. Dr. Roman Boutellier Slide 15

16 and thereby pushes towards network and market coordination Transaction costs (TC) Market coordination Network coordination Hierarchic coordination Legend: - IT by using IT Level of Specificity (S) Slide 16

17 Impact on division of labor on task level Cost Total cost Transaction cost Production cost Opt* Division of labour Slide 17

18 Network Economic Perspective Slide 18

19 Metcalfe s law Source: Wikipedia Slide 19

20 Effects - Installed base and complementary goods Source: Shilling Slide 20

21 Web 2.0 Slide 21

22 The Two Dimensions of Web 2.0 Web 2.0 When users add value Infrastructure Using the Web as computing platform Applications Harnessing collective intelligence Slide 22

23 that is why every analysts graph looks like this Source: Forrester Slide 23

24 IOT Slide 24

25 The Internet of Things emerges. It expands the Internet to the real world Information systems & the Internet Cost of data entry Punch card Keyboard Barcode Manual measuring Physical world Slide 25

26 Low cost social security system based on connected LED lamps (cont.) Slide 26

27 Additive Manufacturing Slide 27

28 but what is the true nature of additive manufacturing? Slide 28 Prof. Frederic Thiesse, Würzburg

29 and so on Slide 29

30 Exam 2 Example Questions Slide 30

31 Business Models Problem Imagine you are head of a start-up company and you have built a cool customer-relationship-management (CRM) software. Besides the capabilities of your product the decision for the proper business model is crucial for the success of your company. Questions a) Illustrate your business model by using the magic triangle. b) Software-as-a-Service (SaaS) has become very important over the last years i) Describe briefly what is meant by SaaS ii) Name 3 advantages and disadvantages each for SaaS in comparison to an onpremise product from the view of a vendor iii) Name 3 advantages and disadvantages each for SaaS in comparison to an onpremise product from the view of a customer Slide 31

32 Additive Manufacturing In which cases is it likely that additive manufacturing will deliver value? Which production settings might be replaced by additive manufacturing? You are company xyz and you are producing. Slide 32

33 What s next? Slide 33

34 We are still at the beginning Industrial robotic In production environment since 1960 Today robots world wide; market 5.6 bio USD with 7% average growth rate Growth > 2003: 26% Cost decline 2002:1990 -> 1:5 Home robotic 2006 home robotic market > industrial market Vacuum cleaner, lawn mower, surveillance, toys Slide 34

35 We can anticipate technology, but never applications Source: myroombud 2009 Source: myroombud 2009 Slide 35

36 Forecasts are difficult, especially concerning the future Source: Gartner Research Slide 36

37 E-Ship Slide 37

38 Prof. Dr. Dietmar Grichnik Professor of Entrepreneurship and Technology Management, University St. Gallen Teaching Entrepreneurship: Foundations and Cases (Bachelor Course) Technology and Entrepreneurship (Master Course) High-tech Start-up Management (Master Course) Entrepreneurship in Technology Firms (Master Course) Research Seminar in Entrepreneurship (PhD Course) Paper Clinic (PhD Course) Awards HSG Communication Impact Award 2012 FGF Best Sustainable- & Social Entrepreneurship Paper Award 2011 HSG Communication Impact Award 2009 Academy of Management Best Paper 2007 Wolfgang Ritter Research Award Slide 38

IT and Network Organizations MIS Lecture 3

IT and Network Organizations MIS Lecture 3 Prof. Dr. Elgar Fleisch 1 Agenda 0. Learning targets 1. Technology, division of labor, and networking 2. Bi Brief fhistory of management tinformation systems