Week 1 - 13 questions

Question 1

Explain business networking

Answer 1

Business Networking = The management of IT-enabled relationships between internal and external business partners.

Question 2

Explain business network

Answer 2

Business network = A business network is a set of more than two firms that provides services to customers and uses services from suppliers to operate as ‘one firm’ that is owned by different owners and controlled by different ‘operators’/management teams.

Question 3

What are the 5 phases towards business networking

Answer 3

Phase 1 (1970): The aim of computerizing a single island function such as invoicing;

Phase 2 (1980): The computerization of functional area’s such as production, financial accounting;

Phase 3 (1990): The development of systems for ERP enabled companies to implement integrated processes internally from customer to customer, such as e.g. order processing.

Phase 4 (1990): Concurrently with the implementation of ERP systems, some enterprises went for link-ups with their customers or suppliers. Individual 1:1 integration of cross-enterprise processes

Phase 5 (1990-2005): Here we see a new stage in customer orientation. Following Reverse Engineering ideas, companies will adapt and be built to suit customer needs and processes. The Internet plays a key role in improving these n:m networking capabilities, since it provides a standardized technological infrastructure.

Question 4

Explain business bus

Answer 4

Business bus = The standardized networking infrastructure. It forms the core of the business collaboration infrastructure which eventually will evolve from marketplaces. It is the term used to describe the totality of technical, applications and business standard on which software solutions, electronic services etc. are based.

Question 5

Explain networkability

Answer 5

Networkability = The ability to cooperate internally as well as externally. Networkability refers to (a) resources, such as employees, managers and information systems, (b) business processes, e.g. the sales process, and (c) business units, e.g. an enterprise in a supply chain. Networkability describes the ability to rapidly establish an efficient business relationship.

Question 6

Most important rules within the Osterle framework of the business model: Explain Coverage

Answer 6

Coverage: Networking makes it possible to offer all products and services for a customer process on a coordinated basis and from a single source.

Question 7

Most important rules within the Osterle framework of the business model: Explain Partnering

Answer 7

Partnering: Cooperation is not limited to a shopping relationship but becomes true collaboration, i.e. the processes work together. The supplier develops detailed customer profiles from the gathered data from different processes. Partnering allows to partner the data and can lead to customer lock-in and thus create a high entry barrier for competitors.

Question 8

Most important rules within the Osterle framework of the business model: Explain Critical mass of customers and suppliers

Answer 8

Critical mass of customers and suppliers: Organizations will try to gain a maximum market share. Customers prefer organizations who can offer the most comprehensive range of products and services, and on the other, the biggest selection of suppliers for each category of product and service. Suppliers will concentrate on organizations who can provide them access to the largest number of customers.

Question 9

Most important rules within the Osterle framework of the business model: Explain position in the business network

Answer 9

Position in the business network: Organizations must find their position in the business network and apply the rules indicated above to their customers, products, services and skills. Each company must analyze the possible business networks and try to establish a position of maximum influence in the networks offering the greatest potential. Early entrance in a business network improves the chances of assuming a dominant role.

Question 10

Most important rules within the Osterle framework of the business model: Explain Focusing

Answer 10

Focusing: Networking promotes specialization. A process of disassembly and reassembly is initiated in which companies consider each of their processes and decide whether it is better to operate them themselves or to buy them in.

Question 11

Most important rules within the Osterle framework of the business model: Explain process efficiency

Answer 11

Process efficiency: If no monopoly situations arise which cut out the market, the Internet will always promote the selection and combination of the most efficient processes.

Question 12

Most important rules within the Osterle framework of the business model: Explain networkability

Answer 12

Networkability: Business relationships on the internet are almost exclusively 1:n relations. A supplier has a relationship with several customers or a customer communicates with several suppliers. One company sets the rules and formats, the customer or suppliers have to accept or leave it. Best case scenario in b2b is a m:n relationship when multiple organizations can communicate with the same standards.

Question 13

Most important rules within the Osterle framework of the business model: Explain change management

Answer 13

Change management: Business must sharpen their skill in recognizing developments and above all-in mastering change. Installing change management helps in the systematic analysis of factors determining the success of change – with the aid of value drivers – and in controlling them by means of KPI’s.

Question 14

The seven fundamental trends in business transformations: explain enterprise resource planning

Answer 14

Enterprise resource planning: the operational execution of business, runs almost imperceptibly in the background. Integrated applications for administration as well as for product development and technology make it possible to concentrate on business rather than on administration.

Question 15

The seven fundamental trends in business transformations: explain Knowledge management

Answer 15

Knowledge management: supplies each task within a process with the necessary knowledge about customers, competitors, products, etc. and above all about the process itself.

Question 16

The seven fundamental trends in business transformations: explain smart appliances

Answer 16

Smart appliances: take information processing to the point of action. Traffic information is supplied via the satellite navigation system (GPS) to the motorist, point of sale information from the cash register to the product manufacturer and machine faults via sensors to the service engineer.

Question 17

The seven fundamental trends in business transformations: explain business networking

Answer 17

Business Networking: makes collaboration between two companies so simple that they appear to be one enterprise. Information on sales of the end product is immediately available to all the companies in the supply chain.

Question 18

The seven fundamental trends in business transformations: explain electronic services

Answer 18

Many subprocesses which companies still operate individually at the moment will be available from the Net as electronic services. One example could be customer profiling. In addition to the supplier, a third party online-database provider and the customer him or herself can take over the responsibility of his or her profile and offer it via an electronic service.

Question 19

The seven fundamental trends in business transformations: explain customer processes

Answer 19

Companies will not simply be selling products or services but will be supporting entire customer processes. Transport businesses will take on the logistics process, doctors will support the whole therapy process and insurance companies will handle the claim processing instead of the customer.

Question 20

The seven fundamental trends in business transformations: explain value management

Answer 20

Corporate management will no longer merely focus on financial results but also on factors contributing to these results. Financial management will become value management which keeps an eye on key performance indicators for the success of the business.

Question 21

Electronic business networks are a particular form of business networks and three types can be distinguished; Name & explain the three types

Answer 21

Stable network: a long-term stable relationship between suppliers, producers, and distributors. It is designed to serve a mostly predictable market by linking together independently owned specialised assets along with a given product or service value chain.

Internal network: To create a market inside a company. Organizational units buy and sell goods and services among themselves at prices established in the open market.

Dynamic network: Components along the value chain are coupled contractually for perhaps a single project or product and then decoupled to be part of a new value chain for the next business venture.

Question 22

Explain Value-added partnerships

Answer 22

Is a set of independent companies (or business units in one organisation) that work closely together to manage the flow of goods and services along the entire value-added chain.

Question 23

Name the 6 parts of the NEFETI research model

Answer 23

(1) The strategic drivers and incentives for networking: This denotes the motives and objectives of the stakeholders and organisations involved in the network (drivers can be regarded as value propositions by: commercial goals, improving internal quality, efficiency etc.);
(2) Enabling conditions for networking: The conditions that stimulated or enabled the emergence and growth of the network (for instance the presence of a champion, previous experience with relevant technologies, the absence or presence of network standards, or a specific mix of these conditions);
(3) Design of the network organisation: e.g., the participants in the network, their business relationships, the structure of the network, i.e. a chain, a star, a dyad;
(4) Functioning of the network organisation: The way the network organisation functions, how the nodes in the network cooperate in inter- and intra-organisational processes, how transactions are processed through the network;
(5) ICT infrastructure of the network organisation;
(6) Performance of the network organisation.

Question 24

What are the six levels of IT-induced business transformation - from low to high impact?

Answer 24

1. Localised exploitation
2. Internal integration
3. Business process redesign
4. Business network integration
5. Business network redesign
6. Business scope redefinition

Question 25

What are the network designs for the emergence of standards?

Answer 25

➢ One strong supervisor in the network that can determine communication standards and systems. ➢ A strong actor -not having a supervisor role- in the network determines several standards for communication and systems. ➢ A group of actors in the network jointly develops standards for processing and communication in the network.

Question 26

What is benchmarking in a business network?

Answer 26

In business networks, benchmarking refers to the process of assessing and comparing the performance of network designs (structure and process) and network outcomes (for business and IT performance). Business performance can be measured, for instance, as quality of care, cost of care, or in generic performance metrics for finance, internal and external processes, customers, markets, innovation, growth and satisfaction. Different metrics and values apply for different actors in the network and vary per level. Technical performance is also determined per stakeholder in the network, using metrics like contribution to the business, business orientation of the technologies, operational excellence, innovation/ development, organisation and satisfaction.

Question 27

What is the conclusion of the Smits (2002) NEFETI article?

Answer 27

We observe that improving the IT-architecture in a network organisation does not automatically lead to improved business performance, nor does it necessarily lead to growth of the business network. The impact of changing the IT-architecture on business (network) performance depends on the business network design and process design in the network, its firms and its business units. Only if power is concentrated in one stakeholder (in the network), it can be sufficient to decide on network design and IT-architecture from the perspective of this one organisation (node) in the network. However, most cases show that multiple stakeholders play a role in the network decision making (network governance) and, ultimately, to enhance business network performance.

Question 28

Explain Smartness of a network

Answer 28

Smartness = the network of cooperating businesses can create better results than other, less smart, business networks or other forms of business arrangement.

Question 29

Why is multiasistencia a smart business network?

Answer 29

The Multiasistencia case shows how the smart business network approach with embedded business processes leads to substantial business advantages, demonstrating the importance of information sharing in the business network and the design and organizational dynamics of the infrastructure.

Question 30

Explain swarm intelligence

Answer 30

the emergence of seemingly intelligent or, perhaps, smart, behavior from many individuals. Swarm intelligence studies collective behavior in self-organizing systems populated by simple individuals interacting locally with one another and with their environment without centralized control. However, in many cases, despite being unpredictable, such swarms are able to exhibit impressive capabilities for problem-solving to, for example, seek food or respond to an unforeseen problem.

Question 31

What are bridging positions in a network?

Answer 31

Bridging positions areidentified as where the network participants link through a focal actor who holds the bridge. This structure brings information and control benefits (a central player) but also encourages the dependent actors to find alternative routes, for example, to disintermediate the bridger.

Question 32

Explain network horizon

Answer 32

Network horizon = the number of nodes an actor can “see” from a specific position in the network. With a larger network horizon, a company can take a more advantageous network position depending on the distribution of the network horizons across all actors and up to a certain saturation point.

Question 33

Explain pick, plug and play

Answer 33

The key characteristics of a smart business network are that it has the ability to **“rapidly pick, plug, and play”** business processes to configure rapidly to meet a specific objective. for example, to react to a customer order or unexpected situation. One might regard a smart business network as an expectant web of participants ready to jump into action (pick) and combine rapidly (plug) to meet the requirements of a specific situation (play).

Question 34

Eplain smart business networking

Answer 34

Smart Business Networking consists of a set of inter-organizational relationships between a focal actor and independent external actors who are closely linked and are working together to create value for the customer.

Question 35

Explain smart network

Answer 35

Smart Network = a network that wins (outperforms). Being smart is a new business network approach where the network provides complex services and is demand-driven with a distributed control and sharing of Information & IT infrastructure.

Question 36

Explain connecting and disconnecting in terms of plug & play

Answer 36

**Connecting** is investing in ‘becoming part of a network’. This means implementing/creating resources that enable plug & play and may take weeks or months. **Disconnecting** is ‘removing resources, connections, processes, activities (only those that are no longer useful). **After such investments,** the firm can **plug & play** in the network processes (only) if required by a customer request and if allocated by a network orchestrator (business logic) Once the appropriate participants are found and the connection has been established, the process of “play”-performing the business transaction- can begin. While the ability to quick connect has received attention, the capability to quickly disconnect requires more decision rules and logic with regard to connection and disconnection will be crucial a component for the success of the business network.

Question 37

Explain modularity and its benefits

Answer 37

Modularity = the decomposition of a system by grouping elements into a smaller number of subsystems with rules governing the architecture for mixing and matching these components. Modularity brings the benefits of versatility (the diverse set of products that an organization can produce) and agility (the ability to respond quickly to fulfill an unpredictable customer order) while, at the same time, delivering within the boundaries of allowed value chain total costs and lead times.

Question 38

Explain a structural hole in the network horizon and explain 2 ways how this can benefit

Answer 38

Structural hole = A structural hole exists when an actor provides the only connection between other actors. Such an actor spans a structural hole and can benefit in two ways: (1) access to information, knowledge, and resources that are not universally held and (2) the ability to play actors, or groups of actors, off against each other in the competition for resources.

Question 39

Explain traditional-, developing- and smart networks in terms of their horizon and homogenous/heterogeneous network

Answer 39

**Traditional network** → All firms have limited horizons → homogenous network **Developing network** → Some (smart) firms have large horizons & others have limited → heterogeneous network **Smart network** → All firms have (similar) large horizons → homogenous network

Question 40

Explain the Networked Business Operating System (BOS) in terms of the logistics-, transaction- and business operating layer

Answer 40

**The logistics layer** consists of everyday logistics and uses (private) data. **The transaction layer** is where firms store and exchange data in order to execute transactions. The firms decide what is shared and what not. **The Business operating layer** allows process execution and management “from a distance” from the underlying application systems.

Question 41

Why implement a BOS?

Answer 41

Implementation of a BOS enables the portability of business processes and facilitates the end-to-end management of processes running across many different organizations in many different forms. It coordinates the processes among the networked businesses and its logic is embedded in the systems used by these businesses.

Question 42

Explain virtual organizations

Answer 42

**Virtual organizations:** Networked organisations can be addressed as ‘virtual organizations’ if the network (partly) consists of virtually organised processes or parts. Virtual means in this context that (groups of) people from different organisational units cooperate from different geographical locations in ‘virtually organized tasks’. Today, global competition, changing markets, and new technologies are opening up qualitatively new ways of creating value. Value can still be created by individual organisations, but also opportunities occur for value-added partnerships.

Question 43

Out of the analysis of the impact of IT on organizations model by Venkatraman, six levels of IT induced business transformations are distinguished. Which are evolutionary and which are revolutionary? + whats the difference?

Answer 43

**Evolutionary:** 1. localised exploiration 2. internal integration **Revolutionary:** 3. business process redesign 4. business network integration 5. business network redesign 6. business scope redefinition **The difference is** that the evolutionary levels take the existing situation as a point of reference and the revolutionary levels take the desired situation in a market network as a point of reference.

Question 44

Explain benchmarking (in business networks?)

Answer 44

In business networks, benchmarking refers to the process of assessing and comparing the performance of network designs (structure and process) and network outcomes (for business and IT performance).

Question 45

How can business performance be measured?

Answer 45

Business performance can be measured, for instance, as quality of care, cost of care, or in generic performance metrics for finance, internal and external processes, customers, markets, innovation, growth and satisfaction. Different metrics and values apply for different actors in the network and vary per level. Technical performance is also determined per stakeholder in the network, using metrics like contribution to the business, business orientation of the technologies, operational excellence, innovation/ development, organisation and satisfaction.

Question 46

What does the NEFETI model do?

Answer 46

Analyze and predict the impact of IT on business network performance

Question 47

What is a smart business network?

Answer 47

• A set of firms (\> 2) that – Provides services to customers – Uses services from suppliers And – Operates as ‘one firm’ – Owned by different owners – Controlled by different ‘operators’/ management teams

Question 48

There are two levels of analysis: Explain Firm level

Answer 48

FIRM level • Investing in IT to connect internal & external processes • Application Portfolio of the firm • Networkability (“connectability”) of the firm • Firm performance

Question 49

There are two levels of analysis: Explain Network level

Answer 49

* Investing in IT to connect internal & external processes * Business bus to connect (IS portfolio’s) of firms in the network * Networkability (“connectability”) of the network * Network performance

Question 50

What are the 5 parts of smart services?

Answer 50

1. rich data 2. knowledge intensive decision engines 3. sophisticated outcome for users 4. architecture for stakeholders 5. automation level of processes