Networkability van Netwerken?

1. Networkability van Netwerken? Bedrijvendag Gridforum – 25 juni 2007 Dr. Martin Smits Center for Research on Information Systems and Management (CRISM) School of Economics and Business Administration m.t.smits@uvt.nl

2. Tilburg University

3. “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)

4. Bediening via RT3? Belkin TuneCast™ Mobile FM Transmitter Signaal naar Aux? Voeding? Bediening via ipod? GRID: een zegen voor de consument? en…… Navigatie op postcode? Navteq? MagnetiMarelli?

5. Networkability van Netwerken? • B2C → B2B • Intro: • Netwerk • business bus • networkability • performance • Voorbeelden: • Unitech netwerk • Aces Direct netwerk • Kantonal Bank netwerk • En dan?

6. 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

7. 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]

8. (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”

9. Netwerkorganisatie Firm performance Firm 1 IOS/ relationship Whole Network; ‘Smart Business Network’ Firm a Firm b Network performance Firm c Firm N

10. Veel voorbeelden van de behoefte aan efficiente netwerkvorming Netwerkvorming Beeindigen samenwerking Opstarten samenwerking Uitvoering samenwerking Entry barriers Stroomlijnen Transacties Exit barriers

11. (2) Business Bus Netwerkorganisatie en IT infrastructuur

12. (2) Business Bus . . . . . . . . . Insurance Rent-a-car Police Accessories Garage Driver Producere.g. Car manufacturer Product documentation Publish Information Integratore.g. Dealer Customere.g. Car owner Configure Configure Production planning Finance Finance Payment . . . . . . . . . Business Bus e Servicee.g. Bill presentation eServicee.g. Credit rating eServicee.g. Directory service eService. . .

13. (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) Product en Services (Modularization; digitization..) 4 4 3 3 2 2 Employees (ability to.. acquire inf) Proces (transparatie Conflict mgmnt) Process 1 1 0 0 Organization Structures (power distribution; granulariteit; etc) Information Systems (standaarden; integratie) Networkability bepaalt de efficientie van netwerkvorming door een individuele organisatie [Oesterle, Alt, 2002]

14. Vier soorten netwerk-onderzoek (IT performance, business performance) (e.g.: Structuur, Processen, Relaties, Governance, IT gebruik, Business bus Networkability) Provan ea, 2007 Alt & Smits, 2007

15. 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…

16. Unitech

17. Taiwanese customers Apple HP ea sales, distribution BU1 (40) material suppliers in Taiwan design, production, sales, distribution BU2 Sales, distribution USA Sales, distribution China design, production Sales, distribution EMEA BU3 Sales, distribution Japan Unitech (in 2000: 360 fte, $ 170 m)‘handheld scanners (ADC) for commercial logistics’

18. Netwerk structuur 1997 Material Supplier 1 < retailer Customers < Material Supplier 2 retailer < Unitech Taiwan R&D, Manufacturing Marketing, Sales retailer 0 Material Supplier 3 < = retailer < Material Supplier N > retailer > Intel NEC, Sony, Philips

19. Netwerk structuur 2001 Unitech Other branches Material Supplier 1 retailer Customers EMEA retailer Material Supplier 2 retailer Unitech Taiwan R&D, Manuf Unitech Europe Sales, Distr Material Supplier 3 retailer Material Supplier N retailer 40 Third party Solution Providers Europe Third party Solution Providers Taiwan Intel NEC, Sony, Philips

20. Netwerk structuur 2007 Unitech Other branches 30% Material Supplier 1 retailer 10 System Integr Customers In Europe retailer Material Supplier 2 retailer Unitech Taiwan R&D, Manuf Unitech Europe Sales, Distr Material Supplier 3 7 Value Added Distri- butors retailer € 8 M/yr Material Supplier N retailer 65% Third party Solution Providers Taiwan Intel NEC, Sony, Philips

21. Governance?

22. 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).

23. Networkability Scores Unitech Unitech Taiwan Taiwan Unitech Europa Unitech Europa Product Product 4 4 3 3 2 2 Employee Employee Process Process 1 1 0 0 Organization Structures Organization Structures Information Systems Information Systems

24. 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

25. Bevindingen Unitech Case • Complexe relatie tussen ‘structuur van netwerken’, ‘networkability van organisaties’ en ‘netwerk performance’ • Aanwijzingen dat netwerk performance sterk kan verbeteren zonder substantiele networkability van IT … maar verdere ontwikkeling wordt belemmerd als IT networkability laag is …. (?)

26. ACES DIRECT

27. Aces Direct IT retail in Nederland Lease Companies DHL BB lease services BB Physical distribution services BB product specification services Icecat BB IT services IT companies BB order processing services Onetrail OEMs Ingram Micro Microsoft Copaco HP Business client TechData Aces Direct 6 7 HP ECT Pluz Toshiba SMEs IT retail markt (NL): € 2 mrd /jr AD 1-2% markt aandeel; 17 fte TD (NL) € 400 mln/yr

28. Networkability Scores

29. 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

30. 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

31. 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 Swiss banking

32. Eén network voor de cantonal bank group (1995) Business customers Internal services RTC Business Bus centralized services (e.g. product data) RTC ERP Schaffhausen Swisscanto Funds RTC ERP Appenzell RTC ERP Glarus RTC ERP Uri VESECA Credit Card RTC ERP Wallis Neuenburg RTC ERP RTC ERP Schwyz Graubunden RTC ERP Nid & Obwalden RTC ERP Frbourg RTC ERP RTC ERP Jura SWIFT RTC ERP Aargau RTC ERP Bern Foreign Exchanges RTC ERP Basel RTC ERP Zurich Reuters RTC ERP Lucerne RTC ERP St. Gallen Bloomberg RTC ERP Thurgau External services

33. Drie netwerken voor de cantonal bank group (2006) Business customers FINOVA Business Bus (Data en Process standards) FINOVA ERP Schaffhausen Internal servics FINOVA ERP Appenzell Swisscanto Funds FINOVA ERP Glarus FINOVA ERP Uri FINOVA ERP Wallis • 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 VESECA Credit Card Neuenburg FINOVA ERP FINOVA ERP Schwyz FINOVA ERP Graubunden FINOVA ERP Nid & Obwalden Frbourg FINOVA ERP RTC Business Bus RTC ERP Jura SWIFT RTC ERP Aargau RTC ERP Bern Foreign Exchanges RTC ERP Basel AVALOQ Business Bus AVALOQ ERP Zurich Reuters AVALOQ ERP Lucerne AVALOQ ERP St. Gallen Bloomberg AVALOQ ERP Thurgau External services

34. 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)

35. 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

37. Netwerkvorming in de bancaire sector: Swiss survey shows increasing outsourcing activities by 2010 Degree of inhouse organization(n=54) ADM Loans Securities Paymentexecution Value adding activities of banks (n=54) Competence centers Settlement Sales Support 37

38. 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