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Identifying E-Business Options
Figure 2. Organization as an open system
Organization Information communication
transactions
Outside world
(e.g., customers, suppliers, labor unions, government agencies, banks, interest groups, general public)
stakeholders. It is relevant to distinguish between business partners and other external stakeholders because the communication mode between the organization and these two kinds of stakehold-ers groups is different (see also the paragraph on communication modes). With business partners, an organization has both a transactional (including monetary) exchange relation and an informational and communicational relation. Business partners include customers, suppliers, banks, insurance companies, shareholders, and governments (e.g., concerning taxes, licenses, and regulations).
With other external stakeholders, organiza-tions only have an informational or communica-
respect to new stakeholders. New stakeholders can be new customers, new suppliers, new banks, or even new governments. New customers can be reached by entering new markets (market exten-sion) or by disintermediating current intermediar-LHVDQGLQWKLVZD\WDUJHWLQJ¿QDOFRQVXPHUV The same applies to suppliers. By using electronic marketplaces, organizations can broaden their suppliers’ base or disintermediate backward to replace suppliers by the initial producers of the supplies.
Some relevant questions with respect to stake-holder statuses are:
tional relation. Examples are the press, special interest groups, (e.g., environmental groups), and the general public. The number of external stakeholders groups is organization-dependent: the user of our methodology has to map out and
• Could the organization reach new business partners by using the Internet?
• Could the organization reach new other stakeholders by using the Internet?
group all external stakeholders who may be rel-evant to the analysis.
Some relevant questions with respect to stake-holders are:
Dimension #3: Channel Strategies
In this article we distinguish between Internet channels and non-Internet channels (although our PHWKRGRORJ\DOVRDOORZVIXUWKHUUH¿QHPHQWV
• What are the current groups of business partners?
• What are the current groups of other stake-holders?
Organizations can choose to use the Internet as an exclusive medium for communication exchange purposes with one or more (groups of) stakeholders. This is called a single-channel
Dimension #2: Stakeholder Statuses
We distinguish between two statuses, namely current and new. By using the Internet, an orga-nization can transform or extend its business with
Internet strategy. The alternative is to combine the Internet with non-Internet channels. This is called a multi-channel strategy.
Some relevant questions with respect to chan-nel strategies are:
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Identifying E-Business Options
• Can the organization use the Internet as a single-channel strategy to reach a current group of business partners?
• Can the organization use the Internet as an additional-channel strategy to reach a new group of business partners?
• Can the organization use the Internet as a
:KDWDUHWKHFXUUHQWRUQHZ¿QDOSURGXFWV and services and could the Internet be used to facilitate the buying or selling process?
• What are the current or new inputs and could the Internet be used to facilitate the buying process?
single-channel strategy to reach a current group of current other stakeholders?
Dimension #4: Communication Modes
We distinguish among informational, interac-tional, andtransactional communication modes. Informational means a one-sided provision of information, (e.g., by putting a product catalogue on the Internet). Interactional means a two-sided information exchange, (e.g., by enabling custom-ers to ask questions). Transactional means the exchange of products or services or the agreement
Dimension #6:
Product (and Service) Statuses
We distinguish between two statuses, namelycur-rent and new. Organizations can use the Internet to buy or sell their current products and services, but they can also transform or extend business by buying or marketing new products or new services on the Internet. Many products can be extended or transformed by using the Internet.
A relevant question with respect to product statuses is:
about such an exchange, (e.g., to order a product and to pay over the Internet). Interactional mode includes informational mode; transactional mode includes interactional and, hence also informa-tional mode (Grover & Ramanlal, 2004).
A relevant question with respect to commu-
:KDWDUHSRVVLEOHQHZ¿QDOSURGXFWVVHU-vices and inputs?
• Could the Internet be used to facilitate the buying or selling process of new products or services?
nication modes is: Examples of a Newspaper Publisher
• Could the organization use the Internet to provide information, to exchange informa-tion or to engage in transactions?
A publisher of a regional newspaper has many options with regard to using the Internet. We will use the different dimensions of our methodology
Dimension #5: Product (and Service) Groups
to describe four of these options. These options are also shown in Table 2.
Organizations can use the Internet to buy or to market their products and/or services. The number of product/service groups is organization-depen-dent: the user of our methodology has to map out and to group all current products and services that may be relevant to the analysis.
Some relevant questions with respect to prod-uct/service groups are:
• Example 1: The publisher may choose to put the contents of (a part of) the newspaper on the Internet as an additional service for his current subscribers (extension of current product to current customers, multi-chan-nel).
• Example 2: The publisher may choose to put the contents of (a part of) the newspaper on the Internet as a service extension to his
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Identifying E-Business Options
Table 1. Examples of some e-business options of a newspaper publisher
Example nr
Stakeholders Groups and statuses
Channel strategies Communication Product and Product and modes service groups service statuses
Dimension # 1, # 2 Dimension #3 Dimension #4 Dimension #5 Dimension #6
1 Current subscribers
2 Current subscribers and
New clients
Internet and traditional Information newspaper = multichannel
Internet and traditional Information newspaper = multichannel
Content of current newspaper Content of current newspaper
Current
Current
3 New customers
4 Current subscribers and
New customers
Internet single-channel
Internet and traditional newspaper = Multichannel
Transaction
Interaction for current subscribers, transaction for Internet/only customers
Newspaper New
Current New newspaper,
adapted
current products for current subscribers as well as new clients.
• Example 3: The publisher may choose to develop a new single-channel Internet news-paper, using special Internet features (e.g., interactivity, news on demand) to reach new customers (new product, new customers, single-channel Internet).
• Example 4: The publisher may choose to develop an Internet newspaper, based on a current newspaper, using special Internet features as a free new service for current subscribers and a chargeable service for new Internet customers (the English newspaper The Economist makes use of this option).
Generating Potential Options
In order to systematically generate potential e-business options once the (company-dependent) elements of all dimensions are determined, a closer look is required at the structure of the de-scription of the potential options. In our view, the following general format can be used to describe all potential options:
options concerning with using a
To illustrate the different dimensions of an e-business option, the e-business options in this example are generated in an arbitrary way. Many other options are also possible. In the next sections we will show how options can be generated and ordered in a systematic manner.
All possible combinations of values applied to the six variables in the general format then make up the complete set of potential options. If p is the number of product/service groups and s is the num-ber of stakeholders groups that are distinguished by the organization concerned, this will lead to 2 * 2 * 2 * 3 * p * s (i.e., 24 * p * s) potential op-tions. So it is obvious that these potential options can be generated in a systematic manner, namely by straightforwardly combining each possible
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Identifying E-Business Options
Table 2. Dimensions of e-business options Ordering Potential Options
Dimension
Stakeholders groups Product groups Channel strategies Communication modes Stakeholder statuses Product statuses
Dimension order
6 5
1 4 2 3
The potential options can be ordered by adding the ordered dimensions to the ordered elements within each dimension. The ordering of the di-mensions and their elements implicitly implies an ordering of the generated options. The next example should make this clear.
Example
element with each of the six dimensions. Each combination results in a potential option.
Rather than writing out these 24 * p * s potential options by hand, they can also be generated by means of a tool. The tool can consist of a data-base with a Dimensions table containing the six dimensions and an Elements table containing all (2 + 2 + 2 + 3 + p + s) elements per dimension. A sample content of such a database will be shown in the next section. Furthermore, the database has to have a reporting facility which, based on the joining of these two tables, can generate the
Suppose that the publisher distinguishes three general product groups (Physical goods, Digital SURGXFWVDQG6HUYLFHVDVZHOODV¿YHVWDNHKROG-ers groups (Customers, Suppliers, Shareholders, Banks, and Governments). After choosing one particular way of ordering the dimensions and the elements within each dimension, the contents of our two database tables could be as shown in Tables 2 and 3.
7KLVPHDQVWKDWLQWKLVH[DPSOHZHZLOO¿UVW consider:
24 * p * s descriptions of the potential options in our general format.
• Informational options concerning current digital products for current customers using a single-channel Internet strategy
Table 3. Elements of e-business options
Element
Customers Suppliers Shareholders Banks Governments Physical goods Digital products Services
Single-channel Internet strategy
Multi-channel strategy Informational Interactional Transactional
Current New Current New
Dimension
Stakeholders groups Stakeholders groups Stakeholders groups Stakeholders groups Stakeholders groups Product groups Product groups Product groups Channel strategies
Channel strategies Communication modes Communication modes Communication modes Stakeholder statuses Stakeholder statuses Product statuses Product statuses
Elements order 1 2 3 4 5 3 1 2 1
2 1 2 3 1 2 1 2
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Identifying E-Business Options
• Then, similar options for the other stakehold-ers groups (4 groups in this case),
• then, similar options for the other product groups (2 groups in this case),
• then, similar options for the other commu-nication modes (2 modes in this case),
• then, similar options for the new products, • then, similar options for the new stakehold-
ers, and,
¿QDOO\VLPLODURSWLRQVIRUWKHRWKHUFKDQQHO strategy.
• We will obtain the descriptions of potential options by simply placing the respective elements into the general format that we introduced earlier.
• In our example, this generates 360 potential options (namely, 5 * 3 * 3 * 2 * 2 * 2).
Different criteria can be used for ordering the
Once the list of potential options has been generated and ordered, a list of valid options has to be composed. The difference between a poten-tial and a valid option is determined by whether a potential option is possible. This means that impossibilities have to be eliminated from the list. To give an example: it is impossible to deliver a bottle of orange juice over the Internet. So deliv-ering orange juice over the Internet is a potential option, but not a valid one. Ordering orange juice over the Internet is a potential option as well as a valid one, since it is actually possible.
However, not all (valid) options will make sense from a business perspective. This means that options have to be assessed, often by using a range of criteria. So once the list of valid options has been acquired, the next stage of assessment can begin (see Figure 2).
different elements. One criterion may be to priori-tize from current to new. This means that potential options, including current stakeholders, current products, and multi-channel strategies, appear at a higher place on the list than potential options
Tool Support
The approach as described in this article will be supported by a tool that enables one to easily:
including new stakeholders, new products and single-channel strategies. This is in accordance with Straub et al. (2001) who state that Internet DSSOLFDWLRQV WHQG WR PRYH IURP ¿UVWRUGHU WR second-order and then to third-order effects (see the background section). If a company chooses WRIROORZWKLVSDWWHUQWKHOLVWZLOO¿UVWVXJJHVW the less risky options.
• Record the product/service groups and the stakeholders groups (organization-depen-dent);
• Generate the potential e-business options; and
• Order the e-business options.
The tool will consist of a database, which
Another approach may be to look for a contains the proper: VWUDWHJLF¿W,IDFRPSDQ\LQWHQGVWRUHDFKQHZ
groups of customers, it is reasonable to give new stakeholders groups a higher ranking. The same applies when an organization intends to use the Internet to launch new (Internet-based) products or services. In that case, these new products and services should get a higher priority. If the com-SDQ\GHSHQGHQWHOHPHQWVDUHLGHQWL¿HGLQWKH right way, the list will, in any case, provide all potential options.
• Data structures (tables) already containing all organization-independent data;
• Forms to enter and update the organization-dependent data (i.e., the product/service groups and the stakeholders groups); and
• Reporting facility to generate and order the potential e-business options.
E-business consultants, managers, and busi-
ness analysts can use this tool to support the
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