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Roadmap for e-business implementation in Extended Enterprises
Page 1
Project funded by the European Community under the ‘Competitive and Sustainable Growth’ Programme (1998-2002)
e-volution – Road map for e-business implementation in Extended Enterprises
Training material for e-volution methodology
Roadmap for e-business implementation in Extended Enterprises
Page 2
Project funded by the European Community under the ‘Competitive and Sustainable Growth’ Programme (1998-2002)
Table of content
Introduction
Methodology Module 1: Definition of Business Objective System
Methodology Module 2: Organisation Analysis
Methodology Module 3: Market Analysis
Methodology Module 4: E-business Strategy and Roadmap Formulation
Roadmap for e-business implementation in Extended Enterprises
Page 3
Project funded by the European Community under the ‘Competitive and Sustainable Growth’ Programme (1998-2002)
Introduction
Roadmap for e-business implementation in Extended Enterprises
Page 4
Project funded by the European Community under the ‘Competitive and Sustainable Growth’ Programme (1998-2002)
The e-volution concept - successful implementation of e-business in Extended Enterprises
e-business road e-business road mapping methodologymapping methodologye-business road e-business road mapping methodologymapping methodology
Software toolsSoftware toolsSoftware toolsSoftware tools
The methodology is the starting point for the use of phase specific, supporting software tools.
Training packageTraining packageTraining packageTraining package
The e-volution training package is for transfer and teaching how to apply the e-business road mapping model, methods and tools.
Content ServiceContent ServiceContent ServiceContent Service
Based on approved models, e-volution offers an e-business road mapping methodology that fulfils the requirements of a systematic and goal-oriented planning of e-business implementation.
The e-volution Content Service disseminates the e-business road mapping model with its methods and tools but also know-how about e-business.
Market analysis
Definition of businessobjective system
Organisation analysis
e-business strategy androadmap formulation
e-business operation
e-business requirementanalysis
e-business implementation
OUT OF PROJECT SCOPEROADMAP IMPLEMENTATION DECISIONPROJECT SCOPE
METHODOLOGY
SUPPORT
Methodology + Tool Training
TOOl SUPPORTTOOL SUPPORT
e-business design
Roadmap for e-business implementation in Extended Enterprises
Page 5
Project funded by the European Community under the ‘Competitive and Sustainable Growth’ Programme (1998-2002)
Methodology Purpose Enabling methodology for implementation, adaptation and
optimisation of e-business strategies for Extended Enterprises, covering the whole supply chain
Consolidation of existing and new know-how, methods and instruments, and expertise from science and consulting praxis for e-business strategy development in an integrative approach
Framework for integration, processing and coordination of e-business related management activities
Fields of application Strategic e-business planning inside EE constellation as
enabler for the EE business concept Preparation of e-business related decision making
Concept Thematic modules Methods Instruments
Market analysis
Definition of businessobjective system
Organisation analysis
e-business strategy androadmap formulation
e-business operation
e-business requirementanalysis
e-business implementation
OUT OF PROJECT SCOPEROADMAP IMPLEMENTATION DECISIONPROJECT SCOPE
METHODOLOGY
SUPPORT
Methodology + Tool Training
TOOl SUPPORTTOOL SUPPORT
e-business design
Roadmap for e-business implementation in Extended Enterprises
Page 6
Project funded by the European Community under the ‘Competitive and Sustainable Growth’ Programme (1998-2002)
Software tool-kit
Purpose Integrated software suite to support and enable
efficient methodology application (e-volution tool-kit) Interactive tools for use within workshops, individual
or remote working sessions Data and information processing, documentation and
reporting
Fields of application Data and information processing Management decision support Data warehousing
WEB
Roadmap for e-business implementation in Extended Enterprises
Page 7
Project funded by the European Community under the ‘Competitive and Sustainable Growth’ Programme (1998-2002)
Objectives and benefits of the training concept
• Development of overall understanding about the e-volution concept and how to use the methodology and software tool-kit in practice
• Development of skills for method and software tool application by target groups in practice
Roadmap for e-business implementation in Extended Enterprises
Page 8
Project funded by the European Community under the ‘Competitive and Sustainable Growth’ Programme (1998-2002)
Agenda: Training on Methodology Module 1
Step 1: Introduction– Purpose and objectives, structure, positioning– Practical application environment
Step 2: Methodological approach
Step 3: Tool-kit support
Roadmap for e-business implementation in Extended Enterprises
Page 9
Project funded by the European Community under the ‘Competitive and Sustainable Growth’ Programme (1998-2002)
Module 1 purpose and objectives
Module purpose • development of a common and homogeneous understanding about the enterprise, its high-level business objectives and strategies
• analysis, description and presentation of hierarchy of business objectives for the Extended Enterprise as well as the single enterprise
• Provision of:
1. decision support regarding solution alternatives
2. transparency about the position of an entity resp. its contribution to the organisation’s success
3. communication of changing framework conditions in an entity
Roadmap for e-business implementation in Extended Enterprises
Page 10
Project funded by the European Community under the ‘Competitive and Sustainable Growth’ Programme (1998-2002)
Module 1 purpose and objectives
Field of application • strategic enterprise positioning• strategic enterprise planning• development of corporate enterprise identity• business model specification• enterprise presentation and business purpose
communication
Roadmap for e-business implementation in Extended Enterprises
Page 11
Project funded by the European Community under the ‘Competitive and Sustainable Growth’ Programme (1998-2002)
Module 1 structure
Definition of strategicbusiness objectives
Enterprisebusiness
vision definition
Enterprisebusiness
mission definition
Enterprisebusiness
objective definition
Market analysis
Definition of businessobjective system
Organisation analysis
e-business strategy androadmap formulation
e-business operation
e-business requirementanalysis
e-business implementation
OUT OF PROJECT SCOPEROADMAP IMPLEMENTATION DECISIONPROJECT SCOPE
METHODOLOGY
SUPPORT
Methodology + Tool Training
TOOl SUPPORTTOOL SUPPORT
e-business design
Roadmap for e-business implementation in Extended Enterprises
Page 12
Project funded by the European Community under the ‘Competitive and Sustainable Growth’ Programme (1998-2002)
Relationships to other methodology modules
Market analysis
Definition of businessobjective system
Organisation analysis
e-business strategy androadmap formulation
e-business operation
analysise-business implementation
OUT OF PROJECT SCOPEROADMAP IMPLEMENTATION DECISIONPROJECT SCOPE
METHODOLOGY
SUPPORT
Methodology + Tool Training
TOOl SUPPORTTOOL SUPPORT
e-business design
Module 3: Market Analysis• Detailed analysis about markets
segments, position, competitors and customers
Module 4: e-business strategyformulation• Strategy development and
assessment• Roadmap definition
Module 2: Organisation Analysis• Detailed analysis about the EE
organisation from structural, competence and ability points of view
Roadmap for e-business implementation in Extended Enterprises
Page 13
Project funded by the European Community under the ‘Competitive and Sustainable Growth’ Programme (1998-2002)
Agenda: Training on Methodology Module 1
Step 1: Introduction– Purpose and objectives, structure, positioning– Practical application environment
Step 2: Methodological approach
Step 3: Tool-kit support
Roadmap for e-business implementation in Extended Enterprises
Page 14
Project funded by the European Community under the ‘Competitive and Sustainable Growth’ Programme (1998-2002)
Module 1 practical application environment
Organisation • Intra- or inter-enterprise workshops or online session
• Definition of key personnel participants (max. 20 participants) from different entities
Demands on participants • Knowledge about enterprise, direct enterprise environment, market, and general business environment
Time need • Central workshop approach: 1-2 workshops
• Decentralised web-based online sessions: predefined period of time
Roadmap for e-business implementation in Extended Enterprises
Page 15
Project funded by the European Community under the ‘Competitive and Sustainable Growth’ Programme (1998-2002)
Module 1 practical application environment
Web-based online sessions
• Platform configuration and preparation
• In-advance information (purpose, objectives, benefits, participants, organisation)
• Invitation (access information, time schedule)
• Reporting
Preparation of coordinator/moderator
Workshop
• In-advance information and invitation of participants
• Presentation material
• Moderation methods and instruments (e.g. Flipchart, Overhead, Beamer, Meta-Plan)
• Documentation and minutes
Roadmap for e-business implementation in Extended Enterprises
Page 16
Project funded by the European Community under the ‘Competitive and Sustainable Growth’ Programme (1998-2002)
Agenda: Training on Methodology Module 1
Step 1: Introduction– Purpose and objectives, structure, positioning– Practical application environment
Step 2: Methodological approach
Step 3: Tool-kit support
Roadmap for e-business implementation in Extended Enterprises
Page 17
Project funded by the European Community under the ‘Competitive and Sustainable Growth’ Programme (1998-2002)
Module 1 overview
Definition of strategicbusiness objectives
Enterprisebusiness
vision definition
Enterprisebusiness
mission definition
Enterprisebusiness
objective definition
Market analysis
Definition of businessobjective system
Organisation analysis
e-business strategy androadmap formulation
e-business operation
e-business requirementanalysis
e-business implementation
OUT OF PROJECT SCOPEROADMAP IMPLEMENTATION DECISIONPROJECT SCOPE
METHODOLOGY
SUPPORT
Methodology + Tool Training
TOOl SUPPORTTOOL SUPPORT
e-business design
Roadmap for e-business implementation in Extended Enterprises
Page 18
Project funded by the European Community under the ‘Competitive and Sustainable Growth’ Programme (1998-2002)
Enterprise business vision/mission definition
Fundamentals • enduring statement that distinguishes one enterprise from other similar enterprises
• important to• insure unanimity of purpose,• arouse positive feelings about the enterprises,• provide direction,• provide a basis for objectives and strategies,• serve as a focal point,• create consensus on specific strategies and
objectives,• resolve divergent views among managers
Roadmap for e-business implementation in Extended Enterprises
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Project funded by the European Community under the ‘Competitive and Sustainable Growth’ Programme (1998-2002)
Enterprise business vision definition
Writing the business vision for the enterprise
Visualisation, discussion and assessmentof individual business visions
Decision about vision statement of the enterprise
Formulation and publication of business vision
Roadmap for e-business implementation in Extended Enterprises
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Project funded by the European Community under the ‘Competitive and Sustainable Growth’ Programme (1998-2002)
Enterprise business vision definition
Purpose "What does the enterprise want to become?"• first step in strategic business planning• clear vision provides the foundation for development
of a comprehensive mission statement• direction of all business actions toward this vision
Content • enterprise's sense of future direction• dream for an ideal state• concise declaration of the direction that an enterprise
is planning to take into the future
Roadmap for e-business implementation in Extended Enterprises
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Project funded by the European Community under the ‘Competitive and Sustainable Growth’ Programme (1998-2002)
Enterprise business vision definition
Design guidelines • short• preferably• meaningful• one sentence• Instigation and inspiration for action and achievement
among employees• Integration of motivation• Integration of changing aspects or motivation
Roadmap for e-business implementation in Extended Enterprises
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Project funded by the European Community under the ‘Competitive and Sustainable Growth’ Programme (1998-2002)
Enterprise business mission definition
Writing the business vision for the enterprise
Visualisation, discussion and assessmentof individual business mission
Decision about mission statement of the enterprise
Formulation and publication of business mission
Roadmap for e-business implementation in Extended Enterprises
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Project funded by the European Community under the ‘Competitive and Sustainable Growth’ Programme (1998-2002)
Enterprise business mission definition
Purpose • Enterprise definition in a concise and clear manner• Provision of vivid picture of what is unique about the
enterprise to the reader• Alignment of every program and activity in the
enterprise to the mission
Design guidelines • less than 200 words• longer than a phrase or sentence, but not a two page
document• not be too specific (can alienate managers and stifle
creativity)• Inspiring• enduring though not cast in stone
Roadmap for e-business implementation in Extended Enterprises
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Project funded by the European Community under the ‘Competitive and Sustainable Growth’ Programme (1998-2002)
Enterprise business mission definition
Content • Customers and target markets• Products/Services for customers• Geographic markets• Technology• Concern for Survival/Growth/Profits• Philosophy (values, ethics, beliefs)• Public Image• Employees• Distinctive competence and Unique Selling Position
(USP)
Roadmap for e-business implementation in Extended Enterprises
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Project funded by the European Community under the ‘Competitive and Sustainable Growth’ Programme (1998-2002)
Enterprise business objective definitionInformation of participants
Definition and collection of business problems and objectives by means of creativity methods
Clustering of business objectives
Presentation and completion of clustered business objectives
Systems Thinking of business objectives
Priority definition and presentation of business objectives
Roadmap for e-business implementation in Extended Enterprises
Page 26
Project funded by the European Community under the ‘Competitive and Sustainable Growth’ Programme (1998-2002)
No wind is good for someone who does not know where he wants to sail to.
(Montaigne)
Common objectives ...
... align all entities to the same business objectives
Different objectives ...
... result in different prioritiesfor actions
Need for business objectives
Roadmap for e-business implementation in Extended Enterprises
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Project funded by the European Community under the ‘Competitive and Sustainable Growth’ Programme (1998-2002)
Information
by Moderator overall aim, purpose and approach
by management enterprise vision, mission, guidelines
Participants
Enterprise(s) management, head of departments, works council, employees
Moderator Discussion leader and assistants
Information of participants
Roadmap for e-business implementation in Extended Enterprises
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Project funded by the European Community under the ‘Competitive and Sustainable Growth’ Programme (1998-2002)
Source: Kreikebaum 1989; Pfeiffer/Randolph 1981; Steinmann/Schreyögg 1990; Zäpfel 1989; -> Planungssysteme
Business strategy
Serves the purpose of definition of high-level business objectives and of general framework for long term enterprise development.
Tactics are mid term specifications of the business strategy in the sense of selection and assessment of relevant business activities
Functional activities
Are for short term realisation of business strategy in practice by means of business activities defined by tactics
Sicherung der Arbeitsplätze durchUmsatzsteigerung von 10% pro Jahr
Gewinnsteigerung neue Produkte undvon 6 auf 10% Leistungen in alten
Märkten
Sicherung der Arbeitsplätze durchUmsatzsteigerung von 10% pro Jahr
Gewinnsteigerung neue Produkte undvon 6 auf 10% Leistungen in alten
Märkten
- 100% Qualität
ZeitIST
SOLL
Qua
lität
Qualität Ökologie
Ökonomie
Zeit Innovations-fähigkeit
Flexi-bilität
Fundamentals
Roadmap for e-business implementation in Extended Enterprises
Page 29
Project funded by the European Community under the ‘Competitive and Sustainable Growth’ Programme (1998-2002)
Vision
Strategic objectives
Tactic objectives
Functional objectives
Business objective definition process
Sicherung der Arbeitsplätze durchUmsatzsteigerung von 10% pro Jahr
Gewinnsteigerung neue Produkte undvon 6 auf 10% Leistungen in alten
Märkten
Sicherung der Arbeitsplätze durchUmsatzsteigerung von 10% pro Jahr
Gewinnsteigerung neue Produkte undvon 6 auf 10% Leistungen in alten
Märkten
Qualität Ökologie
Ökonomie
Zeit Innovations-fähigkeit
Flexi-bilität
- 100% Qualität
Zeit
Qua
lität
Business structure designStrategy formulation
Mission
Roadmap for e-business implementation in Extended Enterprises
Page 30
Project funded by the European Community under the ‘Competitive and Sustainable Growth’ Programme (1998-2002)
Definition of business objectivesSuitable creativity methods• Open discussion• Brainstorming• Feedback method• …Instruments and tools• Flipchart• Pin wall• Empty sheet of paper• …
Shorter delivery times
Higher productivity
Staff training
Better delivery quality Less process
interfaces
Better coordination
Closer customer
relationships
Work time concepts
Tools• Web-based discussion and
communication platformWEB
Roadmap for e-business implementation in Extended Enterprises
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Project funded by the European Community under the ‘Competitive and Sustainable Growth’ Programme (1998-2002)
Product Information Service Marketing
Reklamations-quote
Anforde-rungsgerech-tes Produkt...
Qualität der Unterlagen
Übersichtliche Kataloge
...
Ständige Ansprechbar-keitKundenservice
...
Verbindliche Zusagen
Liefertreue
...
exte
rnal
Kundenge-rechte Verpackung...
Reklamations-bearbeitung
...
Reaktion auf Kundennach-fragen...
inte
rnal
Clustering of business objectives
e.g. Balanced Scorecard (BSC) concept e.g. Main business objectives
Time/Costs/Quality/Flexibility/Ecology/…
Source: Kaplan, R. S.; Norton, D. P.: Balanced Scorecard, 1997
Roadmap for e-business implementation in Extended Enterprises
Page 32
Project funded by the European Community under the ‘Competitive and Sustainable Growth’ Programme (1998-2002)
Cause effect analysis of business objectives
Definition of interactions and dependencies of business objectives and identification of system impact and control variables
e.g. System Thinking and System Dynamics
Influence
Impact
Elements don‘t have to be observed, represent only impacts but no cause
reactive criticalThe right appraisement of efforts for the observation of elements is fundamental here
uncritical
These elements have to be observed marginally, elements only have weak influence
active
Observation of elements in any caseEarly indicators
Roadmap for e-business implementation in Extended Enterprises
Page 33
Project funded by the European Community under the ‘Competitive and Sustainable Growth’ Programme (1998-2002)
Priority definition by means of one-by-one comparison
Inno
vatio
n
Tim
e
Cos
ts
Fle
xibi
lity
Eco
log
y
Qua
lity
Innovation
Time
Costs
Flexibility
Ecology
Quality
0 less important1 Same importance2 More important
… than
0
1
2
0
0
0 0 0
0 0 0
2 2
2
2 2
2 2
2 2
2 2
0
0
0
0
12 7
4
7
10
1
1
1
1
Tot
al a
sses
smen
t
Time
Costs
Quality
. . . . . .
. . . . . .
. . . . . .
Objective clusters are prioritised by means of one-by-one comparison
Roadmap for e-business implementation in Extended Enterprises
Page 34
Project funded by the European Community under the ‘Competitive and Sustainable Growth’ Programme (1998-2002)
Saving jobs by annual turnover increase of 10%
Profit increase from New products and von 6 auf 10% services in existing
markets
Saving jobs by annual turnover increase of 10%
Profit increase from New products and von 6 auf 10% services in existing
markets
Quality Ecology
Costs
Flexi-bility
Time Innovation
Presentation of business objectives by means of pyramid of objectives
Starting point for strategic organisation and market
analysis
Guidelines for process and organisation design
Roadmap for e-business implementation in Extended Enterprises
Page 35
Project funded by the European Community under the ‘Competitive and Sustainable Growth’ Programme (1998-2002)
Agenda: Training on Methodology Module 1
Step 1: Introduction– Purpose and objectives, structure, positioning– Practical application environment
Step 2: Methodological approach
Step 3: Tool-kit support
Roadmap for e-business implementation in Extended Enterprises
Page 36
Project funded by the European Community under the ‘Competitive and Sustainable Growth’ Programme (1998-2002)
OrganisationAnalyser General features• features the resource based strategic business situation analysis in an
EE regarding mainly qualitative aspects of an organisation• based on an interview approach• provides a set of basic, interview and questionnaire templates• open for individual configuration• runs as a web application on Windows 95/98/2000/NT/XP
systems• The OM tool features identification of EE partners goal system
(mission, vision, goals), competences and e-abilities as basis for strength and weakness analysis
The OM software tool is:• Interactive: The user is provided with appropriate questionnaires for
data and information input, inputs are recorded, information is assimilated, analyses are performed, and results are displayed for the user
• Participative: The tool provides a network environment for collaboration between different users. Users complete the process and all of their responses are combined and analysed as a group to accurately account for all individuals and to effectively represent the collective knowledge of all participants
• Configurable: The tool provides functionalities for customisation or development of user specific analyses
Analysis of EE partners system of business objectives (mission, vision, objectives)
Roadmap for e-business implementation in Extended Enterprises
Page 37
Project funded by the European Community under the ‘Competitive and Sustainable Growth’ Programme (1998-2002)
OrganisationAnalyser General Features Data acquisition and analysis software for inquires
Web-based for decentralize, time independent processing Online (Internet and Intranet) and offline (local) applicable Project oriented user management Inquiry management
numeral inquire methods Free configurable inquire possibilities Free scaling (number of users and inquires) Analysis- and documentation function
e-volution Features Analysis instrument for specific EE levels
Strategic level (goal system) Socio-informal level (competencies and skills) Information level (competencies and IT-infrastructure)
Roadmap for e-business implementation in Extended Enterprises
Page 38
Project funded by the European Community under the ‘Competitive and Sustainable Growth’ Programme (1998-2002)
Administration
User roles and rights
• Administrator: user management
• Interview manager: interview management (design, invitation, processing, analysis)
• User: registration, interview processing
Roadmap for e-business implementation in Extended Enterprises
Page 39
Project funded by the European Community under the ‘Competitive and Sustainable Growth’ Programme (1998-2002)
Interview processing
• Structure: Interview\questionnaire\question
• By going step by step the user will be introduced to the structure
• Fixed structure, designed by interview manager
• There can be numerous questions to different topics
• Each question has its own evaluation
• No need to do answer questions at, multi-session option
Roadmap for e-business implementation in Extended Enterprises
Page 40
Project funded by the European Community under the ‘Competitive and Sustainable Growth’ Programme (1998-2002)
Interview analysis
• Analysis by Interview manager
• Standard analysis and report options: diagrams, lists
• Export function to MS-Excel
Roadmap for e-business implementation in Extended Enterprises
Page 41
Project funded by the European Community under the ‘Competitive and Sustainable Growth’ Programme (1998-2002)
Agenda: Training on Methodology Module 2
Step 1: Introduction– Purpose and objectives, structure, positioning– Practical application environment
Step 2: Methodological approach
Step 3: Tool-kit support
Roadmap for e-business implementation in Extended Enterprises
Page 42
Project funded by the European Community under the ‘Competitive and Sustainable Growth’ Programme (1998-2002)
Module 2 purpose and objectives
Module purpose • identification and analysis of organisational aspects which have affects on the development of an e-business strategy and how they affect the decision making process
• Methodological approach and supporting software tool for resource based EE analysis
• Identification of e-business use, practices and potentials based on organizational ‘hard’ and ‘soft’ facts
• Identification of organization related strengths and weaknesses as basis for e-business strategy development within the scope of EE concept realisation
Provision of:
1. decision support regarding solution alternatives
2. transparency about the position of an entity resp. its contribution to the organisation’s success
3. communication of changing framework conditions in an entity
Roadmap for e-business implementation in Extended Enterprises
Page 43
Project funded by the European Community under the ‘Competitive and Sustainable Growth’ Programme (1998-2002)
Module 2 purpose and objectives
Field of application • Business objective system definition• analysis of organisational, technological and human
e-competences • strategic forecasting and early warning analysis• core competence analysis, the life-blood of the EE, as
basis for realisation of extended, more competitive products and services
• collaborative and transparent EE benefit definition
Roadmap for e-business implementation in Extended Enterprises
Page 44
Project funded by the European Community under the ‘Competitive and Sustainable Growth’ Programme (1998-2002)
Module 2 structure
Market analysis
Definition of businessobjective system
Organisation analysis
e-business strategy androadmap formulation
e-business operation
e-business requirementanalysis
e-business implementation
OUT OF PROJECT SCOPEROADMAP IMPLEMENTATION DECISIONPROJECT SCOPE
METHODOLOGY
SUPPORT
Methodology + Tool Training
TOOl SUPPORTTOOL SUPPORT
e-business design
e-businessability analysis
Corecompetence
analysis
EE benefitanalysis
Strength-Weakness definition
e-businessability analysed
Corecompetence
analysed
EE benefitanalysed
Market analysis
Strengths-Weaknesses defined
StartOrganisational
module
Strategic EarlyWarning System
analysis
SEWSanalysed
Need for SEWSAnalysisidentified
Roadmap for e-business implementation in Extended Enterprises
Page 45
Project funded by the European Community under the ‘Competitive and Sustainable Growth’ Programme (1998-2002)
Relationships to other methodology modules
Market analysis
Definition of businessobjective system
Organisation analysis
e-business strategy androadmap formulation
e-business operation
analysise-business implementation
OUT OF PROJECT SCOPEROADMAP IMPLEMENTATION DECISIONPROJECT SCOPE
METHODOLOGY
SUPPORT
Methodology + Tool Training
TOOl SUPPORTTOOL SUPPORT
e-business design
Module 3: Market Analysis• Detailed analysis about markets
segments, position, competitors and customers
Module 4: e-business strategyformulation• Organizational analysis is basis
for identification of interfaces for the roadmap definition
Module 1: Business ObjectivesAnalysis• Create common understanding of
EE business objectives• Basis for targeted e-business
strategy formulation
Roadmap for e-business implementation in Extended Enterprises
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Project funded by the European Community under the ‘Competitive and Sustainable Growth’ Programme (1998-2002)
Agenda: Training on Methodology Module 2
Step 1: Introduction– Purpose and objectives, structure, positioning– Practical application environment
Step 2: Methodological approach
Step 3: Tool-kit support
Roadmap for e-business implementation in Extended Enterprises
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Project funded by the European Community under the ‘Competitive and Sustainable Growth’ Programme (1998-2002)
Module 2 practical application environment
Organisation • Intra- or inter-enterprise workshops or online session
• Definition of key personnel participants (max. 20 participants) from different departments
• No need for different EE-partners at one point of time
Demands on participants • Knowledge about enterprise, certain departments, financial situation, strategic background and purpose, e-business situation for the whole enterprise and strategic objectives, as well as about direct enterprise environment
Time need • Central workshop approach: 2-3 workshops
• Followed by decentralised web-based online sessions: predefined period of time
Roadmap for e-business implementation in Extended Enterprises
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Project funded by the European Community under the ‘Competitive and Sustainable Growth’ Programme (1998-2002)
Module 2 practical application environment
Web-based online sessions
• Platform configuration and preparation
• In-advance information (purpose, objectives, benefits, participants, organisation)
• In-advance need for information collection from the participants side – scripts handed over at workshop
• Invitation (access information, time schedule)
• Reporting
Preparation of coordinator/moderator
Workshop
• In-advance information and invitation of participants
• Presentation material to prepare online session
• Moderation methods and instruments (e.g. Flipchart, Overhead, Beamer, Meta-Plan)
• Documentation and minutes
Roadmap for e-business implementation in Extended Enterprises
Page 49
Project funded by the European Community under the ‘Competitive and Sustainable Growth’ Programme (1998-2002)
Agenda: Training on Methodology Module 2
Step 1: Introduction– Purpose and objectives, structure, positioning– Practical application environment
Step 2: Methodological approach
Step 3: Tool-kit support
Roadmap for e-business implementation in Extended Enterprises
Page 50
Project funded by the European Community under the ‘Competitive and Sustainable Growth’ Programme (1998-2002)
Module 2 structure
Market analysis
Definition of businessobjective system
Organisation analysis
e-business strategy androadmap formulation
e-business operation
e-business requirementanalysis
e-business implementation
OUT OF PROJECT SCOPEROADMAP IMPLEMENTATION DECISIONPROJECT SCOPE
METHODOLOGY
SUPPORT
Methodology + Tool Training
TOOl SUPPORTTOOL SUPPORT
e-business design
e-businessability analysis
Corecompetence
analysis
EE benefitanalysis
Strength-Weakness definition
e-businessability analysed
Corecompetence
analysed
EE benefitanalysed
Market analysis
Strengths-Weaknesses defined
StartOrganisational
module
Strategic EarlyWarning System
analysis
SEWSanalysed
Need for SEWSAnalysisidentified
Roadmap for e-business implementation in Extended Enterprises
Page 51
Project funded by the European Community under the ‘Competitive and Sustainable Growth’ Programme (1998-2002)
Input data from Module 1
• enduring statement that distinguishes one enterprise from other similar enterprises
• enterprise's sense of future direction
Business vision definition
• Enterprise definition in a concise and clear mannerBusiness mission definition
• Basis for strategy development
• Definition of all objectives
• Clustering of objectives
• Prioritising of goals (e.g. with BSC)
Business objectives definition
Roadmap for e-business implementation in Extended Enterprises
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Project funded by the European Community under the ‘Competitive and Sustainable Growth’ Programme (1998-2002)
EE benefit analysisObjectives Definition of expected performance potentials of EE
members Possible benefit potentials are complex
can be divided into four main categories: resources, risks, costs, and results
Independent assignment
Results Overview of benefits for all independent and interdependent
enterprises Results should be used for the OM analysis Results should be pointed out and used in the ongoing
analysis
Roadmap for e-business implementation in Extended Enterprises
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Project funded by the European Community under the ‘Competitive and Sustainable Growth’ Programme (1998-2002)
EE benefit analysis balancing of partners’ resource deficits Development of resource compound effect (synergy),
addition and/or supplementation
RESOURCE benefit
error adjustment due to the availability of increased partner’s know-how within areas such as development, production or marketing.
RISK benefit
Cost digression can be reached because of size advantages with the help of determined merging activities and a resulting better use of technical and human resources
COST benefit
broader utilization spectrum of single performances and/or products by the combination of the product and service spectrum, which are brought by the partner into co-operation, to complete performance, which makes the development of the extended and quantitatively attractive field of application possible
RESULT benefit
Roadmap for e-business implementation in Extended Enterprises
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Project funded by the European Community under the ‘Competitive and Sustainable Growth’ Programme (1998-2002)
E-business ability analysis
Objectives Identification used e-applications in each organization regarding the
processes Identification of processes where e-applications are used most Evaluation of product employee competencies regarding the e-
applications Additional questions regarding the awareness and the importance
of e-abilities in the screened organization
Results Overview about existing bought or self-made e-applications, there
importance to the enterprise and the importance given to e-applications and e-abilities at all
Information should be used for the following: Interface design between EE partners (compatibility analysis) Intra- und inter-enterprise strengths and weaknesses analysis
regarding e-abilities and e-business strategy development
Start
ICTInfrastructurerequirement
analysis
Machineryinfrastructurerequirement
analysis
Human capabilityrequirement
analysis
ICTInfrastructurerequirement
analysed
Machineryinfrastructurerequirement
analysed
Human capabilityrequirement
analysed
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E-business ability analysis
Identification of currently already IT-supported businessoperations
identification of used applications
specification of e-business application type
assessment average user qualification regarding e-business application type
analysis of additional issues
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Project funded by the European Community under the ‘Competitive and Sustainable Growth’ Programme (1998-2002)
harbour ICEBERG
Monitoringof targets
Monitoring
of environment
Locatingthe position
Strategic Early Warning System Analysis
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Project funded by the European Community under the ‘Competitive and Sustainable Growth’ Programme (1998-2002)
• find all trends linked to a enterprise‘s future. What are the trends in society, business, economy and technology with relevance to our enterprise? Methods used to help this process are Brainstorming and - writing or so called ‘trend-workshops‘.
• filter all strategic issues. The result of the first step are sometimes between 70 to 100 trends. There is no way to handle this amount of information, the number has to be reduced.
• format all strategic issues. This includes an analysis and search for drivers of the situation, the identification of links between the drivers, the reconfiguration of links and the definition of easy scenarios.
• focus on practical actions: When does a enterprise has to react immediately on strategic issues and how can it monitor future developments with indicators? Monitoring allows a continuous focusing on important aspects.
Sequence of methods - FInd, FIlter, FOrmat, FOcus
Trends relevant max. 20
approx.100 trends
FIND FILTER FORMAT FOCUS
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Trend Finding
Kick-off 1. Trend brainstorming
• Define aims• Know-how
required • Define
participants• Check for
external experts• Design workshop
2. Trend brainstorming
• Invitation • Search for
experts• internal/external
investigation• Market and
customer analysis
• Moderation• Initial Lecture • Global Trends
• Clustering and consolidation
• if needed further internal/ external investigation or market and customer analysis
• Presentation of results
• Discussion, moderation
• conclusion
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Project funded by the European Community under the ‘Competitive and Sustainable Growth’ Programme (1998-2002)
The trend 3 Layer-model
enterprise
enterprise specificenvironment
global environment
economy
population
technology
ecology
politics
culture
law
branch
region
customers
suppliers
competitors
core-
competencies
products/solutions
enterprise structure
new generationof managers
Europeanintegration
Tele workHome Office
household
distri-butors
region
marketing
R&Dman
ufac
t.
3 Layer-model
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Project funded by the European Community under the ‘Competitive and Sustainable Growth’ Programme (1998-2002)
Filter with the 3 Layer-Model
Workshop „Construction 3 Layer-Model“
• Sort Trends • if needed: Analysis of the
characteristics, core competencies or strength and weaknesses
• if needed: Presentation of global trends
• Moderation, discussion
Workshop „3 Layer-Model“
• Complete Model with global trends
• Construction of the 3 Layer-Model
• Work with the Model • Identification of strategic
options based on trends and competences
• Discussion, clustering and consolidation of the strategic options
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Project funded by the European Community under the ‘Competitive and Sustainable Growth’ Programme (1998-2002)
Format by Sytem Thinking/Dynamics approach
Format-Workshop
• Identification of trends linked to the strategic option
• Defining the strength and the correlation of impact
• Building the network
„Network-Workshop“
• Computer based modeling
• Analysis of the network
• Presentation of the network and analysis results
• if needed: online simulation
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Project funded by the European Community under the ‘Competitive and Sustainable Growth’ Programme (1998-2002)
Example: Formatting of a strategic option for action
Question on networking: Which trends affect the strategic option for action XY?
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Project funded by the European Community under the ‘Competitive and Sustainable Growth’ Programme (1998-2002)
Exertion of influence
Impact
Elements don‘t have to be observed, represent only impacts but no cause
reactive criticalThe right appraisement of efforts for the observation of elements is fundamental here
uncritical
These elements have to be observed marginally, elements only have weak influence
active
Observation of elements in any caseEarly indicators
Focussing: Analysis of the network
Aim of analysis: Which trends have a huge impact in the network?
Result: Identification of the active influencing factors
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Project funded by the European Community under the ‘Competitive and Sustainable Growth’ Programme (1998-2002)
Focussing: Analysis of the network example: producer of office furniture
6
Observation of the indicator: „How important is the trend?“
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Project funded by the European Community under the ‘Competitive and Sustainable Growth’ Programme (1998-2002)
– Presentation of the enterprise with trends and strengths or weaknesses
– Evaluation of trends
– Deduction of strategic problems and Identification of options for action
– Identification of Indicators
– Reduction of efforts for observation and improvement of ability for early detection at the same time
– Visualisation and thus clarification of the developments
– Gain of knowledge about trends
– Stimulation of creativity in order to use opportunities of external developments
Results Benefit
Results and benefits
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Project funded by the European Community under the ‘Competitive and Sustainable Growth’ Programme (1998-2002)
E-business core competency analysisObjectives Selection of basic competencies from set of competences by means of
assessment due to factors like Organization Technique Human Resource
Analysis of balanced, critical, over valuated and basic competencies from set of competencies
Results Overview of core competencies of each EE partner, the trends, the
competitive relevance and the degree of mastery Information should be used further regarding the following concerns:
Evaluation and visualization of companies situation Determining core competencies as a starting point for new products and new
target markets Determine core competencies as a starting point for resource development
in the enterprise
Start
Competenceidentification
Competencesidentified
Definition ofbasic
competences
Basiccompetences
defined
Definition of corecompetences
Corecompetences
defined
Definition of corecompetencedevelopment
strategy
Corecompetencedevelopment
strategy defined
Strategic EarlyWarning System
use
SEWSused
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Project funded by the European Community under the ‘Competitive and Sustainable Growth’ Programme (1998-2002)
Core competence analysis
1. Identification of organisations abilities along the value chain
E-ability analysis is input Separation due to human, technological and
organizational aspects
2. Identification of organisation's product and service abilities
Identification and evaluation due to the uniqueness/ USP of the product/ service
3. Summary Information should be aggregated for the next step Done by an external person who is more objective Filter main aspects and double counts
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Project funded by the European Community under the ‘Competitive and Sustainable Growth’ Programme (1998-2002)
Core competence analysis4. Identification of competences from abilities
Each ability is assessed due to the question to figure the competencies out
Each ability needs to be assessed due to the three next points:
Potential door opener to a variety of markets Significant contributor to customer benefit Difficult to imitate by competitor
Done on a scale from 1-5 (1 means not correct, 5 correct)
5. Summary Abilities should get a value between 3 and 15 Threshold value of 10 → all abilities scoring 10 or
higher should be included in the further analysis
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Core competence analysis
6. Competence assessment The competencies that have been identified during the
previous steps are assessed and evaluated concerning two evaluation criteria: competitive relevance and degree of mastery by the organisation
Depending on the answers given by the users, the strengths or competences may be labelled core competences or not
5
18
114
17
43
6
21212
25152810
26
2224
13
19
87
2016
11
23 9
27
degree of masteryvery low low high very high
co
mp
ete
tiv
ere
lev
an
ce
very
low
low
high
very
high
critical competences
balanced competences
Over valued competences
basis-competences
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Project funded by the European Community under the ‘Competitive and Sustainable Growth’ Programme (1998-2002)
Core competence analysis
7. Core competence definition Depending on where (in which quadrant) the
competence is positioned, different types of competences can be identified.
balanced competences (these are positioned along a diagonal axis, where the degree of mastery equals the relevance of the competence)
overrated competences (where the degree of mastery is much higher than the relevance)
critical competences (where the degree of mastery is not as high as the relevance)
basic competences (where the degree of mastery and the relevance or both very high)
5
18
114
17
43
6
21212
25152810
26
2224
13
19
87
2016
11
23 9
27
degree of masteryvery low low high very high
co
mp
ete
tiv
ere
lev
an
ce
very
low
low
high
very
high
critical competences
balanced competences
Over valued competences
basis-competences
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Project funded by the European Community under the ‘Competitive and Sustainable Growth’ Programme (1998-2002)
Core competence analysis8. Strategic forecasting
need for strategic core competences derives from the comparison of current competences with future requirements
Early recognition in strategic management as systematic process for getting and processing information
used for early data collection of environmental changes, which threat or support current and future potentials
aims at the guarantee of sufficient reaction time for developing or implementing adapted strategies
Method: Find Filter Format Focus (FiFiFoFo) analysis
9. Definition of core competency development strategy Depending on the position in the evaluation graph, different actions
should be taken for different outcomes competences are ideally positioned in the diagonal sector of the
balanced competences → may be very important to increase the level of mastery for critical competences, while for overrated competences no efforts should be taken and investments should be cut
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Focus on the indicators of active trends
• Computer based network analysis
• Set up of matrix• if needed: Further
investigation
Indicator-Workshop Presentation
• Analysis of elements behind the active trends
• Building a Mind maps• Discussion, moderation
• Search for leading indicators for the observation of the active trends
• Definition of appropriate measurement units
• Development of a indicator report system or integration in BSC
• Presentation of the defined indicators
• Definition of the research sources
• Definition of responsibilities
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Strength and weakness definition
Module 2Results of enterprise internal, resource based analyses
Results of enterprise external, market based analyses (Module 3)
Strategies to improve current situation
TOWS-Analysis
WeaknessesWeaknesses
ThreatsThreats
StrengthsStrengths
OpportunitiesOpportunities
Minimise or avoid threats
Reduce weaknessesor change into strengths
Use
of
chan
ces
by
stre
ngth
s
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Agenda: Training on Methodology Module 2
Step 1: Introduction– Purpose and objectives, structure, positioning– Practical application environment
Step 2: Methodological approach
Step 3: Tool-kit support
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Project funded by the European Community under the ‘Competitive and Sustainable Growth’ Programme (1998-2002)
OrganisationAnalyser General Features Data acquisition and analysis software for inquires
Web-based for decentralize, time independent processing Online (Internet and Intranet) and offline (local) applicable Project oriented user management Inquiry management
numeral inquire methods Free configurable inquire possibilities Free scaling (number of users and inquires) Analysis- and documentation function
e-volution Features Analysis instrument for specific EE levels
Strategic level (goal system) Socio-informal level (competencies and skills) Information level (competencies and IT-infrastructure)
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Example: e-business ability analysis in the OrganisationAnalyserObjective Partner spanning analysis of the value chain from the
IT-resource point of view Organization Human Information technique
Evaluation of the current situation and projection on the reference side
Results Mapping of EE-partner abilities and Gap-Analysis Identification of interfaces Strengths- and Weakness Analysis Goal and provision formulation
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Project funded by the European Community under the ‘Competitive and Sustainable Growth’ Programme (1998-2002)
Agenda: Training on Methodology Module 3
Step 1: Introduction– Purpose and objectives, structure, positioning– Practical application environment
Step 2: Methodological approach
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Module 3 purpose and objectives
Module purpose • Identification of customer requirements regarding products and services that could have an impact on the e-business strategy
• General product, market, customer and competitor analysis as basis for realisation of competitive business model and realisation of results benefits from the EE by use of collaborative e-business model
• e-business related opportunity and threat analysis on enterprise and EE level by comparison with competitors as basis for e-business strategy development
• enabling a collaborative philosophy (if EE partners withhold critical market data those farther away from the end user customer cannot make intelligent decisions)
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Project funded by the European Community under the ‘Competitive and Sustainable Growth’ Programme (1998-2002)
Module 3 purpose and objectives
Field of application • Market and product assessment• Market attractiveness• Product attractiveness
• Consumer analysis• Competitor analysis• Target market search• Opportunity and Threat analysis
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Module 3 structure
Market analysis
Definition of businessobjective system
Organisation analysis
e-business strategy androadmap formulation
e-business operation
e-business requirementanalysis
e-business implementation
OUT OF PROJECT SCOPEROADMAP IMPLEMENTATION DECISIONPROJECT SCOPE
METHODOLOGY
SUPPORT
Methodology + Tool Training
TOOl SUPPORTTOOL SUPPORT
e-business design
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Project funded by the European Community under the ‘Competitive and Sustainable Growth’ Programme (1998-2002)
Relationships to other methodology modules
Market analysis
Definition of businessobjective system
Organisation analysis
e-business strategy androadmap formulation
e-business operation
analysise-business implementation
OUT OF PROJECT SCOPEROADMAP IMPLEMENTATION DECISIONPROJECT SCOPE
METHODOLOGY
SUPPORT
Methodology + Tool Training
TOOl SUPPORTTOOL SUPPORT
e-business design
Module 4: e-business strategy formulation
• The market analysis is the basis for the SWOT/TOWS analysis
Module 2: Organizational analysis
• As the counterpart to the market analysis here the internal environment is reviewed
Module 1: Business Objectives Analysis
• Create common understanding of enterprise and its objectives
• Basis for organizational analysis
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Project funded by the European Community under the ‘Competitive and Sustainable Growth’ Programme (1998-2002)
Agenda: Training on Methodology Module 3
Step 1: Introduction– Purpose and objectives, structure, positioning– Practical application environment
Step 2: Methodological approach
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Project funded by the European Community under the ‘Competitive and Sustainable Growth’ Programme (1998-2002)
Module 3 practical application environment
Organisation • Intra- or inter-enterprise workshops or online session
• Definition of key personnel participants (max. 10 participants) from sales and marketing departments
• No need for different EE-partners at one point of time
Demands on participants • Knowledge about enterprise, certain departments, financial situation, strategic background and purpose, e-business situation for the whole company and future goals, as well as about enterprise markets
Time need • Central workshop approach
• Followed by decentralised web-based online sessions: predefined period of time
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Project funded by the European Community under the ‘Competitive and Sustainable Growth’ Programme (1998-2002)
Module 3 practical application environment
Web-based online sessions• Platform configuration and preparation• In-advance information (purpose, objectives, benefits, participants,
organisation)• In-advance need for information collection from the participants
side – scripts handed over at workshop• Invitation (access information, time schedule)• Reporting
Preparation of coordinator/moderator
Workshop• In-advance information and invitation of participants• Presentation material to prepare online session • Moderation methods and instruments (e.g. Flipchart, Overhead,
Beamer, Meta-Plan)• Documentation and minutes
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Agenda: Training on Methodology Module 3
Step 1: Introduction– Purpose and objectives, structure, positioning– Practical application environment
Step 2: Methodological approach
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Module 3 structure
Market analysis
Definition of businessobjective system
Organisation analysis
e-business strategy androadmap formulation
e-business operation
e-business requirementanalysis
e-business implementation
OUT OF PROJECT SCOPEROADMAP IMPLEMENTATION DECISIONPROJECT SCOPE
METHODOLOGY
SUPPORT
Methodology + Tool Training
TOOl SUPPORTTOOL SUPPORT
e-business design
Roadmap for e-business implementation in Extended Enterprises
Page 87
Project funded by the European Community under the ‘Competitive and Sustainable Growth’ Programme (1998-2002)
Market segmentation
Objectives detailed specification and verification of the existing market
segment definitions realisation of a common working basis for the application of
the e-volution concept inside a company or EE
Results Definition of:
product/market combinations customer groups and / or product groups
The market segments are the basis for market segment assessment
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1. Customer description
2. Identification and definition of homogeneity criteria
3. Development of homogeneous customer groups and grouping of similar homogeneity
profiles
4. Combination of similar groups into economic market segment
Market segmentation approach
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Project funded by the European Community under the ‘Competitive and Sustainable Growth’ Programme (1998-2002)
Leading questions concerning market segmentation1. Initial situation: What is the initial situation?
• Customer groups, product groups, distribution channels, • distribution regions worksheet: initial situation
2. Product/client criteria: What is the difference concerning the customer groups?
• Customer groups criteria, product groups criteria, characteristics
• worksheets: Customer groups criteria, product groups criteria, characteristics
3. Segmentation: Which homogenous customer groups does the company have?
• Testing of product and customer group combination by criteria and determination of homogenous combinations
4. Segmentation: Is it possible to process product-market combinations economically?
• Testing and delimitation of product and group combinations to turn over power and strategic importance.
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Detailed description of components
Description of initial situation • main products / product groups and customer groups and their importance/priority for turnover are defined
• Afterwards sales channels are distinguished between direct and indirect sales (resellers, sales partners) and the relevant sales markets/regions are identified
• Then, the connections between products / product groups and the market are defined
• products / product groups are ranked and prioritised by its turnover importance (e.g. A, B and C)
Differentiation of customer groups and identification of homogeneous customer groups
• Several criteria are used to differentiate customers and therefore identify groups of customers with the same characteristics
• E.g. Purchased volume and trends, sales channel, e-solution description
• By using such criteria, customers with similar characteristics are identified and therefore merged to form homogeneous customer groups
• Assignment to product/ market groups
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Project funded by the European Community under the ‘Competitive and Sustainable Growth’ Programme (1998-2002)
Market segmentation1. Customer description - description of initial situation
Sequence1. Products2. Customers3. Trade channel4. Geographic regions
Products
Criteria
Kühlwächter
Druckschreiber
Hackenzähleinrichtung
BdAT
...
Küh
lage
r
Pfla
nzen
prod
uktio
n
Hei
zung
/San
itär
Roh
rleitu
ngsb
au
Bau
gew
erbe
Anl
agen
über
wac
hung
,
-ste
ueru
ng
Was
ser-
, Bod
en
verb
ände
...
x xx
x x
x x
xx
Hän
dler
Ing.
-Bür
os
Dire
kt
Koo
pera
tione
n
Sys
tem
inte
grat
ion
Nor
ddeu
tsch
land
Deu
tsch
land
ges
amt
EU
x
x
x
x
x
x
x
x
x x x
x x x
x x x
x
Tur
nove
r pr
iorit
yA
B
C
A
x
Customers Trade channel Region
Roadmap for e-business implementation in Extended Enterprises
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Project funded by the European Community under the ‘Competitive and Sustainable Growth’ Programme (1998-2002)
Market segmentation 2. Identification of homogeneity criteria
Distinctive features of the customer groups
Turnover relevance
Strategic relevance
Image
Decision maker
Consulting needs
After Sales Service
Customer specifics
Quality needs (TQM)
Ordering
Delivery time / Flexibility
Logistic features
Key question:Different customer demands on marketing and sales activities regarding …
Region
Ecologic issues
Demographic characteristics
cultural characteristics
advertisement
Competition
Costs
Faith
Acquisition
…
...
Product performance
Product use
Innovation
Design
Costs
...
...?
Key question:Different customer demands on products regarding ...
xx
x
x
Criteria selection, resp. completion
x
x
x
Relevant criteria and its characteristics for classification of customers into homogeneous customer groups
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Market segmentation 2. Identification of homogeneity criteria
Criteria Characteristics
Product performance
Decision maker
After Sales Service
Ordering
Customer specifics
Acquisition
Competition
+ high o medium - low
+ Technician o Buyer - Buying Centre
+ yes - no
+ long-time o medium-time - short-time
+ high o medium - low
+ low o medium - high
Criteria description and characteristics
+ periodically o irregular - one time
Criteria selection according to its relevance according to segmentation objectives:
- Market development (advertisement, distribution, costs, products)
- Enterprise strategy (development of enterprise functions)
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Market segmentation 3. Development of homogeneous customer groups and grouping of similar homogeneity profiles - Differentiation by customer groups
Homogeneous customer groups
Küh
lage
r
Med
izin
. Ein
richt
.
Küh
llogi
stik
Pfla
nzen
prod
uktio
n
Hei
zung
/San
itär
Roh
rleitu
ngsb
au
Bau
gew
erbe
Anl
agen
über
wac
hung
,
-ste
ueru
ng
Was
ser-
, Bod
en
verb
ände
...
-
+
-
-
- +
o + o - + +--
+-
- o
o- -
+ + + + - -
o o o o - -
-
- - - -
- - -
Reason for divisionReason for combination
+ +
+ +
Product performance
Decision maker
Ordering
Customer specifics
Acquisition
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Guidelines for segment definition
Definition of market segments
• Check-up and validation of identified product/market combinations is done with reference to the criteria adopted and the requirements of the market segments:
• identification and analysis of strategic issues for product-market-combinations
• check-up if product/market combinations are homogeneous internally and among each other
• analysis of timely stability of market segments
• analysis of turnover potentials of product/market combinations for economic market development
• If these criteria are not fulfilled, customer groups with similar or only slightly different characteristics of segmentation criteria are integrated into the market segments until check-up criteria are fulfilled
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Market segmentation4. Combination of similar groups into economic market segments
Analysis of strategic business units (SBU) in case of need for more in depth information for product-market combinations
Products
Criteria
Kühlwächter I
Kühlwächter II
Kühlwächter III
Druckschreiber
Hackenzähleinrichtung
BdAT
...
Med
izin
Küh
lage
r
Küh
llogi
stik
Pfla
nzen
prod
uktio
n
Hei
zung
/San
itär
Roh
rleitu
ngsb
au
Bau
gew
erbe
Anl
agen
über
wac
hung
,
-ste
ueru
ng
Was
ser-
, Bod
en
verb
ände
...
x x x x
x x
x
x x
x x x
xx
Hän
dler
Ing.
-Bür
os
Dire
kt
Koo
pera
tione
n
Sys
tem
inte
grat
ion
Nor
ddeu
tsch
land
Deu
tsch
land
ges
amt
EU
x
x
x
x
x
x
x
x
x
x
x
x
x
x x x
x x x
x x x
x x x
x x x
x
Tur
nove
r pr
iorit
y
A
B
C
A
A
A
Market segments with different background colours.
Definition of homogeneous customer groups in respect to marketing and enterprise specifics.
Definition of single markets for transparent performance and activity monitoring and controlling.
Customers Trade channel Region
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Are there any questions concerning the identified customer groups?
Are the customer groups homogenous themselves and inhomogeneous to each other?
Are the differences time-stable? Are the sales potentials into the customer groups sufficient
for an economical market processing?
Testing identified customer groups concerning market segments demands
If need be unit customer groups with similar or insignificant different characteristics in the homogeneity criteria to market segments, which fulfil the test criteria.
Market segmentation4. Check
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Project funded by the European Community under the ‘Competitive and Sustainable Growth’ Programme (1998-2002)
Customer purchase criteria analysis
Objectives A consumer's purchasing criteria are the criteria
(conscious or unconscious) on which the consumer bases his decision to purchase a product or service and supplier:
Satisfying the consumer's purchasing criteria are therefore crucial to the company's/EE’s revenues.
Understand how the EE and its competitors satisfy the consumers' purchasing criteria
Results The most important purchase criteria of the EE’s
customers The features of purchase criteria
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Project funded by the European Community under the ‘Competitive and Sustainable Growth’ Programme (1998-2002)
Customer purchase criteria analysis
Gather information about customers' purchasing criteria, and about why the company/EE satisfies these
purchasing criteria
Document the results from the research
Assess how the three main competitors satisfy customers purchasing criteria
Assess the company's/EE’s opportunities and threats according to the investigation of
consumers' purchasing criteria
Roadmap for e-business implementation in Extended Enterprises
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Project funded by the European Community under the ‘Competitive and Sustainable Growth’ Programme (1998-2002)
Competitor analysis
Objectives describe the most important competitors and gain an
understanding of their strengths and weaknesses, compared to your company (Often, this can be realised by using information that already exists in the company/EE)
Supplement is obtained by gathering information externally e.g. by using the Internet, networks etc.
gain a good understanding of the aspects of the competitors that constitute an opportunity or a threat for the company/EE (both in relation to "e" and relating to the business in general)
Results Description of most important competitors Information for OT-analysis
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Project funded by the European Community under the ‘Competitive and Sustainable Growth’ Programme (1998-2002)
Competitor analysis
Description and assessment of the most important competitors
Conclusion drawing based on the description and the assessment of the
competitors - opportunities and threats
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Competitor analysis
Competitor's position in the market and competitive advantages
Assessment of competitor's value creating activities – S.W.
–P/M areas served by the competitor – Competitor's market position and market share
Description of competitors’ current e-solution
Intermediate OT Analysis
– Information (one way) – Communication (two way)– Trade/e-Commerce– Business Integration
– Based on the description and the assessment of main competitors – describe intermediate OT elements
Procurement ProductionMarketing/ sales
DistributionService and support
+ + 0 +
Excellent at branding
None in particular
Are known as quick and friendly
Uncertain
The production is somewhat unstable.
Some distributors say
that the salesmen are to
pushing. None in particular
Assessment of cost efficiency
Strengths
Weaknesses
Effective on purchase, large quantities and hence low prices.
Very new the equipment
used.
Primary activities
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Competitor analysis
Description of competitors’ current e-solution for each value creating activities
Procurement ProductionMarketing/ sales
DistributionService and support
Information (one way)
Present the products on the Web site
Communication(two ways)
Distributors can order the products through the internet.
Trade/eCommerceBusiness integration
Types o
f eB
usin
ess
-Inte
rnet-
solu
tions
Primary activities
The value-creating activities
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Market attractiveness assessmentObjectives definition of both the competitive position and attractiveness
of each of the company’s or EE’s product/market combinations for identification of strategic options for actions as well as opportunities and threats of market segments
Results visualisation of the previous, on basis of which a list of
priorities for development activities can be created, and which can be also used as a tool for disseminating common understanding of the qualities of different product/market combinations within the company or EE
A by-product is the identification of information gaps about single market segments
starting point for market research activities
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1. Specify drivers of each dimension/ Identify the critical internal and external drivers
2. Weight drivers (assign relative importance weights to drivers)
3. Score SBU‘s each driver
4. Position SBU in Attractiveness-Strength Matrix and interpretation
5. Specify opportunities and threats, strengths and weaknesses (SWOT-analysis)
Market attractiveness assessment
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Step 1a: Specify drivers of each dimension/ Identify the critical internal and external drivers
Market size and growth, e.g.:
• market volume, consumer concentration, number of (potential) customers, structure of (potential) customers
• Purchasing patterns, investment rate
Market quality, e.g.:
• Industry sector factors (efficiency of branch, profit margin, price level, clearance for price politic, investment intensity, requirement for service and distribution, position in the market life-cycle, threat of substitutes,customer behaviour)
• Economic factors (economies of scale, capital demand, high investments, currency costs and risks, starting loss, long-term capital commitment, brand loyalty, quality of existing channels, access to existing channels, environmental impact, promotion alternative, transport, dependence on the public attitude, infrastructure market entry barriers, communication network, power supply, existence of alternative resources, interference in the supply of power and resources)
Market attractiveness
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Step 1a: Specify drivers of each dimension/ Identify the critical internal and external drivers
Market quality, e.g.:
• Technological factors (technological level and innovation potential, possibility to protect knowledge, differences in fabric size, differences in performances, different ports, difference in standard, special needed know-how, know-how competitive edge of the benchmark, general technological standard, production technology)
• Political factors (political and legal market entry barriers, political instability, legal system, legal security, labour law, dependence of legislation, dependence of the public meaning, risk of state intervention, tax-, trade- and competitor legal systems, particular environmental determinations, import quota, import taxes and custom duty)
• Sociological factors (religious special features, language, cultural characteristics, social organizations)
• Competition factors (competitor structure, competitor intensity)
Market attractiveness
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Step 1b: Specify drivers of each dimension/ Identify the critical internal and external drivers
Relative market position, e.g.:
• Marketing potential (price advantage, quality advantage, service, delivery time, technique, range of products, functionality, reliability, design, customer service, environmental compatibility)
• Financial output (company growth, revenue, turnover development, profit margin, operating margin, capital turnover)
• Position of the company (financial risk ,USP, cost-performance ratio, customer loyalty, degree of establishment of the company, size of financial power of the company, image advantage/ disadvantage, innovation standard, customer relationship)
• Market share and market share development (market share, market share growth)
Competitive strength
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Step 1b: Specify drivers of each dimension/ Identify the critical internal and external drivers
Relative enterprise potentials, e.g.:
• Marketing potential (distribution network, customer information, customer loyalty, consultant know-how, distribution efficiency)
• R&D potential ( innovation potential, fundamental research, innovation continuity, technical know-how, R&D capacities, patents)
• Production ( action flexibility of machinery, production conditions, productivity, level of automation, capacities)
• Information (Controlling, reporting, customer data base)
• Logistics & Organisation (cost advantages, terms of a license, supplier relations, customer service, advantage of location)
• Employee skills (professionalism, power of judgement, cadre, quality of the management system, know-how, personal capacities, motivation, culture)
• Finance (financial capacities, participations, investments, return on investment, own capital, cash flow, savings)
Competitive strength
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Step 2 and 3: weight and score drivers by means of value-benefit analysis (option)
INDICATORS OF MARKET ATTRACTIVENESS
EVALUATION OF MARKET ATTRACTIVENESS(B)
Low Middle High
WEIGHT (G)
B*G
0 1 2 3 4 5 6 7 8 9 10 SBU1 SBU2 SBU3
Market size 30% (0,30) (1,30) (2,75)
- ... # ? Δ 5% 0,15 0,20 0,45
- ... # ? Δ 15% 0,15 0,60 1,50
- ... # ? Δ 10% 0,00 0,50 0,80
Market growth 50% (1,10) (3,10) (3,60)
- ... # ? Δ 10% 0,10 0,60 0,80
- ... # Δ ? 20% 0,40 1,40 1,20
- ... # Δ ? 5% 0,15 0,35 0,30
- ... # ? Δ 5% 0,15 0,25 0,40
- ... # ? Δ 10% 0,30 0,50 0,90
Market quality 20% (0,30) (0,90) (1,95)
- ... # ? Δ 2% 0,04 0,10 0,20
- ... # ? Δ 5% 0,10 0,25 0,45
- ... # ? Δ 10% 0,10 0,40 1,00
- ... # ? Δ 3% 0,00 0,15 0,30
Total 100% 1,70 5,30 8,30
# - SBU 1 ? – SBU 2 Δ – SBU 3
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Step 2 and 3: weight and score drivers by means of value-benefit analysis (option) EVALUATION OF
COMPETITIVE STRENGTH ?
RELATIVE COMPETITION POSITION
Weak middle powerful Weak Middle Powerful
RELATIVE COMPETITIVE STRENGTH
COMPETITION FACTOR (SBU 1)
0 1 2 3 4 5 -5 -4 -3 -2 -1 0 1 2 3 4 5
WEIGTH (G)
Marketing potential Δ О • 5% -0,15
R&D potential Δ О • 5% -0.10
Production Δ О • 10% -0.20
Information Δ О • 5% -0,05
Logistics and organization О Δ • 10% 0,10
Employee skills О Δ • 10% 0,30
Finance О Δ • 20% 0,40
Market share О Δ • 25% 1,00
Position of company О Δ • 10% 0,30
Total 100% 1,50
О – best competitor Δ – SBU 1
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Step 4: Position Strategic Business Units (SBU) in Attractiveness-Strength matrix Option A
Threat
Threat
Ideal
Unattractive
Neutral
Unattractive
Ideal
Neutral
Relative SBU potential
Market quality
Market size and growth
Relative market position
SBU1
SBU2
SB
U3
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Step 4: Guidelines for Strategic Business Units (SBU) in Attractiveness-Strength matrixOption A SBU Market Call for action/ Option
Threat Threat Control if development of SBU potentials are justifiable through market attractiveness.
Unattractive Further actions in this segment are not profitable.
Neutral Verifying of SBU potentials. Operating expenses checking. Detail analysis.
Ideal Develop the SBU potentials. Checking of operating expense. Prioritisation.
Unalluring Threat Prepare for strategic decisions. (Analysis, costs – earnings, opportunities and threats)
Unattractive Further actions in this segment are not profitable.
Neutral Analysis of further development of market – Opportunity or flop.
Ideal Take actions for potential build-up and market penetration.
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Step 4: Guidelines for Strategic Business Units (SBU) in Attractiveness-Strength matrixOption A SBU Market Call for action/ Option
Develop Threat Analysis of market development. Evaluation of cost and earnings of market attractiveness.
Unattractive Analysis of market development (prognosis). If market development is constant than pull-out.
Neutral Analysis. Verification of cost/ earnings to market penetration.
Ideal Take action for market penetration and market development.
Ideal Threat Take action to secure the market position.
Unattractive No further investments. Pull-out.
Neutral Take action for sales increase.
Ideal No call for action.
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Step 4: Position Strategic Business Units (SBU) in Attractiveness-Strength matrix Option B
Investment- and growth strategy
Selective strategy
Absorption- orDivestment strategy
Relative competition strengths
Zone oftying resources
Zone ofresource disposal
low middle high
low
middle
high
Mark
et
att
racti
ven
ess
Creation of value
Consumption of resources
Method: McKinsey Portfolio Analysis
Market size is represented by the size of the circle. Market share is shown by using the circle as a pie chart.
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Step 5: Specify opportunities and threats, strengths and weaknesses (SWOT-analysis)
Threat
Threat
Ideal
Unattractive
Neutral
Unattractive
Ideal
Neutral
Relative SBU potential
Market size and growth
Relative market position
Relative competition strengths
Zone oftying resources
Zone ofresource disposal
low middle high
low
middle
high
Mark
et
att
racti
ven
ess
Creation of value
Consumption of resources
Method: McKinsey Portfolio Analysis
StrengthsStrengths
List of strengths(1 .. n)
List of strengths(1 .. n)
WeaknessesWeaknesses
List of weaknesses(1 .. n)
List of weaknesses(1 .. n)
OpportunitiesOpportunities
List of opportunities(1 .. n)
List of opportunities(1 .. n)
ThreatsThreats
List of threats(1 .. n)
List of threats(1 .. n)
S/O strategiesS/O strategies
Consolidation of strengths to realise
opportunities
Consolidation of strengths to realise
opportunities
W/O strategiesW/O strategies
Overcoming of weaknesses by
realisation of opportunities
Overcoming of weaknesses by
realisation of opportunities
S/T strategiesS/T strategies
Consolidation of strengths to avoid
threats
Consolidation of strengths to avoid
threats
W/T strategiesW/T strategies
Overcoming of weaknesses and
avoidance of threats
Overcoming of weaknesses and
avoidance of threats
Harvesting•Absolute weakness •Get ride of it
Selective growth • Potential for market leadership • identify weaknesses• Build up strengths
Selective growth• high investments• strengths
Selective Procedure•Specialization•selective investments
Investment and growth• Absolute strength• Aim for market leadership • invest
Selective Procedure•Search for niche •Specialization• more of a weakness
Selective Procedure•Keep it the way it is
Harvesting•Search for niche •Specialisation• more of a weakness
Harvesting•Minimize investments• weakness
low middle high
low
mid
dle
hig
h
Mark
et
att
ract
iveness
of
SB
U
relative competition strength of SBU
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Target market search Identification and evaluation of new products and services for the
single organisation or EE Identification of additional demands of present customers for
enlargement of product program Identification of new market opportunities by new products Evaluation of product ideas by means of market and company
relevant criteria Selection of promising product/market combinations for a
detailed analysis as preparatory work for new product developments.
Objectives
Results Definition of promising product/market combinations, customer groups and / or product groups for which a more detailed market analysis can be realised under the following questions:
Get objective statements concerning market chances and risks Determine detailed customer requirements and preferences Determine detailed product requirements
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Benefits of target market search- Zielmarktsuche
• Take over the roll of an “innovator" or of the “early follower" within a branch.
• Expansion in new markets with new or modified products.
• Improvement of the utilisation of the existing production capacities through new products.
• Rejuvenation of the product range by settlement of many products in the last phases (saturation and regeneration) des product life cycle.
• Search for market niches to avoid direct confrontation with important competitors on existing markets.
• Systematic and traceable development of product ideas.
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Organisation of target market search
Organisation form • Enterprise intern workshops • max. 10 participants• Sales management, sales staff (intern + extern,
application engineering, R&D, production
Time demand*(benchmark)
* For the workshop (without preparation time)
• Idea generation: 1 day• Idea assessment filter 1: 0,5 days (in addition maybe
research) • Idea assessment filter 2: 0,5 days
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Organisation of target market search
Requirement for participants
The participants must have knowledge about the following:
• Information about product and customer groups of the enterprise
• Knowledge about the buying behaviour of the purchaser(buying decision criteria, decision maker,...)
• Revenue distribution of the product and customer groups(rough calculation)
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Target market search
Generation of ideas
Identification of core competencies
Evaluation of ideas
Evaluation of ideas regarding market place opportunities and risks
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Ideenspeicher(Ideenbeschreibung)
Idea data source(Idea description)
Product ideas Product ideas
2nd pass 3rd pass or
Starting point
1
2
3
1st pass
Products and services
Customer groups
Core competences
Trends in industrial
sector
Identification of search
fields
Idea generation
Search field specification
(characte-ristics)
Products and services of the enterprise
Benefits, effects and functions of products and services for the
enterprise
Identification of potential target groups, expected benefits and
application fields
Customer groups of the enterprise
Successful products and services
Problems in the product environment
Product environment at the customer
Possible customer solution based on
products and services
Customer needs
Core competences of the enterprise
Strengths of the enterprise
Special abilities and competences of the
enterprise
Competences needed in the future
Definition of possible service offers,
application fields, and user benefits
Definition of enterprise strengths
Identification of global and branch trends in
general
Identification of relevant trends for the
enterprise
Definition of product and service strategies
based on trends
Identification of needs for additional competences
Generation of ideas
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Modified products for new customers
Fix searching fields- starting point -
Explain searching fields
Generate ideas
Memory ideas(description)
Who requires which benefits combination? Where could you use them?
Which products and services offers the enterprise?
Which benefits, effects and functions offer the products and services of the enterprise?Which characteristics has the benefit?
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Starting point /fix searching
fields
explain searching fields
Generate ideas
Memory ideas(description)
New products for existing customers
Which problems result form the associated product field? Which near system field surrounds the product at the customer?
Which solutions can you efficiently combine in connection with the product? Which product demands of the customer are also possible in this connection?
Which customer groups does the enterprise have? Which products where successful?
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Starting point /fix searching
fields
explain searching fields
Generate ideas
Memory ideas(description)
Which key abilities does the enterprise have? Which enterprise powers can you realize? With what was the enterprise successful in the past?
Which specific abilities does the enterprise master? Which further abilities seam to be interesting for the future?
Which product and enterprise efforts can you generate out of this? In which usage fields are advantages (with this abilities) for the customers possible?
New products for new customers - enterprise abilities
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New products for new customers - trends
Which products could be successful because of the trends and could be produced by the enterprise?Which abilities do you need in addition?
fixsearching fields - starting point -
Explainsearching fields
Generate ideas
Memory ideas(description)
Which key abilities does the enterprise have? Which enterprise powers can you realize?Which global and branch near trends are there?
Which trends are relevant for the enterprise?
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Leading questions:
features
requirements
demands
abilities
New customer/new products
X
X
X
X
X
X
X
X
Who could require this combination? Where are they used?Which characteristics can be combine efficiently?
Synergies between criteriacharacteristics prove newproducts and/or new customers
Synergies between criteriacharacteristics prove newproducts and/or new customers
Idea summary
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Approach of Idea assessment and selection
Pre filter
Filter level 1
Filter level 2
Audit of ideas:• Reality closeness• manifestness• Goal conformity
Assessment of the enterprise
potentials
Assessment of Market potential
Qualitative assessment of abilities and input for the
realisation of the product ideas in major departments of
the enterprise.
Qualitative assessment of opportunities and risks
of the goal market
Positive assessment of ideasis precondition for
a success promising product (K.O. - criteria)
Weighted criteria to makea differentiated assessment
of the enterprise Potentials possible
( utility value analyse)
Positioning of correlating Ideas as selection
support
max. 2-3
about 7-10
> 20
After assessment remaining ideasAssessment content Assessment technique
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enterprise abilitiesmanufacturing-Know-howmanufacturing effortsdevelopment-Know-howdevelopment effortsResources (staff, finances)
Market situationsales potentialcompetition situation
F I L T E R 1
F I L T E R 2
Detail analyse
Workshop 2: evaluation of ideas (enterprise abilities)
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Example: filter level 1
Product idea jProduct
developmentManufacturing Effi-
ciency
Ability Input Ability InputW1;j=5 W2;j= 3 W3;j= 5 W4;j= 1 W5;j= 7
Product 3 3 3 1 1 47x
P1 3 3 3 3 1 49 x
P2 1 1 3 1 1 31 x
P3 3 1 3 1 3 55 x
P4 0 0 3 0 1 22
Assessment of enterprise potentials
utilityvalue Nj
Goal: Ordering ofproduct ideas considering the utility value
Weight Wi;j
Assessment B1;j,3;j
Nj = (Bi;j x Wi;j)
0... Not existing 1... Partly existing / upgradeable3... existing
Assessment B2;j,4;j
0... high 1... justifiable3... low
Assessment B5;j
0... low1... middle3... high
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enterprise abilitiesmanufacturing-Know-howmanufacturing effortsdevelopment-Know-howdevelopment effortsResources (staff, finances)
Market situationsales potentialcompetition situation
F I L T E R 1
F I L T E R 2
Detail analyse
Workshop 2: evaluation of ideas (market chances)
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Estimation of success probability of product ideas
Demand of the market
x
x
low high
Legend:Success probability
Co
mp
etit
or
inte
nsi
ty
low high
hig
hlo
w
A) Positioning of product ideas in the strength diagram
A) Positioning of product ideas in the strength diagram
B) Translation of the positionof the product idea in the strengthdiagram in success probabilitiesfor the product ideas
B) Translation of the positionof the product idea in the strengthdiagram in success probabilitiesfor the product ideas
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Tu
rno
ver
cate
go
ry
A
B
C
D
E
Previously listed products Turnovercategory
Realizing time frameShort description of idea
A) Which idea is regarding the possible turnover comparable with the existingproduct?Or: Relative assessment of ideas among themselves.
A) Which idea is regarding the possible turnover comparable with the existingproduct?Or: Relative assessment of ideas among themselves.
B) How long will it take under positive circumstances until the the product is salable?
B) How long will it take under positive circumstances until the the product is salable?
Turnover und realizing time
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Result presentation – discussion and assortment basis
Realization time
Tu
rno
ver
exp
ecta
tio
ns
AB
CD
E
3
2
5
1
4
Idea filtering through consideration of
- Realisation time [e.g. year quarter]
- Turnover expectation [category A, B, C, D,
E]
- Success probability (competition situation, demand)
Legend:
1...x – Product idea
Success probability
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Sensitivity Analysis
Objectives provide information about alternative scenarios
related to different values of the input variables when there is a non negligible level of uncertainty in the assessment of the needed input market data
See variation in the output scenario
Results Weights Assessed strategies or options
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Sensitivity Analysis
Choose field of assessment
Choose question for assessment
Assign a weight
Measure score / Evaluate overall score
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Opportunity-Threat analysis
Objectives Opportunities and threats describe relevant external
factors, the environment, of an organisation SWOT analysis provides information that are helpful in
matching the organisation's resources and capabilities to the competitive environment in which it operates
instrument in strategy formulation and selection. SWOT analysis can be used in conjunction with other tools
for audit and analysis, such as PEST analysis and Porter's Five-Forces analysis
Results definition of organisation’s opportunities and threats as an
important part of the strategic e-business planning process Input data for SWOT analysis
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Agenda: Training on Methodology Module 4
Step 1: Introduction– Purpose and objectives, structure, positioning– Practical application environment
Step 2: Methodological approach
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Module 4 purpose and objectives
Module purpose • Synthesising of results from market and resource based strategic business analysis into e-business strategy and roadmap for the Extended Enterprise
• Output is an e-business roadmap for EE which is based on an e-business strategy
• The e-business roadmap
• is a time-based plan that defines what the status of an entity’s e-business is, where it wants to go, and how it can get there
• denotes space structured by development directions, milestones and projects to get from current status to a new one in the future
• are both forecasts of what is possible or likely to happen, as well as plans that articulate a course of anticipatory action
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Module 4 purpose and objectives
Field of application • Extended Enterprise model specification (EE entities, value chain structure, hierarchy of strategic business objectives)
• E-Business strategy definition (goals, targets, measures, resources)
• E-business TOWS Analysis• E-business strategy alternative definition• E-business implementation roadmap definition• E-business roadmap graph• E-business strategy implementation controlling with
Balance Score Card (BSC)
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Market analysis
Definition of businessobjective system
Organisation analysis
e-business strategy androadmap formulation
e-business operation
e-business requirementanalysis
e-business implementation
OUT OF PROJECT SCOPEROADMAP IMPLEMENTATION DECISIONPROJECT SCOPE
METHODOLOGY
SUPPORT
Methodology + Tool Training
TOOl SUPPORTTOOL SUPPORT
e-business design
Module 4 structure
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Relationships to other methodology modules
Market analysis
Definition of businessobjective system
Organisation analysis
e-business strategy androadmap formulation
e-business operation
analysise-business implementation
OUT OF PROJECT SCOPEROADMAP IMPLEMENTATION DECISIONPROJECT SCOPE
METHODOLOGY
SUPPORT
Methodology + Tool Training
TOOl SUPPORTTOOL SUPPORT
e-business design
Module 2: e-business strategyformulation• Basis for identification of
interfaces for the roadmap definition in Module 4
Module 3: Market Analysis• Detailed analysis about markets
segments, position, competitors and customers
Module 1: Business ObjectivesAnalysis• Create common understanding of
EE business objectives• Basis for targeted e-business
strategy formulation
e-business roadmap
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Agenda: Training on Methodology Module 4
Step 1: Introduction– Purpose and objectives, structure, positioning– Practical application environment
Step 2: Methodological approach
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Module 4 practical application environment
Organisation • Intra- or inter-enterprise workshops or tool-based online session
• Definition of key personnel participants from management and specialised departments
• Need for different EE-partners at one point of time
Demands on participants • Knowledge about enterprise, micro and macro environment, business strategy, e-business situation for the whole enterprise and strategic business objectives, etc.
Time need • Workshop approach: 3-4 workshops
• Online sessions: time to be defined
• Basis through Module 1-3
• Preparation of participants required
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Module 4 practical application environment
Web-based online sessions• Platform configuration and preparation• In-advance information (purpose, objectives, benefits,
participants, organisation)• In-advance need for analysis of data from module 1-3• Invitation (access information, time schedule)• Reporting
Preparation of coordinator/moderator
Workshop• In-advance information and invitation of participants• Moderation methods and instruments (e.g. Flipchart,
Overhead, Beamer, Meta-Plan)• Documentation and minutes
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Agenda: Training on Methodology Module 4
Step 1: Introduction– Purpose and objectives, structure, positioning– Practical application environment
Step 2: Methodological approach
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Market analysis
Definition of businessobjective system
Organisation analysis
e-business strategy androadmap formulation
e-business operation
e-business requirementanalysis
e-business implementation
OUT OF PROJECT SCOPEROADMAP IMPLEMENTATION DECISIONPROJECT SCOPE
METHODOLOGY
SUPPORT
Methodology + Tool Training
TOOl SUPPORTTOOL SUPPORT
e-business design
Module 4 structure
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Input data from Module 1
• Enduring statement that distinguishes the EE enterprise from others
• EE's sense of future direction
EE business visiondefinition
• EE definition in a concise and clear mannerEE business mission definition
• Basis for EE strategy development
• Definition of main business objectives
• Clustering of business objectives
• Priority of business objectives (e.g. with BSC)
EE business objectives definition
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Input data from Module 2
• Overview about existing bought or self-made e-applications, there importance to the enterprise and the importance given to e-applications and e-abilities at all
• assessment average user qualification regarding e-business application type
E-ability analysis
• Overview of core competencies of each EE partner, the trends, the competitive relevance and the degree of mastery
• Evaluation and visualization of companies situation
Core competency analysis
• Overview of benefits for all independent and interdependent enterprises
E-benefit analysis
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Input data from Module 3
• enduring statement that distinguishes one enterprise from other similar enterprises
• enterprise's sense of future direction
Market position analysis
• Enterprise definition in a concise and clear mannerCompetitive Strategy
• Basis for strategy development
• Definition of all objectives
• Clustering of objectives
• Prioritising of goals (e.g. with BSC)
Competitor Analysis
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Module 4: e-business strategy and roadmap formulationPurpose Methodological approach and supporting software tool for synthesis
of results from market and resource based strategic business analyses for EE e-business strategy and roadmap development
Fields of application EE business objective definition EE business model specification (EE entities, value chain structure,
hierarchy of strategic business objectives) e-business TOWS-analyses e-business strategy formulation (goals, targets, measures,
resources) traceable e-business strategy assessment and selection e-business implementation roadmap definition e-business strategy implementation controlling with Balance Score
Card (BSC)
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EE business model specification
Objectives Aggregation of data collected before Define overall EE business objectives Define hierarchy of business objectives Draw special attention to problems and opportunities
Results EE business purpose definition EE idea formulation Draft EE business structure model
EE businessvision
specification
EE businessvision isspecified
EE businessmission
specification
EE businessmission isspecified
EE constellationspecification
EE constellationis specified
Start EE modelformulation
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Hierarchy of business objectives
Hierarchy of objectives defines basis for each entrepreneurial acting
• Higher level objectives
• EE business vision (if any)
• EE business mission (if any, mainly only for horizontal EE)
• Lower level business objectives
• Profit objectives e.g. business unit objectives
• Market objectives e.g. product unit objectives
• Subject objectives e.g. functional objectives
Enterprise mission
Enterprise philosophy
Enterprise corporate identity
Profit goalsBusiness unit objectives
Market objectivesProduct unit objectives
Subject objectivesFunctional objectives
Me
an
s-e
nd
-re
lati
on
s
Det
ail
ing
Higher-level
objectives
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EE business vision/mission definition
Fundamentals • enduring statement that distinguishes one enterprise from other similar enterprises
• important to• insure unanimity of purpose,• arouse positive feelings about the enterprises,• provide direction,• provide a basis for objectives and strategies,• serve as a focal point,• create consensus on specific strategies and
objectives,• resolve divergent views among managers
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EE business vision definition
Writing the business vision for the EE
Visualisation, discussion and assessmentof individual views on common business visions
Decision about vision statement of the EE
Formulation and publication of business vision
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EE business vision definition
Purpose "What does the EE want to become?"• first step in strategic business planning• clear vision provides the foundation for development
of a comprehensive mission statement• direction of all business actions toward this vision
Content • EE’s sense of future direction• dream for an ideal state• concise declaration of the direction that an EE is
planning to take into the future
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EE business vision definition
Design guidelines • short• preferably• meaningful• one sentence• Instigation and inspiration for action and achievement
among employees• Integration of motivation• Integration of changing aspects or motivation
Important for horizontal EE constellations
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EE business mission definition
Writing the business vision for the EE
Visualisation, discussion and assessmentof individual business mission
Decision about mission statement of the EE
Formulation and publication of business mission
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EE business mission definition
Purpose • EE definition in a concise and clear manner• Provision of vivid picture of what is unique about the
EE to the reader• Alignment of every program and activity in the EE to
the mission
Design guidelines • less than 200 words• longer than a phrase or sentence, but not a two page
document• not be too specific (can alienate managers and stifle
creativity)• Inspiring• enduring though not cast in stone
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EE business mission definition
Content • Customers and target markets• Products/Services for customers• Geographic markets• Technology• Concern for Survival/Growth/Profits• Philosophy (values, ethics, beliefs)• Public Image• Employees• Distinctive competence and Unique Selling Position
(USP)
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EE business objective definition (see Module 1)Information of participants
Definition and collection of business problems and objectives by means of creativity methods
Clustering of business objectives
Presentation and completion of clustered business objectives
Systems Thinking of business objectives
Priority definition and presentation of business objectives
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EE constellation specification
• Specification of the organization's value and supply chain, i.e. the Extended Enterprise constellation in case of shared and integrated business process along the value chain
• This specification focuses on three main aspects:
• Business processes
• Value and supply chain partners
• Basic e-business strategies for e-business processes
• EE value chain specification
• organizations that are involved in the inter-enterprise value and supply chain processes
EE businessvision
specification
EE businessvision isspecified
EE businessmission
specification
EE businessmission isspecified
EE constellationspecification
EE constellationis specified
Start EE modelformulation
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EE e-business strategy formulationObjectives Development and decision about the e-
business strategies based on the results of:
Module 2: Organizational analysis (strengths (S) and weaknesses (W))
Module 3: Market analysis (opportunities (O) and Threats (T))Aggregation of data collected before
Results Preference e-business strategy
alternatives
Start e-businessstrategy
formulation
Market analysis
e-businessstrategy
alternativespecification
e-businessstrategy
alternativespecified
TOWS-Analysis
TOWS analysed
basic e-businessstrategydefinition
basic e-businessstrategy defined
Organisationanalysis
Strengths-Weaknesses defined
Opportunity-Threat
defined
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SWOT/TOWS Analysis • Development of SWOT matrix based on results of
• Module 2: strengths (S) and weaknesses (W)
• Module 3: opportunities (O) and Threats (T)
• Combination of S-W-O-T elements: matching the resources and capabilities to the competitive environment
• S/O combination: organisation should strive to maximise its e-business strengths to capitalise on new e-business opportunities
• S/T combination: organisation should strive to use its e-business strengths to parry or minimise threats
• W/O combination: conquer the organisation's e-business weaknesses by making the most out of any new e-business opportunities
• W/T combination: defensive strategy, to minimise an organisation's internal e-business weaknesses and avoid external threats
• Development of basic e-business strategy types and e-business alternatives for further elaboration and assessment
Strengths
List of strengths(1 .. n)
Weaknesses
List of weaknesses(1 .. n)
Opportunities
List of opportunities
(1 .. n)
Threats
List of threats(1 .. n)
SO strategies
SO 1..n:Consolidation of strengths
to realise opportunities
WO strategies
WO 1..n:Overcoming of
weaknesses by realisation of opportunities
ST strategies
ST 1..n:Consolidation of strengths
to avoid threats
WT strategies
WT 1..n: Overcoming of weaknesses and
avoidance of threats
Strengths
List of strengths(1 .. n)
Strengths
List of strengths(1 .. n)
Weaknesses
List of weaknesses(1 .. n)
Weaknesses
List of weaknesses(1 .. n)
Opportunities
List of opportunities
(1 .. n)
Opportunities
List of opportunities
(1 .. n)
Threats
List of threats(1 .. n)
Threats
List of threats(1 .. n)
SO strategies
SO 1..n:Consolidation of strengths
to realise opportunities
WO strategies
WO 1..n:Overcoming of
weaknesses by realisation of opportunities
ST strategies
ST 1..n:Consolidation of strengths
to avoid threats
WT strategies
WT 1..n: Overcoming of weaknesses and
avoidance of threats
WeaknessesWeaknesses
ThreatsThreats
StrengthsStrengths
OpportunitiesOpportunities
Minimise or avoid threats
Reduce weaknessesor change into strengths
Use
of c
hanc
es b
y st
reng
ths
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e-businesse-business
e-business at a glance
Business partners/suppliers Extranet InternetOwn
enterpriseCustomers
e-commercee-procurement
e-organisationbusiness-to-business (b2b) business-to-business (b2b)business-to-consumer (b2c)
Supply Chain Management Customer Relationship Management
internal business
Intranet
e-governmentbusiness-to-administration (b2a)
e-governmentbusiness-to-administration (b2a)
business-to-employee (b2e)
consumer-to-consumer (c2c)
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Some basic e-business strategy types
• Supply Chain Management defines the management of a network of organisations that are involved, through upstream and downstream linkages, in the different processes and activities that produce value in the form of products and services in the hand of the customers
• If these processes are supported by e-business applications, it is called e-SCM
• Commerce are all transactions (sales and purchases) having the objective of supplying commodities (goods and services)
• E-commerce is a synonym for all kinds of business that are established electronically especially over the Internet
• This includes both electronic sale (internet shops) and B2B transactions, i.e. business between two companies
• Procurement contains functionalities to illustrate internal sourcing processes for indirect and increasingly also for direct goods, as well as for integration of cross-plant sourcing and dynamic trade processes, such as auctions or proposals
• If these processes are supported by e-business applications, it is called e-Procurement
What?
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Strategy alternatives to realise basic e-business strategy types
How?
1st level content of e-business strategy detailing:
• Specification of e-business strategy on the ICT application level and justification
• Definition and differentiation between clients, customers, and users
• Definition of milestones (time) related to ICT application implementation
• Description of constraints for e-business strategy alternative implementation
• Description of other relevant facts and assumptions related to the validity of the specific e-business strategy alternative
2nd level content of e-business strategy detailing
• actions
• responsibilities
• resources
• time
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Definition of actions, initiatives and projects and compilation • Compilation of single e-business actions with other e-business
actions already running or planned
• evaluation of these projects and initiatives and determination of the concept to be pursued
• Selection of most feasible and beneficial e-business actions
• a brief brainstorming exercise for each action to provide a starting point for action planning.
• Main subjects to specify:
• Priorities
• implementation chances, risks and corrective measures
• resource specification: financial, technology, material and human
• responsibility definition
• investment planning
• mid till long-term implementation plan and timeline specification
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E-business strategy assessment and selection
• Strategic choice is the decision to select from alternatives the strategy which will meet best the enterprise objectives
• The decision involves focussing on a few alternatives, considering the selected factors, evaluating the alternatives against these criteria, and making the actual choice
• Central to the e-business strategy assessment is the evaluation against three major types of assessment criteria:
• real business issues
• Intangibles strategy assessment criteria
• generic strategy assessment criteria
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Examples for business related strategy assessment criteriaCriteria Factors
Corporate businessstrategy
– Coherence with high level objective orientation– Objective fulfilment potential– realisation time
Current and futuremarket
– customer profile and needs– competitors– bargaining power of suppliers– macroeconomic factors
Products and services – quality of products and services– substitute products
People – skills and technology mastery– training possibilities
Innovation and change – Innovation degree (short-, mid-, long-term competitive advantage)– Technology sophistication– Technology mastery
Finance and investment – design costs– implementation costs– operation costs– fixed and variable costs
Risk, reward, uncertainty – Ease of implementation– Chance to fail– Risk averse
Resource view – status assessment: e.g. hardware, soft skills– competences: internal, external– availability: budget, humans
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Examples for intangible strategy assessment criteriaCriteria Factors
Relationships – Scale, scope and liability of distribution network– Bargaining power– Ability to access markets– Ability to work with partners– Excellence in teamwork, networking, and collaboration
Knowledge – knowledge on influencing parameters– R&D ability/ product development and market research– Valuable customer benefits– Management abilities
Cultures and values – Advertisement/ promotion/ PR– Shared aim and purpose– Reward system– Relationship to stakeholders– Lived corporate culture
Reputation and trust
– customer confidence– relationship to suppliers and importance of organization to supplier– delivering on time/ specifications– competitive advantage– customer loyalty– sensitivity in dealing with problems and concerns
Skills and competences
– ability to build and defend niches– training, learning and development opportunities– ability to see problems and opportunities
Processes and systems
– ability to make effective and efficient, and economical use of new design, materials, technologies, and ways of working – continual improvement– fit between production capabilities and market needs– on the job and off the job training– ability to make use of good ideas– control system
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Examples for generic strategy assessment criteria
Criteria Factors
Tangibility – Clearness– Transparency– Coherence– Adequacy
Relevance – Decision support– Orientation– Relevance for different planning processes
Closeness of content
– Flawlessness– Credibility– Completeness– Systematic approach– Development paths (roadmap)– Information contents
Interaction of strategies
– Difference between strategies– Commonality of information, subjects under consideration
Stability – Internal consistency
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Overview of common assessment methods
Focus Methods for documentation and evaluation of success factors
Cost oriented assessment methods
Investment-based assessment methods
Effect and benefit oriented assessment methods
Methods – Checklists– Scoring,
profiling, portfolio models
– Core competence analysis
– Total costs of ownership (TCO)
– Cost-benefit analysis
– Activity based costing (ABC) / Process costs analysis
– Discounted cash flow (DCF)
– Net present value (NPV)
– Return on Invest (ROI)
– Real options pricing model (ROPM)
– Black Scholes Model
– Wibe 21
– Value-benefit analysis
– Balanced scorecard (BSC)
– Scoring, profiling, portfolio models
– Core competence analysis
Value benefit analysis with high practical relevance
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Value benefit analysis method
1. select strategy scenarios to assess
• first of all the strategies must be found and selected following the three major kinds of assessment criteria (see above)
2. define assessment factors
• which criteria are important for the result of the project
• select those (from a given list and self-given)
3. define weight factors
• not all criteria are as important as others are
• so the assessment factors have to be weighted
• best way to do it is by using percentages which add up to 100
4. scoring of e-business strategy scenario
• score each scenario independent from the other
• point score: 10 (best) up to 1 (poor) – points can be given a couple of times
5. calculate ideal value and specific strategy scenario value
• score = weight x criteria evaluation
• addition of scores for each scenario = total value
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Value benefit analysis method6. Define threshold
• Calculate the best possible value
• Calculate a threshold to say which values are allowed to use further
7. Rank strategy scenario
• highest sum gets best ranking
• bring the strategies into an order (1- best … n-worst)
8. Result interpretation
• If cost differences do exist is it important to evaluated them with the ranking
• Assessment insecurity, consider mistake border line, look for sensitivity
Value benefit analysis
Criteria weight1 e-business strategy alternatives
Alternative 1 Alternative 2 Alternative 3 (Ideal)
eva.2 score3 eva.2 score3 eva.2 score3
Customer focus 15% 10 1.5 10 1.5 10 1.5
Process orientation 20% 10 2 2 0.4 10 2
Cost minimizing 15% 4 0.6 2 0.3 10 1.5
Increase in sales 40% 5 2 10 4 10 4
Success probability 10% 8 0.8 5 0.5 10 1
Total 100% 6.9 6.7 10
Ranking 2. 3. 1.
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E-business roadmap definition• Different kinds of roadmaps used in practice:
• Basic ones: technology, product, organisational process roadmap
• e-business roadmap: combination of technology and organisational process roadmap, ICT enables and is means to an end for business process reengineering
• “e-business roadmap” is metaphor for an atlas of enterprise e-business development
e-business roadmap types
Roadmap class I Roadmap class II Roadmap class III
Combination
Reference object(s)
driving and key information and communication technologies
e-business application systems
enterprise e-business performances
ICT and/or application systems and/or performance enterprise e-business performances
Time Short, mid, and long term
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E-business roadmap design principles
• time based plan where an entity is, where it wants to go, and how it can get there
• Graphical presentation of e-business roadmap objects, its attributes (y-axis) and its combinations over time (x-axis)
• e-business roadmap dimension “time” is fixed → reference point is the present day (time horizon is defined by the object with latest realisation date
• e-business roadmap dimension “e-business” is defined by the chosen attribute to display
time
Object1Attributes1.1
Object2Attributes2.1
Object4Attributes4.1
Object3Attributes3.1
E-b
usi
nes
s vi
ew
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E-business roadmap object attributes
Attribute Source Comments
1.Organisation EE partner specification within the scope of EE constellation specification
2. ICT / application
Specification of e-business strategy within the scope of E-business strategy formulation
3. business process
EE business process model specification within the scope of EE constellation specification
4. Status (life cycle)
Definition within this roadmap design process
ICT / application life cycle phase specification (idea, conception, design, implementation, operation)
5. Type Definition within this roadmap design process
ICT / application “make” or “buy” specification
6. Time Specification of e-business strategy within the scope of E-business strategy formulation
Milestone (implementation)
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Entity
Time
E-b
usi
nes
s vi
ew
EE road map objectattributes:• Entities• Business process• Time• ICT• Status• Type• …
EE entity road mapobject attributes:• Business process• Time• ICT• Status• Type• …
EE
lev
elE
E e
nti
ty l
evel
E-business road map framework
Time
E-b
usi
nes
s vi
ew
Time
E-b
usi
nes
s vi
ew
...
E-business roadmap of the EE has to be coordinated and harmonised with the partner roadmaps
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Summary of e-business road mapping methodology
User benefits Develops effective e-business strategies using analytical methods and tools
Bases on discussion and decisions among employees, managers and business partners
Obtains commitment to organisation’s business objectives and strategies
Anticipates today’s and future situation Creates favourable attitude towards change processes Develops tactics to implement e-business strategies Provides more systematic e-business planning approach Ensures improved management performance, e.g. by
software tool support