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Summary Information Systems in E-business and online commerce
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Lecture 1 Information Systems in E-business and online commerce introductionKuk & janssen (2013): Assembling infrastructures and business models for service design and
innovation
Bharadwaj (2013): Digital business strategy: Towards a next generation of insights
Zhu (2004): the complementarity of information technology infrastructure and e-commerce
capability: a resource-based assessment of their business value
Information systems: to convert data into information
- Field of research within management’s science.
- This days it is mainly digital technology and people (individuals in different capacities)
- How do we value out of IT that can be used for organizations?
Digital innovation: the carrying out of new combinations of digital and physical components to
produce novel products.
- Business model: capture value innovating from the market.
- Network effects: product that increases in value when the number of units increase also
Digital technologies enable new business models and strategies (reshaping traditional business
strategies)
- Due to digital innovation: no longer separate IS and business strategies
o Instead of alignment (how do we get ROI) of business and IS strategies, IS strategy is
part of business strategy
o Both internal and external
- Digital business strategy: fusion between business and IS strategies
Accenture vision on digital business
Profit margin:
- reduce unit costs and operating costs and exploit the market
Key drivers of digital business strategy (Kuk & Jansen):
- key streams of research that going in into digital business strategies
o key external digital trends
o key organizational shifts
software as a service: huge connectivity with internet (subscription fee) Instead of buying all the
hardware, you’re now able to require most of the function as a service (phone service, tv package).
Back in the days you bought in the store Microsoft, a package of software and storage space. Now
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,you built your app on your MacBook and set up an account with amazon web services and they take
care of all the service items and in addition you pay a subscription fee. Instead of buying all the
hardware, you’re now able to require all the functions. (Sales forces and Microsoft office)
- Changing of the business market.
- Scope and scale of digital business strategy: IT is trans functional and not just for one in
particular. Increasing digitization of products e.g. music industry (video stores disappeared
and Netflix came up)
- Speed of decision making: adaptation to rapidly change in the environment either in the
supply and buyer side (re-organise supply chain in fashion brands).
- Source of value creation and capture: all of a sudden you can get value out of information.
Information that they get out of the data and sell that data to a third party advertiser.
Multisided business models: Ebay, Uber; connect a buyer and seller.
Four ways in which the scale of digital business strategy is distinct and qualitatively different
1. Rapid up and downscaling; thanks to cloud computing
2. Network effects; increasing value when more users
3. Abundance on data; due to digital intensity, connectivity and big data
4. Alliance and partnerships; through shared digital assets with others in the ecosystem (key
component of doing a digital partnerships)
o apple has a whole ecosystem of creators that create new apps (and thereby creating
new value)
Digital business ecosystems: Relies on information exchanges inside and outside organisations à
boundaries between internal and external are blurring
Instead of producing good service and marketing and selling that, these boundaries are blurring
(who’re the producers and retailers when you use a new app generated by Apple; all a network of
value proposition), because we have these symbiosis (monopoly at platform)
- Rather than building a product, ship in a box and get rid of it, they created a platform and
adding value into it with co-creation. à Innovating in service and tools
Different business ecosystems:
- Symbiosis: whole ecosystem benefits, value that no participant could create alone
- Platform: services, tools, technologies that the whole ecosystem can use to enhance
performance
- co-evaluation: participants and ecosystem as a whole evolve together.
Back-end Information systems: Enterprise systems, databases, collaboration tools
- Back-end integration (Zhu 2013): is important success factor for E-business
- Integration is important for fitting the pieces together and linking disparate systems and
fragmented resources so as to enable firms to get greater return on their investment.
- Increasingly important with blurring boundaries, but also increasingly unclear what is back-
end, front-end, internal and external
Front-end Information systems: websites,
social media, online transaction processing
Zhu (2013) Interaction effect: that the
integration of e-commerce capability and IT
infrastructure reinforced their main effects
on firm performance
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, Kuk & Jansen (2015):
Front-end: create online services to meet front-end business logics and requirements. Exploration of
new possibilities
Back-end: first acquire IT assets, build complementarities and improve efficiency at the back-end.
Exploitation of existing assets.
The front-end approach leads to more services that are innovative in the short term. Thereby, front
end may create too much complexity in Enterprise Architecture. And the back-end approach leads to
slower development of services, but provides advantages in the longer term since an infrastructure is
built on which services can be more efficiently and effectively developed
Enterprise architecture: the definition and representation of a high-level view of an enterprise’s
business processes and IT systems, their interrelationships, and the extent to which these processes
and systems are shared by different parts of the enterprise.
Conclusions:
- e-business is digital business; digital business strategy is integration of IS and Business
strategy
- information systems are central to digital business
- IS are results and enablers of digital innovation
- Integration of back-end and front-end systems is crucial; enterprise architecture
- Developing new e-services can take both front-end and back-end approach
- Digital innovation enables business ecosystems; boundaries are blurring and important
questions arise on how to organize for digital business
Recap that week
E-commerce capability and IT infrastructure (hardware and software) are combined and then it
positively affects the firm performance.
Definition of digital innovation:
- combinations of digital and physical components
- Moore’s law: growth of the technology and data will multiple every two years.
- Network effects
E-business information systems integration:
- back-end: Enterprise systems (ERP), databases, inventory management
- Front-end: Website’s, social media, online transaction processing
Interaction effect (Zhu 2103): that the integration of e-commerce capability and IT infrastructure
reinforced their main effects on firms performance and mutually enhancing synergies exist between
legacy IT systems and e-commerce capabilities.
Lecture 2 Technology and Organization
Orlikowski (1992): the duality of technology: Rethinking the concept of technology in organizations
Leonardi (2013): Theoretical foundations for the study of sociomateriality
Zammuto (2007): Information technology and the changing fabric of organizations
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