delportvervestvanheck emj april 2004

European Management Journal Vol. 22, No. 2, pp. 167–182, 2004 2004 Elsevier Ltd. All rights reserved.Pergamon

Printed in Great Britain0263-2373 $30.00doi:10.1016/j.emj.2004.01.013

In Search of Margin forBusiness Networks:The European PatentOfficeDOMINIQUE DELPORTE-VERMEIREN, Erasmus University, RotterdamPETER VERVEST, Erasmus University, RotterdamERIC VAN HECK, Erasmus University, Rotterdam

Often-mentioned features of a business networkare a strong inter-organizational design and aninteractive and dynamic set of relationships actingin concert with one another for a common goal,bringing together core capabilities of differentorganizations to accomplish business improve-ments. One of the benefits of a business network isthe increased flexibility of linking actors together.This provides a more agile arrangement for the net-work to produce from actual customer requirementsas a starting point, and not on the basis of assumedor forecasted customer needs. However, organiza-tions are facing difficulties in assessing the valueof investments in their business network. There isno valid method to execute an assessment of mar-gin. In this article an assessment method and toolare developed to assess margin in business net-works. A method is required that can give a moredetailed assessment on a variety of criteria, or keyperformance indicators: (1) cost reduction, (2) rev-enue generation, and (3) increased flexibility.Therefore, a 14-step research method wasdeveloped, together with a related decision supportsystem (DSS), named the Business Network Navi-gator. The research method was tested in a real-lifesituation i.e. redesigning the business network ofthe European Patent Office (EPO). The results of theanalysis and lessons learned are presented. Con-clusions with regard to the usability and validity ofthe assessment method and tool are formulated. 2004 Elsevier Ltd. All rights reserved.

Keywords: Business networks, Margin improve-ment, Information and communication technology,

European Management Journal Vol. 22, No. 2, pp. 167–182, April 2004 167

Key performance indicators, Case study, EuropeanPatent Office

Introduction

The main theme of this article deals with the develop-ment of a formal method and tool to assess the reen-gineering of a business network. Reengineering is atopic that has been widely addressed in the literature.It helps define strategies for bringing manufacturers,suppliers, and customers closer together (Liker et al.,1995). Reengineering means taking steps to redesignand simplify business systems and processes, tosearch out best practices (Prasad, 1999), to develop amore competitive and core-competent workforce(Prahalad and Hamel, 1994), to explore new businessmethods (Kearney, 1997), or to radically transformbusiness (Venkatraman, 1994). It fosters thinking out-side the comfort zone (Luther, 1997), relies on value-added benefits to both the customer and the business(Vervest and Dunn, 2000), relies on strategic tech-nology insertions (Shillito, 1994) during the productlife cycle, and focuses heavily on the seven T’s(talents, tasks, teams, techniques, technology, time,tools) (Prasad, 1999).

However, is there a structured method for assessingthe reengineering of a business network — in parti-cular, prior to performing the actual change in thebusiness network? Such a method would be increas-ingly more important as so many industries face thedemands for customization. This customization chal-lenges them to tailor products and services to the spe-

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cific requirements of every individual customer,while at the same time maintaining their current lev-els of economies of scale (Pine, 1993). It forces organi-zations to be more flexible (defined in terms of theirability to produce different and customizedproducts) towards the market without losing profit-ability, i.e. margin.

One questions the suitability of the current organiza-tional design, which originated from the traditionalsupply chain (Porter, 1985), to respond quickly to achanging environment. The common view on organi-zational design is that of a streamlined pipe that pro-cesses raw material into finished goods and deliversthem to customers. But this is rather simplistic; thereality is much more complex: a network of vendorssupplies an organization, which in turn, supports anetwork of customers, with third-party service pro-viders (e.g. transportation companies) helping to linkthe entire network of actors together. Organizationsare increasingly more aware of the benefits of a dif-ferent approach to organizational design: ICT-enabledbusiness networks. Examples of these new adaptiveorganizational designs include Sun Microsystems’virtual corporation, Dell Computers’ dynamic net-work, Olivetti’s platform organization (Ciborra, 1996)and Ikea’s value constellation network (Normannand Ramirez, 1993). Organizations struggle with howthey should accomplish this, and to what extent itwill influence their current level of flexibility andprofitability. They need methods and managerialtechniques. Modular Network Design(Hoogeweegen, 1997; Delporte-Vermeiren, 2003) isone of the methods that supports the design andassessment of costs and throughput time of ICT-enabled business networks.

This article puts emphasis on the questions: Is it poss-ible to develop a method for assessing the reengin-eering of an ICT-enabled business network withrespect to margin? And what impact will such amethod have in real-life situations?

We will present a method to assess margin in busi-ness networks and demonstrate the value of themethod by presenting a detailed case study of theEuropean Patent Office.

Aspects of Business Networks

Often-mentioned features of a business network are astrong inter-organizational design and an interactiveand dynamic set of relationships acting in concertwith one another for a common goal, bringingtogether core capabilities of different organizations toaccomplish business improvements. One of the bene-fits of a business network is the increased flexibilityof linking actors together. This provides a more agile(Preiss, 1994) arrangement for the network to pro-duce from actual customer requirements as a starting

European Management Journal Vol. 22, No. 2, pp. 167–182, April 2004168

point, and not on the basis of assumed or forecastedcustomer needs.

The critical difference between this and Porter’s(1985) traditional view of value chains — which isthe division of the company into a series of value-adding activities connecting a companies’ supplyside with its demand side — is that here, businessnetworks start with the end customer requirementsand work backwards in the value chain. This breakswith traditional approaches that focus solely onreducing costs such as transportation or productioncosts. It supports a customization viewpoint in whichproducts and services are offered in ways that sup-port individual customer requirements and createadded value for the customer of the value chain. Pine(1993) calls this ‘customization’ being the creation ofproduct or service for the market of one. The newway of thinking about organizational design includesthe assumption that organizations in the businessnetwork can and want to accelerate the process toserve the customer. One of the consequences is thatorganizations in the business network should basetheir production on actual customer demand insteadof on stock (Hoogeweegen, 1997, p. 223).

According to Thorelli (1986, p. 37) a network can beviewed as consisting of (1) actors’ positions occupiedby firms, households, strategic business units insidea diversified concern, trade associations, or othertypes of organizations and (2) links manifested byinteractions between positions.

In Figure 1, a business network is viewed from theperspective of actors, customers, positions, and linksas the constituting elements. The starting point forthe formation of the business network is actual cus-tomer demand, denoted as the order placed by the‘begin-customer’ (as opposed to the term of ‘end-customer’ in the supply-driven value chain). Theactors (e.g. A1, B1, C1) working together to fill thesame order form a temporary alignment. In addition,

Figure 1 A Business Network, Involving a Large Num-ber of Actors Contributing to the Filling of Several Cus-tomer Orders (based on Thorelli, 1986; Anderson et al., 1994;Hoogeweegen, 1997)

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the business network model indicates the actors thatare actually participating in the temporary alignmentto produce to order. The actors in several temporaryalignments working together to fill several orders forthe same customers are considered as members ofone particular network (Anderson et al., 1994; Kambiland Short, 1994). Furthermore, in the business net-work, the relationships (i.e. links between the activi-ties of the several actors) are specified.

In Figure 1, several perspectives and levels of analy-sis can be considered. The first distinction is the levelof analysis of the order-filling process, which can beconsidered from three perspectives: (1) the customer,(2) the actor, and (3) the network.

The perspective of connected relationships or busi-ness networks is important for our research. Withrespect to business networks, Anderson et al. (1994)describe two main perspectives. The first refers to thenetwork as an organization-set and has been definedby Aldrich and Whetten (1981, p. 386) as ‘thoseorganizations with which a focal organization hasdirect links.’ The second is formulated by Andersonet al. (1994, p. 2) as follows: ‘A business network canbe defined as a set of two or more connected businessrelationships, in which each exchange relation isbetween firms that are conceptualized as collectiveactors.’ They continue with ‘connected means theextent to which exchange in one relation is contingentupon exchange (or non-exchange) in the otherrelation (Cook and Emerson, 1978, p. 725; Andersonet al., 1994, p. 2). From the perspective of connectedrelationships, the interaction between the focalrelationship (between seller and buyer) and otherrelationships (of the seller and/or buyer with thirdparties) is investigated. In this article, the perspectiveof analysis is that of the focal actor in the businessnetwork, which we define as follows:

The focal actor in the business network is the organizationthat analyses the customer order on its service require-ments and from there allocates the business activitiesnecessary to fill that particular order to other actors in thebusiness network.

The concepts (i.e. network horizon, network context,and network identity) developed by Anderson et al.(1994) can be used to analyse whether an organiza-tion is likely to be an appropriate focal actor. Rel-evant questions in this analysis include the following,for example: How extended is the actor’s networkhorizon? How many actors (i.e. subcontractors) canbe approached to fill a particular customer order?How do customers perceive the attractiveness of theactor’s relationships, activities, and resources that isreflected in the network identity? At this point in thediscussion, the working definition of a business net-work that will be used in the remainder of this articleis introduced:

A business network is the structure of inter-organizational


relationships between the focal actor and interdependentexternal actors closely linked and working cooperativelytogether to fill customer orders.

The advantage of this definition is that it enhancesthe elements of strategy, structure, and performancein the interaction. Thorelli (1986) supports this viewwhen arguing that ‘the structure – strategy(conduct) – performance paradigm could beextended to comprise the network.’ van Alstyne(1997) also supports our view when stating that ‘net-works are specifically characterized by elements ofstructure, process, and purpose/goals.’

The use of ICT can increase the speed with whichactors can make new links to form new relationships.However, the fact that actors in the dynamic businessnetwork have to do business with a number of differ-ent business partners leads to specific risks. We haveclassified the critical success factors along threedimensions: (1) drivers for partnership, (2) main facil-itators, and (3) characteristics of successful partner-ship (Table 1).

The margin of a single organization (i.e. an actor ina business network) can be defined as ‘total revenuesof the organization minus total costs’ (Porter, 1985).The margin of a business network would be ‘the totalrevenues of all the actors involved in the networkminus total costs,’ which is not a commonly held con-cept (Delporte-Vermeiren, 2003).

With respect to the reengineering of the business net-work with the use of ICT, one would want to look atthe performance improvement of the entire businessnetwork, in which various criteria — also called keyperformance indicators (KPIs) — are considered. Keyperformance indicators refer to a relatively smallnumber of critical dimensions that contribute morethan proportionally to success or failure in the mar-ketplace (Christopher, 1998). This implies a dis-cussion of trade-off between multiple key perform-ance indicators. In a business network, all theperformance indicators are composites of, anddependent on, lower-level measures such as the actorand/or process. Examples of some frequently men-tioned KPIs that relate to these three levels are illus-trated in Table 2, based on the work of Hoogeweegen(1997); Toppen (1999) and Delporte-Vermeiren(2003).

Business network performance refers to the performanceof a business network if it is to be effective andefficient in matching seller’s offerings with buyer’spreferences from (1) the customer’s perspective, (2)the actors’ perspective, and (3) the perspective of con-nected relationships.

A formal redesign tool for assessing the reengineer-ing of the ICT-enabled business network in terms ofmargin would need to include the following:

❖ a formal model that captures the ex ante assess-

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Table 1 Critical Success Factors for Business Network Partnerships

Drivers for partnership in business Main facilitators in business network Characteristics of successfulnetworks partnerships partnerships in business networks

Asset–cost efficiencies (cost reduction) Strategic complementarity of actors Distribution of ownership, power, &loyalty among actors

Customer service (e.g. shorter cycle Actor compatibility (common culture and Systematic exchange of informationtimes) business goals) between actors (rapid & accurate

transfers)Marketing advantage (e.g. entrance Compatibility of managerial philosophy and Trust, commitment, & communicationinto global markets) techniquesProfit growth (e.g. creating new Mutuality (joint objectives, share sensitive Extendedness (the continuation of theservices) information) relationship in the future)

Symmetry in power between actors

Table 2 Some Relevant Key Performance Indicators on Three Levels

Level of KPIs Key performance indicator Explanation

Business Network Versatility Ability of the business network to process a greater number of differ-ent products

Agility Speed at which the business network makes links with actors in thebusiness network, measured in total throughput time in the businessnetwork

Total costs Sum of all the costs related to the goods and services produced inthe business network

Total revenues Turnover of all the goods and services traded in the business network

Actor Responsiveness Flexibility of the organization, measured in lead time or order-cycletime

Throughput time Time needed to perform the chain of business processesTotal organization cost Sum of all costs related to the transactions of an actorTotal organization revenues Turnover of the organizationTotal margin The end result of the total revenues generated minus the total costs

performed by the organization.

Process Business process effectiveness Quality as perceived by customersBusiness process efficiency Value-to-cost ratio (output divided by input)Business process cycle time Lead time necessary to complete a functional transactionProcess costs Costs arising when the process is executedProcess yield Outcome of the process

ment of the margin and flexibility of the busi-ness network;

❖ a modular redesign method, since the use ofmodularity and ICT in a business network areclosely related;

❖ a formal protocol to support the ‘controlledchange’ of the business network through the defi-nition of generic stages and activities in the rede-sign process.

The modular network design (MND) method orig-inally developed by Hoogeweegen (1997) andextended by Delporte-Vermeiren (2003) provides asound basis for assessing BN rearrangements madepossible through the use of ICT. This methoddevelops modularity as a key concept for assessingand managing the complexity of ICT-enabled rede-sign of business networks. It does not, however,address the concept of margin — defined as total


business network revenues less total business net-work costs — as an assessment criterion, which needsto be developed and tested. In particular, thisenhancement of the MND method should addressthe relative changes in business performancebetween various actors in the business network. Thisis not a trivial task since it requires, inter alia, com-monality among actors on the use of comparablecosting methods and the exchange of internal dataon business performance.

The MND method, despite its attractive potential toreduce complex business tasks into common andshareable modules, does not provide a methodology toapply the method in real-life situations. This method-ology — or protocol for its use — needs to be addedto create a sound assessment method that can betested in real-life business situations.

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Assessment of Business Networks

Introduction

Redesigning an existing business network in order torealize a profitable ICT-enabled business transform-ation is an initiative that has broad consequences interms of satisfying the needs of all stakeholdersinvolved, including customers. It requires disciplinedthinking about the key drivers of business successand margin-flexibility by tracing them through thecustomer, the product and service offerings, the BNprocesses, and ultimately, the actions of the variousactors involved. It requires a shift in attention froma preoccupation with individual key performanceindicators (KPIs) to an awareness of how these KPIswork as a system and how they can lead to increasedmargin-flexibility for the business network. The pro-cess of getting to the final redesign option is valuablebecause redesign managers can gain tremendousinsight into how the KPIs of the actors involved inthe network interrelate. Focusing the redesign teamon such a basic process is one of the most importantthings one can do to improve management decision-making in both strategy and implementation.

The research protocol that supports BN managersusing the ex ante margin-flexibility assessmentmethod in their redesign efforts is formalized below.To allow flexible access to the research protocol inreal-life situations, a decision support system hasbeen developed.

The Five Redesign and Assessment Stages

The principle stages and activities in ICT-enabled BNredesign aimed at improving the margin-flexibility ofthe business network can be derived from the differ-ent requirements related to the enhancement of theMND method, which have been discussed in the pre-vious two chapters. In summary:

1. The first requirement relates to the support of the‘envision stage’, i.e., support at the strategic levelthrough the analysis of (1) the strategy, includingthe level of electronic integration, and (2) theshared objectives of the current business network.

2. The second requirement relates to the investi-gation of the (re-)distribution of margin-improved flexibility.

3. The third requirement relates to the support of the‘controlled system’ change and to the translationof ICT redesign guidelines resulting in margin-improved redesign options.

These requirements are interrelated. Assuming thatstructure follows strategy (cf. Thorelli, 1986), theanalysis of the current BN structure requires anunderstanding of the overall strategy of the businessnetwork. This will help the redesign decision-makers


to define the boundaries of the business networkunder study. The boundaries of the business networkunder study can be defined by identifying the pro-duct–market combinations that the business networkis serving, since it is customer demand that drivesthe activities of the business network (see Figure 1).A change in customer demand will affect the currentproduct –market combinations the business networkis serving and, thus, lead to the adaptation of thestrategy. The shared objectives of each actor and ofthe current business network as a whole can bederived from the characteristics of the product–mar-ket combinations and the strategy of the business net-work. These objectives can be monitored and evalu-ated by translating them into predefined keyperformance indicators at the level of the process, theactor, and the business network, itself. When the per-formance of the business network does not satisfy theshared objectives, measures, such as the following,will need to be taken:

❖ Changing the strategy of the business network,e.g., serving other, more profitable, product-market combinations by establishing new stra-tegic partnerships;

❖ Changing the objectives of the business network,e.g. from a focus on cost reduction to a focus onrevenue generation or service enhancement;

❖ Changing the structure of the business network,e.g. by changing the roles and/or relationshipsbetween actors;

❖ Changing the product and process characteristics,e.g. product/service variety or workflow routines,sequence of process tasks, etc.;

❖ Changing the level of electronic integration at thelevel of the process, actor, or business network.

When significant gaps in performance arise, decision-makers will want to consider alternative ICT-enabledoptions for the business network. Alternative designscan be defined by adjusting the structure of the busi-ness network, which can be visualized and modeledbased on the use of the redesign variables. Theimpact of the adjustment of the redesign variables(i.e. the use of ICT) on the performance of the busi-ness network can be assessed and compared to cur-rent performance. Then, the decision to implementthe alternative design, to define other alternatives, orto terminate the evaluation process can be made.

In summary, the following five stages can be dis-tinguished in the process of redesigning ICT-enabledbusiness networks:

1. Analysis: The first stage involves getting infor-mation and developing a common understandingabout the product-market combination the busi-ness network is serving, its strategy and sharedobjectives. It contains the definition of the corre-sponding margin-flexibility-related KPIs and thedefinition of the available redesign variables. In

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this stage, the boundaries of the business networkunder study will be defined.

2. Modeling: The second stage involves the modelingof the current BN design and the predefined, alter-native ICT-enabled design options.

3. Assessment: In the third stage, the ex post assess-ment of the margin-flexibility of the current BNdesign and the ex ante assessment of the alternativeICT-enabled design options are carried out,together with a comparison of the various designs.

4. Redesign decision-making: The fourth stage involvesthe discussion of the performance gaps in themargin–flexibility of the current design and thepossibilities for improvement due to ICT, thus set-ting the boundaries for the alternative ICT-enabledredesign options that will need to be modeled andassessed. This stage includes the process of choos-ing the final redesign option.

5. Redesign implementation: The fifth and last stagerelates to the actual decision-making forimplementing redesign. This stage includes ident-ifying the best conditions for implementing thechosen ICT-enabled redesign.

The Research Protocol

These five stages, together with their related activi-ties, result in a five-stage, 14-step research protocol(Figure 2).

The Business Network Navigator

To allow flexible access to the research model and tosupport the modeler and/or decision-maker in theconsecutive steps of the research protocol, a newautomated software program, called Business NetworkNavigator was developed. It supports the decisionsinvolved in steps 3–6 and 9–11 of the research proto-col. Business Network Navigator was programmedin Arena . Arena provides alternative and inter-changeable templates for graphical simulation mode-ling and analysis modules that one can combine tobuild a fairly wide variety of simulations. Therefore,the Arena environment can be used to include menu-driven point-and-click procedures for constructingthe following:

❖ databases of all available redesign variables andthe performance indicators related to marginflexibility that are necessary to capture the bound-aries of a business network design;

❖ business network scenarios that visualize the fill-ing of orders through the process-module networkand simulate change in business activities, roles,and linkages between actors in the business net-work;

❖ management reports — as the simulation pro-ceeds, the simulation tool keeps track of statisticalvariables to calculate the required output.


How to Improve Margin in theBusiness Network of EPO

The EPO Case

This case study — of the European Patent Office(EPO), Dutch Patent Office (DPO), ABN/AMROBank, and PTT Post — was conducted in the periodfrom January 2000 to December 2000. In the casestudy the research framework was used to assist theproject team responsible for market testing a newWeb-based application service: Epoline . With theaid of a specific customer process (i.e. the process ofapplying for a European patent), the relationshipsbetween applicants, the European and Dutch Patentoffices, the ABN/AMRO Bank, and PTT Post wereinvestigated and redesigned with the use of ICT.First, the current business network was analysed;then the current BN scenario, together with one ICT-enabled redesign scenario, was modeled andassessed. The same process was analysed in bothscenarios, which makes them comparable in terms of:

❖ the type of patent services requested by the appli-cants;

❖ the relationship between types of patent servicesand ICT-enabled processes requested to producethese services;

❖ the relative change in levels of margin flexibility;❖ the distribution of expected benefits among the

actors in the business network.

The focal actor, the European Patent Office, was cen-tral to the analysis of the business network.

Experience with the Research Protocol

Step 1: Identifying Product–market Combinations andthe Current Strategy of the Business NetworkThe result of the European countries’ collective polit-ical determination to establish a uniform patent sys-tem in Europe, the European Patent Organizationwas established by the Convention on the Grant ofEuropean Patents (EPC) signed in Munich in 1973.As a centralized system for granting patents, admin-istered by the European Patent Office on behalf of allcontracting states, it is a model of successfulcooperation in Europe. The European Patent Organi-zation comprises a legislative body, the Administrat-ive Council, and an executive body, the EuropeanPatent Office (EPO). The EPO was established in1977. It has six buildings in four locations (Munich,The Hague, Berlin, and Vienna) in three countriesand employs nationals from all contracting states. Itis entirely self-financing; its operating and capitalexpenditures are defrayed out of procedural fees andfrom a proportion of the renewal fees for Europeanpatents. The remainder of the renewal fees is paid tothe contracting states. In a typical year, approxi-mately 113,340 patent applications are filed (EPO,2002). To respond to international customers apply-

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Figure 2 The Research Protocol. P/M/Cs: Product –market Combinations; BN: Business Network; KPIs: Key Performance Indi-cators; BNR: Business Network Reengineering

ing for a European patent, the European Patent Officeand national patent office (i.e. the Dutch Patent Office[DPO]) work together based on institutional arrange-ments for partnerships. The respective relationshipsof the EPO and DPO with PTT Post andABN/AMRO are based on short-term commercialcontracts.

Step 2: Defining the Business Network’s CurrentObjectivesBecause of the rapid yearly growth in European pat-ent applications (13 per cent in 1998 and 7.4 per centin 1999) and the related increase in workload andbacklog at the EPO, the European Patent Organiza-tion was forced to look at ways to boost the efficiencyand productivity of the procedure for granting Euro-pean patents. At the end of 1999, the decision wasmade to reengineer business network transactions.

From the EPO’s point of view, the main drivers forthe redesign were:

❖ to increase the efficiency and productivity of theexisting procedure for granting patents by (a) sim-plifying internal procedures and (b) eliminatingclerical work for the applicant as well as for theEPO;


❖ to ‘democratize’ the application procedure andenlarge the customer base by providing pan-European interactive services;

❖ to expand its ICT infrastructure to other BN actors,i.e., the national patent offices.

The main drivers for the participation of the otheractors in the redesign were:

❖ for PTT Post: to find future business opportunitiesfor document handling and processing services;

❖ for DPO: to increase internal efficiency and pro-ductivity;

❖ for ABN/AMRO bank: to find opportunities forinternal cost savings and to introduce electronicbanking services at the EPO.

The reengineering task force (at the level of the EPOBoard) formulated an overall redesign strategy todirect the team members in their reengineeringefforts. The project team used this redesign ‘actionagenda’ to design the new customer distribution sys-tem.

Step 3: Defining the Key Performance Indicators in theBusiness NetworkThe first consideration in executing this step was toinclude all key persons involved. Therefore, the key

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persons responsible for the redesign at the EPO,DPO, PTT Post, and ABN/AMRO were officiallyapproached. Initially, there was a problem obtainingthe necessary costing data at the inter-organizationallevel (i.e. the level of the business network), so thestarting point was the definition of the predefinedkey performance indicators at the actors’ level. TheKPIs at the business network level were derivedfrom there.

The key performance indicators were defined as fol-lows:

❖ Operating costs contain the total (i.e. the fixed andvariable) costs of production tasks related to theapplication for a European patent, including thepayment of the application fee.

❖ Transaction costs contain the fixed and variablemarketing, sales, and internal and external com-munication costs related to the application for aEuropean patent. Investment costs in ICT, per se,were not included, but the ICT effect was calcu-lated based on the related, fixed, and variableoperating costs. All actors agreed to consider a‘single-channel position’ for each order, whichmeans that allocation of the total operating costsrelate to that one specific channel.

❖ Sales revenues contain the amount of relevant setsof service elements traded internally and exter-nally in the business network and their corre-sponding selling prices.

❖ Agility contains the operating time (i.e. the time ittakes to perform the production tasks related toapplying for a European patent). Data on actoragility were available within each actor.

❖ Versatility contains the measurement of the totalamount of relevant sets of service elements relatedto the application for a European patent, includingthe payment of the application fee. Actor versa-tility data were available from the start for theEPO and PTT Post, since part of their portfolioswere already modularly designed. ForABN/AMRO and the DPO, the relevant part ofthe portfolio had to be modularly described firstbefore the necessary data could be gathered.

Step 4: Defining the Redesign Variables in the BusinessNetworkSince two of the four actors (i.e. EPO and PTT Post)were already familiar with the modular design ofproducts and processes, the project team quicklyadopted the proposed redesign variables. At thebeginning of the modeling study — given the priorityof market testing epoline , the research budget, andthe timetable — the analysis was set up in terms ofthe following:

❖ the actors involved and their relationship to theapplicant, to the EPO and DPO, to the mail serviceprovider (i.e. PTT Post), and to the financial insti-tute (i.e. ABN/AMRO), as illustrated in Figure 3;

❖ the steps in the application process, including pay-


ment of the application fee and confirmation to thecustomer, as shown in Figure 4;

❖ analysing the financial processes involved in pay-ments by check. Other forms of payment (creditcard, debit account, etc.) were not included in theBN scenarios.

From this starting point, the database of serviceelements was put into Business Network Navigator.A complete overview of the service elements is alsogiven in Delporte-Vermeiren (2003). Based on theprocess information gathered within all actors, therelevant production tasks could be specified at thelevel of the actor and the business network. Eventu-ally, this added up to a database in Business NetworkNavigator of all production elements and process mod-ules available in the business network.

Step 5: Modeling the Current BN DesignThe current situation for applying for a Europeanpatent at the time of the case study is as follows. Inthe current situation, it is the National Patent Officethat requests the patent application on behalf of theapplicant. The PTT Post transports the applicationforms and confirmation letters. The EPO handles andprocesses the application form. And ABN/AMROprocesses the check payment. The thick line indicatesthe dependencies of main tasks in this network.

The actual application process is built on a paper-based transaction process. The first step is the compo-sition of the application document. The applicants’representative (i.e. the NPO, which in this case is theDPO) prepares a document for the EPO. The processnearly always starts on a personal computer. Thesecond step is the authorization of the applicant’sdocument; the document is signed (unsigned docu-ments are invalid). The third step is security, whichis based on trust; the document is sealed in an envel-ope. The fourth step is transport of the document; itis entrusted to the postal services (i.e. PTT Post).Typical transportation delays are two or three days.The fifth step is receipt of the document; it is receivedat the EPO, opened, and distributed. The sixth stepis verification. This means checking the file for com-pleteness: authorization, signature, and date. Properverification is vital to protecting legal interests. Theseventh step is confirmation: receipt is acknowledgedso that the client has confirmation. This means yetanother letter. The eighth step is action; the EPOofficer processes the letter. This is done thousands oftimes per day. The ninth step is registration; everytransaction must be properly recorded in a file or ina database. This is done by scanning or indexing thephysical document.

Step 6: Ex post Margin Assessment of the Current BNDesignBased on the list of data collection activities, inputdata were gathered and entered into Business Net-work Navigator. BN margin and flexibility were thencomputed. During this process, key participants,

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Figure 3 Outline of the Business Network Design with Regard to the Actors Involved

Figure 4 Schematic of Process Module Network of Current BN Design (Order 5)

often business controllers, verified the collected dataand the data sources before they were entered inBusiness Network Navigator.

Step 7: Discussing the Performance Gaps in the MarginFlexibility of the Current BN DesignBased on the yearly volume of about 113,340 newpatent applications, the existing process representeda yearly loss of 3,513,540 over the entire businessnetwork. This was a primary driver for consideringa BN redesign. A second driver considered by theproject team was the creation of a digital customerinterface and on-line services.


Step 8: Identifying Possibilities for Improvement due toICTThe level of ICT enabling in the current BN designis illustrated in Table 3.

Analysis of the current BN network design shows:

❖ A ‘paper gap’: the exchange of documentsbetween the customer (applicant) and the EPO isdone by moving physical documents. There is noICT enabling between the DPO computer systemand the EPO computer system, although the appli-cation is written electronically.

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Table 3 Dimensions of ICT Enabling in the Current BN Design

Business network integration Business process integration

No integration Internal integration with own Integration with partner’s businessbusiness processes and processesapplications

DPO (as the applying customer) Stand-alone —applications forpatent writing

EPO Stand-alone Administrative applications —applications: integrated with financial

process application:CAESAR EASYCASEXPHOENIXDatimtex

PTT Post Stand-alone EDI EDI Integrated with other —internal processes, e.g.sales marketing, financeproduction via TVI network

❖ Within the EPO, there are automated island sol-utions for internal processes. Independent areas ofIT development include the following, forexample:❖ CAESAR for search reports with cited docu-

ments;❖ CASEX for substantive examiner communi-

cations;❖ EASY for on-line filing;❖ PHOENIX for administrative support;❖ Datimtex for publications.

❖ The handling fees are paid by check; therefore, thefinancial procedure is designed for manual checkprocessing instead of an electronic banking ser-vice, for example.

❖ There is no direct ICT-enabled access for the cus-tomer of the EPO, and integration of back-officesystems has low priority.

It was deemed possible to optimize the current BNdesign by converting the paper-based transactionprocess into an electronic transaction procedure andto provide direct access for applicants. However, theICT solution would have to:

❖ be built on existing EPO systems and use trilateralWorld Intellectual Property Organization (WIPO)and market standards;

❖ use a single technical infrastructure;❖ provide a single point of contact to the customer;❖ require a single secure environment;❖ require a single legal framework.

Step 9: Modeling Alternative BN DesignsThe current design was taken as the starting pointfor modeling an alternative BN design, here labeledas order 6. Eventually, the epoline concept wasdeveloped. It is built on EPO’s internal automationsystems, making everything face outwards and mak-ing secure public access via the Internet possible. The


epoline portal is a secure environment on the Inter-net that allows EPO customers to perform adminis-trative tasks and manage and retrieve patent infor-mation on-line and makes interaction with EPOeasier and faster. This system is designed to handlethe entire procedure, from filing to granting a patentapplication. With this electronic communication sys-tem, the mail-based transaction is converted into anelectronic procedure. In setting up the market test,the following issues were faced:

❖ The legal department of EPO provided a solutionto the requirement of ‘one single legal framework.’Eventually, the legal framework was based on thefollowing basic principles: (1) no paper backups,(2) valid signatures and dates, (3) specific time lim-its, (4) procedures based on the interpretation ofarticle 80 of the EPC, (5) separate and parallelimplementing rules, (6) consultation with nationaloffices, and (7) consideration of relevant EU legis-lation.

❖ The implementation team solved the issue of a sin-gle customer contact point in the following way:the interface with EPO is based on (1) an Internetbrowser interface, (2) a Website, (3) several Inter-net applications available from the Website, and(4) an EPO mailbox for sending and receivingcommunications. The hardware required is a stan-dard PC with the following specifications: Pen-tium II, 64 MB RAM, 2GB hard disk, an Internetconnection, a scanner to scan paper drawings,software for filing on-line, a smart card, and asmart card reader. The last two products wereoffered by the EPO to the participants of the mar-ket test.

❖ Security being the cornerstone of the epoline , thefollowing four principal requirements were met:

❖ Authentication: Smart cards uniquely identify

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customers. They are issued by trusted partiesand contain certificates.

❖ Non-repudiation: Digital signatures are builtinside smart cards.

❖ Confidentiality: Encryption offers secure linksbetween network partners.

❖ Accountability: All transactions are recordedand long-term storage is offered.

Based on the dependencies between the different mode-ling elements in this BN scenario, the process modulenetwork could be drawn as depicted in Figure 5.

The process module network describes the order inwhich the actors perform their tasks in filling theorder, while the paper-based transaction is replacedby a single, secure, electronic transaction through theepoline portal. In the electronic process, the docu-ment is composed electronically and does not requireany printing of a paper copy. The authorization ofthe document is also done electronically with a smartcard, which is comparable to a bankcard protectedwith a pin code. It contains a certificate that uniquelyidentifies an authorized person and is used to builda digital signature. A certifying authority (CA) suchas a bank, government office, or post office, couldissue one, and it works directly on the applicant’sPC. The document receives a digital signature via thesmart card, thereby guaranteeing integrity and auth-enticity. Initially, the EPO itself will act as epolinecertifying authority, and this authorization-certification procedure will be required for all securecommunication with the EPO.

The document is protected by being bundled in an

Figure 5 Schematic Process Module Network of the Redesign (Order 6)


electronic envelope, which is based on internationalstandards — the SGML Data Interchange Format(SDIF) used to bundle text and images for exchange.(XML is the emerging de facto market standard andwill eventually replace SGML for IP documents.)Other standards used are PKC# 7 or international digi-tal signature standards. The content is in TIFF (animage archive format) and portable document format(PDF), which is the market standard for documentsand guarantees that ‘what you see is what I sent.’Transportation of the digital document is done via theInternet and the virtual private network that connectsall users. The securest possible encryption is used byepoline and in all processes. Transportation is donevia PATNET, which connects all parties of the busi-ness network, such as customers (small and largecompanies), national patent offices, the American andJapanese patent offices, WIPO, and Internet banking.

The digital document is received at the EPO, opened,verified, and distributed completely automatically.During the verification process, the digital signatureon the digital document is compared with the EPOmaster certificate and is accepted or rejected. Confir-mation is also done electronically. No human actionis required. Receipt is acknowledged directly to users.The EPO officer processes the remaining letters. Regis-tration of all in-coming and outgoing communicationis archived electronically and no more scanning orindexing of the physical document is required.

Step 10: Ex ante Margin Assessment of the AlternativeBN DesignEx ante Margin Assessment of the RedesignBased on procedures similar to those discussed instep 6, the BN margin and flexibility level of the rede-

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sign could be assessed. Compared to the current BNdesign, the redesign shows:

❖ a cost reduction of approximately 35 per cent forthe entire BN;

❖ a revenue improvement of approximately 4.7 percent;

❖ a shift from a negative BN margin to a positive BNmargin (Extrapolating this to the yearly volume ofabout 113,340 new patent applications indicates ayearly profit of approximately 556,6700 insteadof a loss of 3,513,540 for the entire businessnetwork.);

❖ an agility improvement of approximately 76 percent;

❖ an increase in BN versatility (two new sets of SEs).

Step 11: Comparing the Various BN DesignsAs stated, the various BN designs can be comparedin terms of (1) the type of patent services requested,(2) the relationship between types of patent servicesand ICT-enabled processes required to perform theseservices, (3) the relative change in margin-flexibilitylevels, and (4) the distribution of expected benefitsamong the actors.

Benefits of ICT use in business network optimizationThe comparison of the mail channel scenario versusthe Internet channel, reveals the following:

❖ Change in service design: versatility and agility interms of new online products, instant feedbackand confirmation of receipt, faster delivery ofsearch and examination results, immediate accessto information on application status, etc.;

❖ Change in level of back-office integration within anactor: a higher level of back-office integration dueto ICT is realized at the EPO in filling order 6.

❖ Change in level of front-office integration betweenactors: a higher level of front-office integration dueto ICT is realized between the EPO and the DPO(applicant) in order 6;

❖ Change in level of back-office integration betweenactors: a higher level of back-office integration dueto ICT is realized between the CA and the DPO(applicant) and between the EPO and DPO(applicant) in order 6;

❖ Change in roles of the actors: the entry of a new actor,i.e. the certifying authority.

Step 12: Discussion of ResultsThe margin results of the two BN designs are com-pared. The Web-enabled redesign of the process ofapplying for a European patent turned the margincontribution from a negative into a positive result forthe entire business network. The distribution of theBN margin improvement among actors reveals that:

❖ in the current design (order 5), only the EPO mar-gin is positive, while the margins for all remainingactors are negative;


❖ in the Web-enabled redesign, all the current BNactors benefit from the margin improvement.

Step 13: Actual Decision MakingThe EPO decided to extend the market test of epo-line from 25 participants to 1200 by the end ofAugust 2001 and to continue the promotion of Web-based services both internally and externally. Basedon the insights gained into the functioning of theexisting business network, the project team discussedthe impact of this decision on the individual actors:

❖ One would expect the EPO to further increase thedevelopment of new on-line services. However,one could argue whether the issuing of smartcards and the role of EPO as electronic documentfiling centre in the redesign scenario should beregarded as a core activity or whether it would bebetter outsourced.

❖ One would expect that the Dutch (i.e., national)Patent Offices would start questioning their futurebusiness survival. With the creation of direct Inter-net-enabled access to its customers, EPO couldeasily provide (software based) services similar tothose now provided by the national patent offices.Together with a broader acceptance of digital sig-natures, the rise of Internet patent brokers, etc., thebasis of competition within the entire intellectualproperty industry is due for great changes.

❖ One would advise PTT Post to reconsider the EPOas an interesting leading customer for future elec-tronic business because of the document-intensivecharacter of its business processes. Another busi-ness opportunity lies in a potential role for PTTPost as certifying authority.

❖ One would advise ABN/AMRO to generate morecustomized financial solutions to support theEPO’s financial transaction procedures.

Step 14: Implementation of Decision MakingIn February 2002, 900 on-line patents had alreadybeen filed via epoline and at the end of 2002, 2500patents (EPO, 2002). The EPO continues to look forother ways to take full advantages of Web technologyto rejuvenate their core business applications by min-imizing the impact on established systems and opti-mizing costs. They have adopted ‘Web process inte-gration’ (Gartner, 2001, p. 7) as a strategy forintegrating the Web with legacy applications toextend their life cycles by also reusing them fordeveloping new composite applications and Web ser-vices. Web process integration provides more advan-tages than simple ‘Web-ification’ (Gartner, 2001, p.4), which renders a terminal-oriented user interfacein a ‘Web form’ while leaving the presentation of theapplication unchanged, although it can add somebeautification, making it practical to deploy theapplication to additional, non-skilled users. Web pro-cess integration consolidates the presentation of mul-tiple applications into a single interface, supportingthe integration of specific business processes (bothinteractive and real-time). It looks like Web-ification

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but involves more complex infrastructure and devel-opment efforts.

Lessons Learned

Although the field research was limited to a singlecase, some interesting observations can be maderegarding the use of the 14-step research protocol.

The Use of a Reengineering Agenda and Involvement ofSenior ManagementIn the case study, senior management of all the actorsinvolved mandated a reengineering agenda. Giventhe outcome of the case, one could argue that the useof a mandated reengineering agenda and involve-ment of senior BN management are critical to the suc-cess of ICT-enabled BN reengineering. This approachsets the direction for the design of the inter-organizational relationship and fosters realisticexpectations within the business network. The spon-sorship of senior management empowers the rede-sign team and facilitates the allocation of the rightresources (both financial and human).

Embodying the Redesign Objectives in the RewardSystems of the Responsible ManagersIn the case study, empirical findings with respect toemployee incentives were that:

❖ The responsible redesign managers at the EPO andNPO were not focused on EBIT; their reward sys-tem was based on (team) performance, not on pos-ition.

❖ The director of the ABN/AMRO office (located in-house at EPO) was focused on EBIT, as in the tra-ditional ‘branch-centred model.’ Therefore, he per-sonally would not benefit when EPO switchedfully to an electronic channel.

Therefore, it can be argued that even when BN rede-sign starts with jointly defined redesign objectives atthe strategic management level, realizing the rede-sign objective can be hindered if employee incentivesat the tactical and operational (actor) level are not inline. Employee incentives at the actor level shouldsupport — and not conflict with — the drive forimproving BN performance. The findings support theclaim that the ultimate success of reengineeringdepends on the people who do it and on how wellthey can be motivated to be creative and to applytheir detailed knowledge to the redesign of businessprocesses. This claim is also supported by otherauthors. Today, it is becoming more important to getinputs from all facets of the organization since no sin-gle group, supplier, or department can be expectedto know everything (Luther, 1997). One issue that isbecoming more important is that not only everyonein an organization should know what activity he orshe is performing or engaged in, but everyone —including the supply chain — should know how


these activities contribute to the big picture (Liker etal., 1995) and should be rewarded accordingly.

Training in the Redesign and Assessment MethodIn the case study, the redesign manager initiallylacked the necessary customer process informationand tools for designing the processes along the part-nership. The research method and tools solved this,but training was required. Training at an early stagein the redesign project seems to have several advan-tages. For example, specifying the redesign variablesavailable in the business network:

❖ creates a common language between product-oriented and process-oriented managers and ther-eby facilitates understanding between the twodisciplines;

❖ permits the use of modularity principles in thedesign of product, process, and supply chain andthereby speeds up the creative process of finding‘Neue Kombinationen.’ The debates with the rede-sign teams on product and process design seemedto be of great value;

❖ guides the data-collection process at the actor levelwhen customer-process information at the BNlevel is not available.

Differences in Costing Methods among Actors in theBusiness NetworkIn the second section, it was argued that the existenceof a business network depends on the choice of thecoordination mechanism for business transactions. Soif a business network exists, it is because the BNactors believe that these inter-organizational relation-ships are the most appropriate mechanisms for maxi-mizing the margins associated with BN customertransactions. Therefore, the hidden assumption isthat all actors in the business network work with acosting method that is designed and equipped foranalysing customer transactions, such as methods foranalysing customer costing and customer profitabil-ity (Kaplan and Cooper, 1998). All the actorsinvolved in the case study research claimed to be cus-tomer driven. They all claimed to work with accurateactivity-costing systems to assign indirect and directcosts to activities by using multiple cost drivers.Aside from the fact that the interpretation andexchange of costing information was often charac-terized by individual differences, it was revealed thatparadoxically, their current management accountingsystems did not provide cost or profitability meas-ures for individual customer transactions, let aloneprocesses for filling customer orders through thebusiness network. In their costing systems, most costobjects included products and departments insteadof customers or order-filling processes. So why didn’tthey use a commonly agreed-upon process for cus-tomer costing? Was it because they feared that ‘open-book calculations’ of customer orders would weakentheir negotiating power? Was it lack of trust or wasit, indeed, a lack of knowledge about an accurateassessment method?

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In adopting an accounting system that recognizescustomer cost hierarchies, BN managers can deter-mine the cost of a customer through the entire busi-ness network. They can also identify which cus-tomers and actors are potential value creators ordestroyers. With this insight, managers can developredesign strategies and plans for improving pro-cesses and renewing products and services, focusingdirectly on improving the overall profitability of thebusiness network. They can either bring existing cus-tomers or actors into profitability or they can replacethem with others more likely to be profitable. Thisincludes the ability to change levels of activity (andtherefore resources) in response to changes in cus-tomer demand and to measure the effectiveness ofbusiness network processes. Reallocating resources inthe business network from the ‘losing customers’ tothe ‘gaining customers’ can improve the value cre-ation of the business network quite dramatically.Increasingly, companies are going to menu-basedpricing where the costs to the customer are determ-ined not only by volume and mix of products pur-chased, but also by the method of delivery and ser-vice to the customer. If separate prices are quoted foreach activity, the assumption is that customers selectthose activities that they view as cost effective. Byreducing the cost of each activity, the profitability ofcustomers using those activities should increase.

Differences in Pricing Methods among Actors in theBusiness NetworkAll actors claimed to work with a cost-based pluspricing method for the current product portfolio.Cost-based plus pricing (Kotler, 1988) is a pricingmodel where pricing is based on the cost of a pro-duct. The procedure is used in estimating all variablecosts, a considerable part of the relevant fixed costs,and in adding a ‘normal’ profit margin.

The reasons given for using this method are the fol-lowing:

❖ The level of segmentation: segmenting the marketinto customer segments increases segmentationcosts and does not add value for the customer;therefore, standard products are distributed atstandard prices (occasionally minus standarddiscounts);

❖ The lack of a method to measure real customervalue.

This cost-based plus pricing method is a ‘safe’method — if the estimation of costs is done correctly,the revenues of the company are more or lesssecured. However, this method has several short-comings: (1) an allocation problem can arise whenseveral products share certain fixed costs, (2) justifi-cation for the profit margin used is not always clear,(3) this method does not try to measure fundamentalmarket response. It often starts from an incorrectpremise about the competitive behavior and coststructure of the competitors (which are often con-


sidered to be ‘identical’). Therefore, in the redesignscenarios with joint product development in the busi-ness network (order 6), a more value-based pricingmodel was used . This model was used to price thenew electronic services and the on-line services beingdeveloped. Various arguments for this pricing tacticwere given:

❖ the higher degree of product modularity enabledcustomer-based pricing in the case of document-input services and on-line patent applications;

❖ so-called ‘lead-user’ pricing in the case of the CAservices (key-mail certificate) where PTT Postworked closely with the Postbank in an early stageof product development.

The modular design of these new ICT-enabled ser-vices is better adapted to meeting different customerrequirements and enables customer-based pricing byusing menu pricing for individual components.

Conclusions and Recommendations

The research reported here originated from the desireto make ex ante assessments of margin related to ICTadoption in business networks, along with its distri-bution among the actors involved. Our first researchobjective was to develop a reliable, formal methodfor the ex ante assessment of the effect of ICT adop-tion on business network margin.

Based on the research findings, one may concludethat yes, it is indeed possible to develop a methodfor ex ante assessment of margin to be applied in ICT-enabled redesign of business networks — specifi-cally, a method that can assess the relative changesin margin for the business actors involved. How didwe proceed to develop such a method?

First, the literature on business networks and on ICT-enabled BN redesign methods and tools wasreviewed. This review revealed that Porter’s (1985)traditional view of the value chain is inadequate forsuch an assessment. A method is required that cangive a more detailed assessment on a variety of cri-teria, or key performance indicators: (1) costreduction, (2) revenue generation, and (3) increasedflexibility. The modular redesign method (MND),originally developed by Hoogeweegen (1997) pro-vided a sound basis for assessing BN rearrangementsmade possible through the use of ICT. Therefore, thismethod was taken as a starting point. It does not,however, address the concept of ‘margin’ as anassessment criterion, so this needed to be developedand tested. Therefore, a research model wasdeveloped with three basic constructs: (1) ICT-enabled modularity, (2) margin-improved flexibility,and (3) redistribution. The MND method does notprovide a methodology to apply the method in real-life situations, either; therefore, a 14-step research

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protocol was developed in chapter 4, together witha related decision support system (DSS), named theBusiness Network Navigator. The research protocol,and DSS were then tested in a real-life situation.These research tools allowed the development of amethod for BN redesign and assessment that can beused in real-time situations. Its strength lies in thecombination of strategic analysis of the business net-work with a very detailed operational assessment,thereby avoiding confusion and lack of definitionabout the precise objectives of the redesign and therange of applications of the method. The more themethod is used within a specific business network,the more operational (process) information caneventually be made available to the actors on a dailybasis. Its weakness, however, lies in its dependenceon reliable costing and revenue data and the fact thatthe method is cumbersome to use.

The second research objective was to analyse theability of the method to support decision-making inregard to the adoption of ICT in a business network.The use of the assessment method impacts decision-making in the way that:

❖ it quantifies the contribution to business perform-ance improvement of new ICT applications in thebusiness network;

❖ it allows the classification of different redesignscenarios in terms of the estimated margin-flexibility improvement at the business networklevel and its redistribution among actors.

However, the case study findings demonstrate thatthe use of the method as such will not automaticallylead to actual ICT implementation of a specific rede-sign. One dominant precondition to the acceptanceof the results seems to be that the use of structuredmethods as such has to be inhibited in the character-istics of the different actors. Moreover is there a dif-ference in use of the method as an instrument foranalysis or for implementation?

Although the results obtained may be useful to scien-tific researchers and redesign managers, the researchis nevertheless subject to a number of limitations. Theresearch followed an inductive – deductive researchcycle in which literature review and multiple embed-ded case studies were used to test the preliminarytheory building. According to Yin (1994) such casestudies can be generalized for theoretical prop-ositions but not for populations or universes. Werealize that since only one case study in the serviceindustry was investigated, one may speak only of afirst validation of the research method. For a largervalidation, a multi-client research comparison wouldbe required.

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Vervest, P.H.M. and Dunn, A. (2000) How to Win the Customerin the Digital World. Springer-Verlag, Berlin.

DOMINIQUE DELPORTE- PETER VERVEST, ErasmusVERMEIREN, Erasmus Uni- University, Rotterdam School ofversity, Rotterdam School of Management, Department ofManagement, Department of Decision and InformationDecision and Information Sciences, P.O. Box 1738, 3000Sciences, P.O. Box 1738, 3000 DR Rotterdam, The Netherlands.DR Rotterdam, The Netherlands. E-mail: [email protected]: ddelporte.freeler.nl

Peter H.M. Vervest is ProfessorDr Dominique Delporte-Ver- of Business Telecommunicationsmeiren is Managing Partner of at Erasmus University and Part-DMC BV, a management con- ner in D-Age, counsellors and

sulting firm that focuses on ICT-enabled redesign pro- investment managers in digital age companies. Hisjects. She has long experience in profit and non-profit research focuses on enabling technologies for intelligentorganizations. business networks.

ERIC VAN HECK, ErasmusUniversity, Rotterdam School ofManagement, Department ofDecision and InformationSciences, P.O. Box 1738, 3000DR Rotterdam, The Netherlands.E-mail: [email protected]

Eric van Heck is Professor ofElectronic Markets at ErasmusUniversity. His research concen-trates on electronic markets and

IT-enabled business networks.


Yin, R.K. (1994) Case Study Research: Design and Methods (2ndedn). Sage, Thousands Oaks, CA.

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