The process of innovating an eBusiness Model

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The process of innovating an e-Business Model

• Mr Yagoulis
• E-business consultant
• MSc, MBA

2
Agenda

• Business Models for e-business
• Definition,
• Models,
• 7cs
• 2. A model of e-business Electronic Public
  Procurement
• What is?
• How it works?
• What needs to be?
• Examples

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Internet vs. e-business business models

• "Asking how you make money on the Internet is a
  primitive question, like asking how you make
  money on the telephone.
• Don Tapscott, Alliance for Converging
  Technologies.
• But e-business is
• Business Change
• Human resources continues training
• Electronic networks and devices
• Economic Regulation changes
• change of business Mentality

E-business Models is not a clear sky It is a
cloudy mountain!
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E-Business

• Lou Gerstner (IBMs CEO)
• E-Business is all about cycle time, speed,
  globalisation, enhanced productivity, reaching
  more customers and sharing knowledge across
  institutions for competitive advantage

E-business.. like driving an iceberg!
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There is no single E-business model

• One set of principles apply to publishing, others
  to electronic commerce, and so on.
• The Internet is not an entity, but a technology
  for carrying many kinds of services, all with
  their own business model.
• On the Networks, as well as in the real world,
  there will be many different business models.

The HAL 2001 A Space Odyssey
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Four Business Models http//www.strategy-busines
s.com/

• Model No. 1 Selling content (AOL, MINITEL)
• Model No. 2 Turning Volumes Of Traffic Into
  Revenue Streams
• Model No. 3 E-commerce.
• Model No. 4 E-commerce companies in which
  strategy revolves around the idea of never making
  a profit selling real products for real money.
• NO MAGIC BULLET

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A key to business success is to model what's
already working

• Most successful businesses have borrowed an
  existing idea and improved it or re-applied it in
  a new way Don't re-invent the wheel. Most
  businesses making money today fall under one of
  six categories.
• Products
• Services
• Information industries
• Internet careers
• Electronic publishing
• Electronic advertising

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Products for Web Commerce
Horizontal(Mass) Market
Market
Low
Nature
Innovation Element
Intangible
Tangible
Books,
CDs, Tapes/Video, Software, Music, Consulting,
Banking, etc
High
Niche Market
Yagoulis N, Business Models for EC
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The Cs of E-commerce

• http//sunil.umd.edu
• 1st generation e-commerce The three C's,
  content, community, and commerce, are the most
  invaluable elements of the e-commerce market.
• People must have their finger on the pulse of the
  market and use the three C's to their advantage.
• New generation e-commerce of 8 C s e-business
• the three Content (e.g. Yahoo), Community
  (Ivillage), Commerce (e.g. Amazon), Communication
  (e.g. Doubleclick), Connectivity (e.g. Cisco),
  Collaboration (Mercata), and Customization (e.g.
  Netperceptions) and finally Customer care (eg.
  Dell) other involve Continuity, Convenience,
  Commitment , Control

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P.Timmers-11 Models of E-Business
Electronic Commerce Strategies and Models for
Business to Business-trading, Wiley, 2000,
England
Maximum
Value-Chain integrator
Multiple Integration
Third-Party Marketplace
Collaboration Platform
Virtual Business Community
Integration/ Convergence
e-mall
Value-chain service provider
e-procurement
e-auction
trust services
e-shop
Single Function
Info brokerage
Minimum
Maximum
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Public E-procurementA business model for the
Public Sector

• Government procurement is the acquisition of
  goods, services, and public works in a timely
  manner that results in best value to the
  government and the people.

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How important is

• Typically, procurement accounts for 20 of
  central government expenditure, and up to 50
  percent of public expenditure in developing
  countries (including construction contracts).
• In EU is about 14 of GDP

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Involves..

• Central government, Statutory boards and
  nonministerial bodies and agencies as well.
• Often,
• the purchase of goods and services by
  nongovernment public entities is far greater than
• that undertaken by ministries and reflected in
  the budget.
• These entities follow regulations similar to
  those of ministries, and are subject to
  government audit in their use of funds.
• Centralised and Decentralised systems

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Private vs Public Procurement (PP)

• The public
• must follow prescribed competitive procedures,
  and the rules
• subject to oversight by the legislature and
  audit. Can cause vast political problems,
• Non Stable Relationships
• public procurement a tool for public policy
  goals

• A private firm
• less emphasis on formal competitive bidding,
  documented procedures, and constraining conflicts
  of interest.
• Incentives to purchase goods for high value for
  their price, and to hire contractors who will
  accomplish high-quality jobs at competitive
  prices.
• Accountability are related to results, not
  process,
• Stable Relationships
• Value for money the only criterion

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Objectives of PP.

• Economy
• Import Substitution
• Fostering Competition
• The Governance Dimension (Predictability,transpare
  ncy)
• Protecting the Interest of Citizens
• Environmental Protection

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Common Problems

• Systematic Neglect
• Organizational Arrangements To Centralise or
  decentralise?
• Strict rules vs. discretion to agencies
• Role of central procurement
• The degree of corruption and inefficiency risks
  or delegations

• Variable of Risk
• specificity
• market structure and
• size and complexity of the transaction.

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Stages

• Forms and Stages of Procurement (Depend on each
  country)
• Generally there are the following stages
• 1. competitive bidding
• (also open tendring) (international or
  national)
• 2. shopping (international or national),
• price quotations obtained from at least three
  suppliers for readily available off-the-shelf
  goods of small value (lt40.000 EUROS)
• 3. direct contracting
• (sometimes called sole-source contracting or
  direct selection),
• 4. force account, or procurement through agents.

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Procurement Processesexample

• Competitive Bidding
• Stages of the process
• The complexity of the process depends on value
  and nature of goods
• The requirements
• a clear and fair description of what is to be
  purchased
• a publicised opportunity to bid
• the fair criteria for selection and decision
  making
• a receipt of bids from responsible suppliers
  (or contractors)
• Etc

• The STAGES
• prebid,
• public notice and invitation of bids,
• bid opening and evaluation,
• resolution of complaints, and
• contract award and conclusion.

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IS Development requirements
Nongovernmental Agencies, extended Public local
government, Hospitals, Police, Public
Utilities,etc
Military
Central Government (Ministry)
Vendors, bidders
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INTERNET
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Issues involved

• IS development
• Business change
• Legal Issues Policies
• E-commerce Marketplace
• (B2B,procurement, auctioning, product catalogues,
  security (digital signatures, encryption,
  training, Vendors Registry, ERP, etc.)

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Main systems

• Clearinghouse
• Tendering System

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Other Issues

• The European Union has its priorities
  (http//www.europarl.eu.int/summits/lis1_en.htm
• http//europa.eu.int/comm/internal_market/en/publp
  roc/index.htm) Lisbon EU Council March 2000 (25
  of public procurement on-line by 2003)
  (Conclusions of Council, art.17), also in
  http//www.soiorg.org/pdf/SOIKonfMishou/sld005.htm
  
• Standards of public e-procurement affects the
  private procurement systems heavily
• Plays a critical role to SME and their
  involvement in public bidding.
• Outsourcing is important .

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Examples on-line
Various countries that implemented Public
e-procurement http//www.e-envoy.gov.uk/publicatio
ns/reports/benchmarking/pro_intro.htm Ireland htt
p//www.e-tenders.gov.ie/cmod/tenders.nsf
Singapore http//www.gebiz.gov.sg
Hong-Kong http//www.apecsec.org.sg/govtproc/gp_
hk.html
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Other Links

• Greek Secretariat for Commerce, Ministry of
  Development
• www.gge.gr
• LAs local government Procurement, a case study
• www.ecomworld.com/portals/procurement
• The Development of Basic Technologies for
  Pracical Electronic Public Procurement
• www.ecom.or.jp/ecom_e/latest/ecomtodayno7/pj05.ht
  ml
• www.ecom.jp/qecom/ecom_e/e-today/no5/pj05.html
• European presentation of Public Procurement
• http//www.soiorg.org/pdf/SOIKonfMishou/sld005.ht
  m
• ELPROElectronic public procurement for European
  industry
• http//www.cordis.lu/ist/98vienna/xelpro.htm ,
• Report Public E-Procurement Mired in Red Tape
• http//www.ecommercetimes.com/perl/story/10136.ht
  ml
• USA, http//egov.gov
• Europe, Special Report, http//europa.eu.int/comm/
  internal_market/en/publproc/sector/publrep.htm
• SIMAP project http//simap.eu.int/EL/pub/src/main1
  .htm ,
• http//www.ipf.co.uk/procurement/posts/post14.htm
  
• Canadian project http//www.merx.cebra.com/Service
  s/AboutMERX/English/MK_SiteMap.asp
• General Resources, http//sbe.napier.ac.uk/scfm/ep
  rocure.htm