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Networkability van Netwerken?

Dr. Martin SmitsCenter for Research on Information Systems and Management (CRISM)

School of Economics and Business Administrationm.t.smits@uvt.nl

Bedrijvendag Gridforum – 25 juni 2007

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Tilburg University

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“Wat zou het mooi zijn als je de mogelijkheden van

meerdere computers

en de randapparatuur die daaraan verbonden is

op een simpele manier kan ontsluiten?”

“… zo eenvoudig als met een stekker stroom uit een

stopcontact halen ….”

(‘Wat is een GRID’, Foster en Kesselman, 1998)

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Bediening via RT3?

Signaal naar Aux?Voeding?Bediening via ipod?

Belkin TuneCast™ Mobile FM Transmitter

GRID: een zegen GRID: een zegen voor de consument?voor de consument?

en…… en…… Navigatie op postcode?Navigatie op postcode?Navteq? MagnetiMarelli?Navteq? MagnetiMarelli?

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Networkability van Netwerken?• B2C → B2B• Intro:

– Netwerk– business bus– networkability– performance

• Voorbeelden:– Unitech netwerk– Aces Direct netwerk– Kantonal Bank netwerk

• En dan?

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Take aways

• Succes van je bedrijf wordt bepaald door succes van het

business netwerk.

– Hoe ontwikkelt zich zo’n business netwerk?

– Wat kun je daar als bedrijf aan doen?

• Succes business netwerk wordt bepaald door

– Networkability (van Producten, Processen, Organisatie, IT)

– IT investeringen: interne IT => IOSintern => IOSextern

– Governance mechanismen in het business netwerk

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Aandeel van de transactiekosten in US-BNP steeg van 25 % (1870) naar 55% (1970) en 60% (2000)

[Wallis/North 1986; Mertens et al. 2000]

Verklaring is de verticale differentiatie in veel industrieen

[Corsten/Gabriel 2004, 23]

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(1) Business Netwerk

• Drie of meer organisaties, onderling verbonden, zodanig dat een gezamenlijk doel kan worden gerealiseerd (Provan ea, 2007)

– 1985-2005: 26 empirische “whole network” studies

– Hoe ontwikkelen netwerken zich?– Hoe worden ze bestuurd? (netwerk governance?)– Hoe worden collectieve resultaten gerealiseerd?

• “teveel focus op 1 organisatie betekent het missen van succes uit collectief gedrag”

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Firm 1

Firm a Firm b

Firm c Firm N

Whole Network; ‘Smart Business Network’

Netwerkorganisatie

Firm performance

Network performance

IOS/ relationship

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Veel voorbeelden van de behoefte aan efficiente netwerkvorming

Opstarten samenwerking

Entry barriers

Beeindigen samenwerking

Exit barriers

Uitvoering samenwerking

Stroomlijnen Transacties

Netwerkvorming

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Netwerkorganisatie en IT infrastructuur

(2) Business Bus

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Business Bus

eServicee.g. Credit rating

e Servicee.g. Bill presentation

eServicee.g. Directory service

eService. . .

. . . . . .. . .

Product documentation

Accessories

Insurance

Integratore.g. Dealer

Publish

Garage

Rent-a-car

Customere.g. Car owner

Information

Driver

Police

Configure ConfigureProduction planning

Finance Finance Payment

. . . . . . . . .

Producere.g. Car manufacturer

(2) Business Bus

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(3) Networkability

Networkability is an organization’s capability to ...

• efficiently cooperate with internal and external partners

•Quickly establish, develop and dissolve IT-based business relationships

(Wigand et al, 1997)

Networkability bepaalt de efficientie van netwerkvorming door een individuele organisatie

0

1

2

3

4

Process

0

1

2

3

4

Product en Services(Modularization; digitization..)

Proces (transparatieConflict mgmnt)

Information Systems(standaarden; integratie)

Organization Structures(power distribution; granulariteit; etc)

Employees(ability to..acquire inf)

[Oesterle, Alt, 2002]

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Vier soorten netwerk-onderzoek

(e.g.: Structuur,Processen, Relaties, Governance,IT gebruik, Business busNetworkability)

(IT performance, business performance)

Provan ea, 2007

Alt & Smits, 2007

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Onderzoek naar Netwerken• Wat gebeurt er met het netwerk als geheel?

– Longitudinaal; vergelijkend; good cases

• Aandachtspunten:– Structuur: Positie van organisaties in het netwerk (centraal/

perifeer); Relaties (direct/ indirect)

– Processen/ functioneren/ governance

– Business Bus: IT, applicaties, standaarden

– Networkability (product, proces, staf, IT)

– Performance

• Wat betekent dit voor organisaties in het netwerk? En voor

IT leveranciers…

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Unitech

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Unitech (in 2000: 360 fte, $ 170 m)‘handheld scanners (ADC) for commercial logistics’

AppleHP ea

(40)materialsuppliers

inTaiwan

sales, distributionTaiwanesecustomers

design, production, sales, distribution

BU1

BU2

design, production

BU3

Sales, distribution

Sales, distribution

Sales, distribution

Sales, distribution

USA

China

EMEA

Japan

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MaterialSupplier 1

MaterialSupplier 2

IntelNEC, Sony,

Philips

MaterialSupplier 3

MaterialSupplier N

Unitech Taiwan R&D, Manufacturing

Marketing, Sales

>

<

<

<

<

retailer

retailer

retailer

retailer

retailer

Customers

<

0

>

=

Netwerk structuur 1997

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MaterialSupplier 1

MaterialSupplier 2

MaterialSupplier 3

MaterialSupplier N

retailer

retailer

retailer

retailer

retailer

CustomersEMEAUnitech

TaiwanR&D, Manuf

UnitechEurope

Sales, Distr

UnitechOther

branches

Third partySolutionProvidersTaiwan

40 Third partySolutionProvidersEurope

IntelNEC, Sony,

Philips

Netwerk structuur 2001

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MaterialSupplier 1

MaterialSupplier 2

MaterialSupplier 3

MaterialSupplier N

10SystemIntegr

retailer

retailer

retailer

CustomersIn

EuropeUnitechTaiwan

R&D, Manuf

UnitechEurope

Sales, Distr

UnitechOther

branches

Third partySolutionProvidersTaiwan

7Value AddedDistri-butors

IntelNEC, Sony,

Philips

Netwerk structuur 2007

retailer

retailer

65%

30%

€ 8 M/yr

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Governance?

Large & smallSuppliers

Unitech Taiwan

Unitech Europe

Retailers&

Solution providers

ab c d fe

Db

Lb Lb

Da

La

Ib Ia Ic

Lc

Dc

Lc Ic

Dd

Ld

Id

De

IeLe

Ie

Lf

If

Df

Lf

If

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6 x governance & busformatie?• Alignment a. IT infrastructure did not meet the business requirements. UT

aimed to achieve better internal fit: business strategy (Da) affected the organizational structure (La), finally impacted IT applications (Ia).

• Alignment b. Strategies (Db) and SCM processes (Lb) of large UT-suppliers forced UT SCM to use on-line inquiries of inventories (Lb) and to implement application b, a web site (Ib) to support this.

• Alignment c. Business strategy in UT (Dc) drives IT strategy (Lc), impacting the ERP system and SCM in UT and UE (Ic).

• Alignment d. In order to achieve the new business strategy objectives (Dd), UE had to re-build the company structure (Ld), and acquire a proper (but simple) IT infrastructure (Id), to meet the basic requirements of internal control (Ld).

• Alignment e. UE decided to further develop its own IT infrastructure to enable downstream SCM by developing a simple web site (system e). UE strategy drives (De) UT SCM processes (Le), resulting in a website and influencing SCM in downstream partners (Ie).

• Alignment f. In 2003, UE decided to develop an ERP based on-line ordering system (system f) to improve process efficiency, accuracy of internal and external management reports and to provide online order fulfillment to regional partners (Df), influencing SCM and SC structure (intensify the linkages between the business processes and IT architecture) and a planned IT strategy (Lf), leading to the implementation of a website (If).

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Networkability Scores

0

1

2

3

4Product

Process

Information SystemsOrganization Structures

Employee

UnitechTaiwan

Unitech Europa

0

1

2

3

4Product

Process

Information SystemsOrganization Structures

Employee

UnitechTaiwan

Unitech Europa

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Unitech Netwerk Performance• Business

– Improved customer satisfaction (=> top 5)• Rapid responses? swift repairs and upgrading• More customer services, customized products, prices

– Improved annual sales & revenues (1997-2002-2006?)– Inventories => 30% of sales (1000 products; 3000 spare parts)

• IT– No standards (ERPs Oracle en Navision)– Basic information sharing (e-mails)– Simpele web-portals en catalogues– Geen netwerk business bus

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Bevindingen Unitech Case

• Complexe relatie tussen ‘structuur van netwerken’, ‘networkability van organisaties’ en ‘netwerk performance’

• Aanwijzingen datnetwerk performance sterk kan verbeteren zonder

substantiele networkability van IT

… maar verdere ontwikkeling wordt belemmerd als IT networkability laag is …. (?)

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ACES DIRECT

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Aces Direct IT retail in Nederland

OEMs

Business client

BB product specification services

IcecatBB order processing services Onetrail

6 7

BB IT services

IT companies

BB lease services

Lease Companies

BB Physical distribution services

DHL

Microsoft

HP

HP

Toshiba

Aces Direct

TechData

IT retail markt (NL): € 2 mrd /jrAD 1-2% markt aandeel; 17 fteTD (NL) € 400 mln/yr

IngramMicro

Copaco

ECTPluz

SMEs

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Networkability Scores

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Bevindingen Aces Direct Netwerk

• Structuur van het netwerk– AD = focal actor, ketenverbreding– New ties with Camera and TV suppliers; leasing; maintenance…– #direct ties ↑ (7) & # indirect ties ↑ (>20)– Firm level = standardization of products, services, processes

• Netwerkprocessen– Shared objective: ‘fulfilling IT services’, varying per actor – Chain becomes Service network– Competition with other IT- retail networks (MISCO, price quality)

• Business Performance– Fast growth in market “IT for SME in NL”– Customers evaluate overall AD performance; AD evaluates suppliers– Shared performance indicators?

• IT performance– Network level = several (vertical) 1:1 IOSs– National/ industry level = several N:1:M b-buses; product standards

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Bevindingen Aces Direct Netwerk

• Ook hier complexe relaties tussen structuur,

processen, networkability en performance

• Performance AD improved, due to (?)

– Specific (vertical) IT investments within the network

– Generic (horizontal) IT investments outside the network

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Swiss banking

• Group of 24 cantonal banks in Switzerland founded in 1907

• Total of 17‘000 employees• 90% of revenues within

Switzerland• Large tradition of shared services,

e.g. financial products, production centers

• Shared IT operations began in 1971 with RTC, followed by AGI in 1987 and Unicible in 1992

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Eén network voor de cantonal bank group (1995)

St. Gallen

Thurgau

Zurich

Lucerne

Bern

Basel

Jura

Aargau

Schwyz

Nid & Obwalden

Uri

WallisNeuenburg

Schaffhausen

Appenzell

Glarus

Graubunden

Frbourg

SWIFT

RTC Business

Bus

centralized services

(e.g. product data)

SwisscantoFunds

VESECACredit Card

Foreign Exchanges

Reuters

Bloomberg

External services

Internal services RTC ERP

RTC ERP

RTC ERP

RTC ERP

RTC ERP

RTC ERP

RTC ERP

RTC ERP

RTC ERP

RTC ERP

RTC ERP

RTC ERP

RTC ERP

RTC ERP

RTC ERP

RTC ERP

RTC ERP

RTC ERP

Business customers

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Drie netwerken voor de cantonal bank group (2006)

St. Gallen

Thurgau

Zurich

Lucerne

Bern

Basel

Jura

Aargau

Schwyz

Nid & Obwalden

Uri

WallisNeuenburg

Schaffhausen

Appenzell

Glarus

Graubunden

Frbourg

SWIFT

SwisscantoFunds

VESECACredit Card

Foreign Exchanges

Reuters

Bloomberg

External services

Internal servicsFINOVA ERP

RTC ERP

RTC ERP

RTC ERP

RTC ERP

AVALOQ ERP

AVALOQ ERP

AVALOQ ERP

AVALOQ ERP

FINOVA ERP

FINOVA ERP

FINOVA ERP

FINOVA ERP

FINOVA ERP

FINOVA ERP

FINOVA ERP

FINOVA ERP

FINOVA ERP

FINOVABusiness

Bus(Data enProcess

standards)

AVALOQBusiness

Bus

Business customers

Challenges on network level

• Redundant services (e.g. product data service within each network)

• Platform-specific services (e.g. Avaloq-services not usable within RTC network)

• Sunk costs when banks change service providers

RTC Business

Bus

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Bevindingen Swiss Banking• Structuur

– Clustervorming

• Networkability – Afname tussen de 3 groepen

– Toename binnen 1 groep

• Business performance– Meer diensten (per netwerk)

– Kostenstijging van services (minder economies of scale)

• IT performance– minder interoperability tussen de netwerken

– Hogere IT kosten op netwerk niveau (3 verschillende platforms)

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Conclusies literatuur & 3 cases• Networkability = f(Product, Process, Org., Pers., en IT)• Networkability(organisatie) Networkability(netwerk)• Cases:

– Unitech: Netwerk Performance ↑ ook als NW IT =

• Maar voor meer performance is NW IT voorwaarde?

– Aces Direct: Netwerk Performance ↑ ↑ als NW IT ↑ ↑

– Kantonnal Banken: Netwerk Performance ↓ als NW IT ↓• Maar misschien tzt per cluster NW IT ↑ ↑ en performance ↑ ↑

• Governance van netwerk en IT– Vanuit focal actor perspectief (?)– Balans tussen interne IT, IT binnen netwerk en IT met andere

netwerken

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Netwerkvorming in de bancaire sector: Swiss survey shows increasing outsourcing activities by 2010

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10

20

30

40

50

60

70

80

90

100

RW

MK

HR

BS IT

PE

W

FP

L

RE

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AP

M

RIM

KW

O

KR

DP

SD

KA

E

KR

T

KA

A

WA

E

WH

A

WA

A

ZB

E

ZA

E

ZA

A

KO

K

HY

K

RB

PB

IVV

CB IB

N=54Kernkompetenzprofil bei Banken (DACH)Kernkompetenzprofil bei Banken (DACH)

ADM Paymentexecution

SecuritiesLoans

Value adding activities of banks (n=54)

0

10

20

30

40

50

60

70

80

90

100

RW

MK

HR

BS IT

PE

W

FP

L

RE

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AP

M

RIM

KW

O

KR

DP

SD

KA

E

KR

T

KA

A

WA

E

WH

A

WA

A

ZB

E

ZA

E

ZA

A

KO

K

HY

K

RB

PB

IVV

CB IB

HeuteZukunft

Eigenfertigungsprofil bei Banken (DACH)N=54

Degree of inhouse

organization(n=54)

2005

2010

2005

2010

SalesCompetencecenters

SettlementSupport

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Networkability – design objects

• Products and services– Degrees of modularization/ specificity of adaptations/ multiple usability

• Processes– Transparency for partners/ openness of information exchange/ existence of

conflict management system/ inter-organizational monitoring/ coordination scenarios

• Organization structure– Distribution of power/ homogeneity of organizational structures/ granularity

and flexibility of organizational units/ ## internal&external partners• Employees

– Ability for personal networks/ ability to acquire information• Culture

– Distribution of benefits between the partners (reciprocity)/ intensity of exchange of knowledge and experiences/ lived openess/ dealing with trust

• Information Systems– Use of application and communication standards/ form of IT integration (EDI;

remote login; ERP@Web)/ security mechanisms & access rights