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Background. The modern business environment is characterised by competing supply chains rather than competing organisations (Christopher, 1992) - PowerPoint PPT PresentationTRANSCRIPT
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Background
The modern business environment is characterised by competing supply chains rather than competing organisations (Christopher, 1992)
The boundary between organizations and their supply-chain partners are becoming less distinct, and interdependencies between them are increasingly more important (Hagel, 1996)
Organisations should plan for the future by creating a domain into which new business processes, methods and models can be introduced (Heidegger, 1977)
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Flexibility
Upton (1994) defines flexibility as “the ability to change or react with little penalty in time, effort, cost or performance”.
Confusing and ambiguous term (Upton, 1995)
Flexibility is an important factor for organisations to succeed in dynamic and uncertain environments (Koste and Malhotra, 1999; Dreyer and Grønhaug, 2003; Garavelli, 2003; Zhang et al., 2003)
Flexibility is often achieved at a cost to efficiency as there are “set-up costs” that come through changing the organisational response to challenges in the environment.(Phillips and Tuladhar, 2000)
While IT can promote organisational flexibility, the technology used to promote flexibility becomes harder to maintain over time and paradoxically may lead to decreased flexibility in the long run (Lucas and Olsen, 1994)
Inflexible IS have acted as inhibitors of organisational flexibility (Allen and Boynton, 1991)
Web services offer an organisation the possibility of low-cost connectivity across many technology platforms allowing businesses more flexibility. (Hagel and Seely-Brown, 2002)
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Dimensions of Flexibility (Golden and Powell, 1997)
Focus – the area in which flexibility is created (Internal/External)
Temporal – length of time taken to respond to changes in the environment
Range – the degree to which a firm can adapt to foreseeable and unforeseeable changes
Intention – the degree to which a firm is proactive or reactive in the face of environmental changes
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Web Services
Application-to-application transactions conducted via an Internet-based communication link (Aberdeen Group, 2002)
A piece of code is made available over the internet to a remote machine, providing access to its functionality without having to download or install the actual code (Fletcher and Waterhouse, 2002)
Web services perform functions, which can be anything from simple requests to complicated business processes (IBM Web Services Tutorial)
Improvements in…the speed of developing solutions, interoperability with existing systems, deploying mobile systems, security (Microsoft, 2002)
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Web Services
By deploying a Web services platform, companies can
better manage the information they share internally and externally
make employees, customers, suppliers, and business partners more productive.
be able to quickly create new business opportunities,
establish effective partnerships,
speed application integration
forge tight connections with their customers.
Unlike other ebusiness technologies, Web services provide complete platform independence, easing integration between systems as well as promoting interoperability. (IDC Report, 2002)
Web Services have been a victim of the “hype hurricane” (Manes, 2003)
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Web Services Architecture
ServiceRegistry
ServiceProvider
ServiceRequestor
Find Publish
Bind (to protocol)
UDDISOAP / XML
WSDL
In a typical scenario, a provider hosts the implementation for a service. Providers define servicedescriptions for services and publish them to a registry. A requestor then uses a registry to find servicedescriptions for services they are interested in using. With the service description in hand, therequestor binds to a service (Power and Acton, 2002)
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Value Configurations
Value Chain may be obsolete in the post-industrial economy (Van der Heijden, 1993)
Value Chain framework proposed by Porter (1985) is best suited to describing the activities of a traditional manufacturing firm but is less appropriate when analyzing the activities of other types of organisations (Stabell and Fjeldstad, 1998)
IT has been a facilitator of the emergence of these new organisational forms (Tapscott, 2000; Child and McGrath, 2001)
Value Chain is just one of a possible three value configurations based on the work of Thompson’s (1967) interdependence view of the firm
Pooled Sequential Reciprocal
IOS Interdependencies (Kumar and Van Dissel, 1996)
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Value Configurations
Technology Development
Netw ork Promotion and Infrastructure Management
Service Provisioning
Infrastructure Operation
Procurement
Human Resource Management
Firm Infrastructure
ProblemFinding andAcquisition
Execution
ProblemSolving
Control/Evaluation
Choice
Firm Infrastructure
Human Resource Management
Technology Development
Procurement
InboundLogistics
Infrastructure
Human Resource Management
Technology
Procurement
Operations OutboundLogistics
Marketing& Sales Service
Margin
Value Network Value Shop
Value Chain
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Chains, Shops and Networks
Value Chain Value Shop Value Network Value Creation Logic
Transformation of inputs into products
(Re)solving customer problems
Linking customers
Primary Technology
Long-linked Intensive Mediating
Primary activity categories
Inbound logistics Operations Outbound logistics Marketing Service
Problem-finding and acquisition Problem-solving Choice Execution Control/Evaluation
Network promotion and contract management Service provisioning Infrastructure operation
Main interactivity relationship logic
Sequential Cyclical, spiraling Simultaneous, parallel
Primary activity interdependence
Pooled Sequential
Pooled Sequential Reciprocal
Pooled Reciprocal
Key Cost drivers Scale Capacity utilization
Scale Capacity utilization
Key value drivers Reputation Scale Capacity utilization
Business value system structure
Interlinked chains Referred shops Layered and interconnected networks
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Comparing Proprietary IOS and IOS based on
Open Standards (Hagel, 2002; Estrem, 2003)
Interorganisational Systems and EDI
Characteristics of Web Services-based IOS
Dynamic Environment - Poorly suited to a complex and shifting web of relationships
Provide an environment that enables developers to rapidly design and develop applications
n2 integration problem Simplicity – reducing complexity at the end points of the connections makes it easier and less costly for new participants to establish connections.
Assume one decision maker has sufficient power to ensure that all the participants adopted a common technology infrastructure
Distributed centres of control – as number of business partners grows and as the range of relationships that each partner must support expands, the assumption of a single point of control and context become increasingly untenable
Costly to implement Flexible, low cost connections across applications Long lead times to deliver Loose coupling between client and server applications
that supports more dynamic and flexible integration of application modules
Concerns about lock-in Openness – a solid foundation of ubiquitous standards and protocols reduces concerns about lock-in
Diversity of proprietary information systems and lack of effective information technology standards have posed significant barriers to the effective integration of business processes within the enterprise and beyond the traditional boundaries of the business
Heterogeneity - Designed to leverage the standards based architecture of the Internet and World Wide Web to promote interoperation across a wide range of computing platforms
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Previous Studies
Found that IOS can both enable and constrain flexibility (Golden and Powell, 1997)
Focused on proprietary technologies (EDI)
Basing electronic networks on proprietary standards limits their reach to an exclusive set of organisations (Evans and Wurster, 2000)
Focused on traditional industries
Sequential relationships (Dyadic IOS)Value Chain Configuration (Manufacturing Orgs)
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Research Gap (What’s new?)
New Technologies (Open Standards, WS)
Other Value Configurations (Shop, Network)
Other business interdependencies (pooled + reciprocal)
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Research Objective + Questions
Objective
To explore how web services affect the ability of an interorganisational network to respond to changes in the business environment
Questions
How do web services affect the flexibility of a node to respond to changes in the interorganisational network and external environment
How do web services affect the flexibility of Interorganisational networks of supply chain partners to respond to changes in the environment?
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Unit of Analysis
A single firm is not a valid unit of analysis for IOIS research studies because the environment the firm operates in will also be affected by IOIS implementation (Kurnia and Johnston; 2000, 2002)
Reimers et al. (2004) propose the Industry Segment Value System (ISVS) as the unit of analysis for IOIS studies
While an industry is defined in terms of products, industry segment is defined in terms of interactions among firms (Reimers et al., 2004)
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ISVS (Reimers et al., 2004)
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Choice of Cases
Focal Organisation with Horizontal and Vertical partners
Diversity of Value Configurations in the ISVS (chain, shop, network)
Diversity of Supply Chain Interdependencies in the ISVS (sequential, pooled, reciprocal)
Dynamic business environment
3 Industry Segment Value Systems (ISVS)
TravelFinancial ServicesMobile Value-Web
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Research Strategy
Case Studies of 3 ISVS’s
15-20 organisations in total
Semi-structured Interviews
Case Study Protocol
Assess Web Service Issues (internal + external)
Assess Flexibility Issues (internal + supply chain)
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Case Study Instrument
Preliminary Focal Orgs in each ISVS
Traventec (Travel)
O2 (Mobile Services)Fexco (Financial Services)
Identify players (Horizontal and Vertical) in each ISVS
Identify and classify connections (type of interdependencies)
Applied at the level of the environmental change
Classify types of environmental changes
customer, competitor, supplier, government regulation etc.
Classify Importance of env change, impact of change + response time
Difference in flexibility before + after use of Web Service applications
3 ISVS – identify the players – identify and classify connections
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Case Study Instrument
Identify + Bound ION
Identify environmental changes to which network has to respond
Identify elements of network affected by the response
Intra node
Categorised by activities
Categorised by interdependencies
Inter node
Categorised by interorganisational activities
Categorised by interorganisational interdependencies
Classify responses by flexibility dimensions (time, range, intention + focus)
Relate to inter + intra node changes
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Potential Outcomes
Identify new WS-based IOS
Classification of WS
Measures of intra- and interorganisational flexibility
Reality-checking/hype-busting