enabling supply networks with collaborative information ...claudio u. ciborra information ecology:...

EnablingEnablingSupply Networks withSupply Networks withCollaborative InformationCollaborative InformationInfrastructuresInfrastructures

Towards a new perpective of the role of ICT inIndustrial Networks

PhD. Dissertation Presentation, 27.feb.2009

Chris NøkkentvedIndustrial PhD, Copenhagen Business School, [email protected]

mailto:[email protected]

Enabling Supply Networks with Collaborative Information Infrastructures - Research Overview | Chris Nøkkentved | CBS CAICT & LPF2

PhD. Dissertation – Mentors & Defence Committee

• Academic Prime MentorProfessor Niels Bjørn-Andersen, Centre for Applied Information and CommunicationTechnologies – CAICT, Copenhagen Business School, Howitzvej 60,3, 2000 Frederiksberg,Danmark

• Company MentorMogens Rødbro, IBM GBS Nordics, Nymøllevej 91, 4, DK-2800 Lyngby, Denmark

• PhD. Defence CommitteeProfessor Robert Austin (Chairman), Harvard Business School (HBS)Professor Peter Weill, MIT Sloan School of Management, USAss. Professor Henning de Haas, Syddansk University and Minerva Management A/S

PhD. Dissertation DatesDelivered: 1st of July 2007Final Review: 2nd of February 2008Pre-defense: 7th of May 2008Defense: 27th of February 2009


Stakeholders

AnalysisSolutionSolution

Social GroupSocial Group

ProblemProblem

DanishATV

DanishATV

CBSMentors

CBSMentors

PwC/IBM

PwC/IBM

OtherMentorsOther

Mentors

Implementation andDeployment ofCollaborative

Planning

Implementation andDeployment ofCollaborative

Planning

PhD. Themes, Publications, Timeline & Stakeholders

Studied Cases(IBM, Cisco,

AECGlobal, Philips)

Studied Cases(IBM, Cisco,

AECGlobal, Philips)

Contributed &Analyzed Results of

IBM’s CPO SRMSurvey 2004-5

Contributed &Analyzed Results of

IBM’s CPO SRMSurvey 2004-5

Industrial PhDApplication

(1999)

Industrial PhDApplication

(1999)

PhDDissertation

(Enabling SupplyNetworks withCollaborativeInformation

Infrastructures)

PhDDissertation

(Enabling SupplyNetworks withCollaborativeInformation

Infrastructures)

CollaborativeProcesses in

eSupply Networks(2000)

CollaborativeProcesses in

eSupply Networks(2000)

CollaborativePlanning in

eMarkets (2001)

CollaborativePlanning in

eMarkets (2001)

UnderstandingCollaborativeProcesses in

Business Networks

UnderstandingCollaborativeProcesses in

Business Networks

eMarket/eHubAssignments(2000-2001)

eMarket/eHubAssignments(2000-2001)

Implementing SRM– A ConceptualFramework Of

Value Creation InSupply Networks

(2003)

Implementing SRM– A ConceptualFramework Of

Value Creation InSupply Networks

(2003)

Conducted SRMPoV Council

Meetings 2002

Conducted SRMPoV Council

Meetings 2002

CollaborativeUpstream

Processes andInfrastructureEnablement

CollaborativeUpstream

Processes andInfrastructureEnablement

Enabling ValueCreation in Supply

Networks withInformation

Infrastructures



Infrastructures



Infrastructures(2004-5)



Infrastructures(2004-5)

Publications

Analyzed Results ofeProcurement CSF

Survey 2001

Analyzed Results ofeProcurement CSF

Survey 2001

ClientsClients

CompanySRM Project

Managers

CompanySRM Project

Managers

SRM/Eprocurement

Projects

SRM/Eprocurement

Projects

Client’sCPOs

Client’sCPOs

CompanyMentor

CompanyMentor

CompanyMgmt

CompanyMgmt

CBSProfessor

CBSProfessor

MITProfessor

MITProfessor

ATVCommitee

ATVCommitee

PersonPerson

2000

2001

2002

2003

2004

2006

On Leave

2005

2008

2007


Business Model Innovation and the role of IT…

• Recent IBM CEO surveys provided further evidence on the importance leaders poseon the role of technology in enabling the necessary and continuous transformationtowards differentiating & collaborative business models

Innovation Priorities (operating margin growth CAGR)

Underperformers Outperformers% o

f res

pond

ents

by

inno

vatio

n pr

iorit

y

Products/services/markets

Operation

BusinessModel

0%

20%

40%

60%

80%

100%

Extent of Collaboration byFinancial Performance (Revenue CAGR)

0%

10%

20%

30%

40%

50%

60%

To a small ormoderate extent

To a large or verylarge extent

UnderperformersOutperformers

Importance of IntegratingBusiness and Technology

7%4%

12%

78%

0%

20%

40%

60%

80%

100%

NoResponse

Little to NotAt All

Moderate Great orCritical

% o

f Res

pond

ents

“A business model is a conceptual view that contains a set of elements and their relationships and allows expressing the business logic of a specificfirm. It is a description of the value a company offers to segments of customers and of the architecture of the firm and its network of partners for creating,

marketing, and delivering this value and relationship capital, to generate profitable and sustainable revenue streams.” (Osterwalder et al. 2005)

Operating Margin Growth in Excess of Peers(Compound annual growth rate over 5 years)

OperationsInnovators-1%

0%

1%

2%

3%

4%

5%

6%

Products/Services/Markets

Innovators

Business ModelInnovators

“The business model we choose willdetermine the success or failure ofour strategy.”

“Products and services can becopied, the business model isthe differentiator.”

“Our greatest focus is on businessmodel innovation, which is where thegreatest benefits lie.”


Recent Studies confirm that Efficient & Aligned Use of ITaffects business models, competition & performance

1965 1975 1985 1995 2005

100%

80

Concentration — market shareheld by top 20 largest firms

High-IT industries

Low-IT industries

Turbulence — number rankingchanges per year

20

12

41965 1975 1985 1995 2005

High-IT industries

Low-IT

Performance gap (profit margin)between top and bottom quartiles

60%

40

20

1965 1975 1985 1995 2005

High-IT industries

Low-IT industries

1965 1975 1985 1995 2005

Triple

Double

Baseline

Spending comparedwith 1995 level

Source: Andrew McAfee and Erik Brynjolfsson, “Investing in the IT That Makes a Competitive Difference,” Harvard Business Review, July-August 2008


TransformationInitiatives

TransformationInitiatives EfficiencyEfficiencyBusiness ModelBusiness Model

IT EnablementIT Enablement

CoreCompetencies

CoreCompetencies

Objective of The Research“Enabling Supply Networks with Information Infrastructures”

“ How Can Transformational Initiatives Enable Business Model Innovation thatLeverages IT Within Supply Networks for Value Creation?”

IS research highlights that successful technology advancement may be driven by, and demand complementaryorganizational transformations.Our main proposition is that successful IT enablement is conditioned by a number of domain-specific operationalcontingencies or “performance enablers” embedded in the current Business Model.Thus, business model contingencies mediate successful IT-enabled improvements in operational efficiency!


Information Infrastructure – Research Literature

Click on book images to read more …

Leveraging the NewInfrastructure: How MarketLeaders Capitalize on Information

Peter Weill, Marianne Broadbent

From Control to Drift: TheDynamics of CorporateInformation Infrastructures

Claudio U. Ciborra

The Labyrinths of Information:Challenging the Wisdom ofSystems

Claudio U. Ciborra

Information Ecology: Masteringthe Information and KnowledgeEnvironment

Thomas H. Davenport, LaurancePrusak

The Social Study of Informationand Communication Technology:Innovation, Actors, and Contexts

Frank Land, Chrisanthi Avgerou(Editor), Claudio Ciborra (Editor)

IT Governance: How TopPerformers Manage IT DecisionRights for Superior Results

Peter Weill, Jeanne W. Ross

Enterprise Architecture asStrategy: Creating a Foundationfor Business Execution

Jeanne W. Ross, Peter Weill, DavidC. Robertson

Actor Network Theory and After

John Law, John Hassard


Business Networks & SCM – Research Literature

Click on book images to read more …

Supply Network Strategies

Lars-Erik Gadde and HakanHakansson

Supply Chain Management onDemand: Strategies andTechnologies, Applications

Chae An and Hansjörg Fromm

(Chris Nøkkentved)

Managing TechnologicalDevelopment (RoutledgeAdvances in Management andBusiness Studies)

Håkan Håkansson, AlexandraWaluszewski

Managing BusinessRelationships

David Ford, Lars-Erik Gadde,Håkan Håkansson, Ivan Snehota

Managing and MarketingTechnology

David Ford, Michael Saren

Understanding BusinessMarketing and Purchasing 3ed.

David Ford (Editor)

Supply Chain Management:Strategy, Planning, andOperation

Sunil Chopra & Peter Meindl

Logistics and Supply ChainManagement: Creating Value-Adding Networks

Martin Christopher


Business EngineeringBusiness EngineeringIndustrial Networks Theory (IMP Group )Industrial Networks Theory (IMP Group )

InformationInformation--ProcessingProcessing

TheoryTheory

ActorActor--Network TheoryNetwork Theory

Coordination TheoryCoordination Theory

Information Infrastructure TheoriesInformation Infrastructure Theories

Foundational Theories of this Research Study“Enabling Supply Networks with Information Infrastructures”


TransformationInitiatives EfficiencyEfficiencyBusiness ModelBusiness Model

IT EnablementIT Enablement

CoreCompetencies

CoreCompetencies


Research Themes: Original Proposition and HypothesesIdentify the initiatives and IT enablement that drive business modeltransformation and study their effect on performance.

T1. What Business Models exist that sufficiently describeCollaborative Supply Networks?

T2. What are the Transformation Initiatives that typically drivechange in a Business Domain Model?

T3. What are the Contextual Factors that sufficientlycharacterize a Business Domain Model?

T4. Which Contextual Factors are influenced by the BusinessDomain Initiatives driving transformation?

T5. Which Contextual factors influence Business DomainEfficiency?

T6. How does Contextual factors and Transformation Initiativesinfluence Business Domain IT-enablement?

T7. How does Business Domain Capabilities or Skills influencethe Business Domain Initiatives?

T8. Which Business Domain Skills influence the Business ModelContextual factors?

T9. Are Business Domain Skills influencing the Business DomainEfficiency?

T10.How does Other Contingencies as Industry, Geography and Sizeaffect our Construct?

T11.Does the state of Business Domain Enablement with IT influenceBusiness Domain Efficiency?

T12.What are the Value-related Metrics that help us measureBusiness Domain Efficiency?

T13.What’s the Role of Actors in defining the state, outcomes &priorities of Business Domain Enablement?

T14.Are Efficient Companies pursuing a broader set of ContextualFactors characterizing a Business Domain Model?

Business ModelDomain

Efficiency (T12)


Efficiency (T12)

Business ModelDomain (T1)Contextual

Factors (T3,14)

Business ModelDomain (T1)Contextual

Factors (T3,14)


Initiatives (T2)


Initiatives (T2)


Skills (T8)


Skills (T8)


Enablement(T11)


Enablement(T11)Influence (T4)

Affects (T10)

Affect (T9)

Affect (T4)Influence (T6)

Influence (T5)Influence (T8)

Influence (T7)


Network/ CollaborativeInformation Infrastructures

Industrial Network

Web-of-Actors

ResourceConstellations

Activity Patterns/Networked Activities

(Collaborative Processes)

RelationalInformation Infrastructures

Relationships (Company)

ActorBonds

ResourceTies

ActivityLinks

(Business Processes)

Theoretical Background – Studying InformationInfrastructures via the IMP’s Actor-Resource-Activity lens

• Information Infrastructures, creation, behavior & effects (e.g. value-creation) cannotbe fully understood if we consider them as a ”Resource” or ”Facility”

Rather, different Information Infrastructures ”mirror” the components of IMP’s ARA model – theymay be viewed as an Actor, Resource and Activity structure!Interorganizational Information Infrastructures enable Business Network Relationships throughcollaborative processes encompasing the Actor-webs, ressource constellations and activities.

Intra-organizational InformationInfrastructures

Actors

Resources

Activities

Internal Network

Actors

Resources

Activities


Theoretical Background – Defining InformationInfrastructures

• An Information Infrastructure can be defined as a socio-technical constructioncontaining actors, resources & activities enabled by ICT, yet extending beyond theboundaries of the focal firm’s business network (Hanseth 1996).

In information infrastructure, every conceivable form of variation in practice, culture, and norm isinscribed at the deepest levels of design.As Star and Ruhleder (1994, 253) characterise it it is “fundamentally and always a relation”!The larger the information infrastructure becomes, the more irreversible it turns.

• Information Infrastructure as the Foundation of Relationships?This vantage point is in coherence with the IMP Group’s (Ford et al. 2003) view of technology as afactor affecting and being affected by relationships within the business network.

• Yet, IMP still views Technology too Unidimensionaly as a “Managed”Resource/Facility

Yet, Ford et al. (2003) writes: “Large IT systems … may drive large sections of activity structures(aka processes) within and beyond the company, “influence” actors roles and relationships and“form” the relationships that companies may be able to pursue”.“…information infrastructure is not just hard to change; it might also be a powerful actor influencingits own future life - its extension and size as well as its form.” (Hanseth, 1996)

• We need a “richer” picture of the infrastructure layers enabled by ICT that shapes,enables and constrains the organization and its business network


Information Infrastructures as a “mirror” of BusinessStudy Assumptions and Propositional Framework

• Information Infrastructures as Actant NetworksAn Enterprise System imposes its own logic on acompany’s strategy, culture & organization(Davenport, 1998)

“Like any actor, the technology, playing the role as apowerful change agent, leads human actors or coalitionsto build ever-shifting alliances with others … becomeinstrumental in the journey of organizationaltransformation”. (Hanseth, 1996).

In considering actor's - human or non-human - abilityto perform in the network, the concept of actant hasbeen established, that is an independent entity withthe potential to become an actor in a given topology.

An actant can become an actor in multiple topologiessimultaneously, perhaps performing and behavingdifferently in various topologies depending on its relativeposition in the respective network.Information Infrastructures mobilize large networks ofother actants (i.e. software vendors, hardware vendorsand service providers) plus actants delivering a constantstream of renewed and tested knowledge, e.g. companiescollaborating closely with the software vendors (Walsham,1997).Current large information infrastructures (like ERP) dorepresent such actant networks in that they containmodularized, interconnected best practice businessprocesses, skills and business rules of diverse areas, allembedded/”translated” (Mattsson, 2003) into ICTsoftware.

Business NetworkBusiness Network

ResourcesActors

Activities

Information InfrastructureInformation Infrastructure

Resources

Actants

Activities

Data, Information, Knowledge, Rules/Logic…

Processes, Transactions, Events, Exceptions, Workflow

Roles, Responsibility,visibility, monitoring


Overview of Information Infrastructure TaxonomiesBusiness Model Segmentation and Study Delimitation

“A business model is a conceptual view that contains a set of elements and their relationships and allows expressing the business logic of aspecific firm. It is a description of the value a company offers to segments of customers and of the architecture of the firm and its network ofpartners for creating, marketing, and delivering this value and relationship capital, to generate profitable and sustainable revenue streams.”(Osterwalder et al. 2005)

Business NetworkBusiness Network

ResourcesActors

Activities

Information InfrastructureInformation Infrastructure

Resources

Actants

Activities

Data, Information, Knowledge, Rules/Logic…

Processes, Transactions, Events, Exceptions, Workflow

Roles, Responsibility,visibility, monitoring

Product LifecycleProduct LifecycleMgmt (PLM)Mgmt (PLM)

Supply ChainSupply ChainExecution (SCE)Execution (SCE)

CustomerCustomerRelationshipRelationshipMgmt (CRM)Mgmt (CRM)

SupplierSupplierRelationshipRelationshipMgmt (SRM)Mgmt (SRM)

Supply ChainSupply ChainPlanning (SCP)Planning (SCP)

EnterpriseEnterpriseSupportSupport


Theoretical BackgroundCollaborative Infrastructures extend beyond the focal firmTrade Exchanges/eMarkets – Creating Shared B2B Infrastructures in Supply Networks

CorporateCorporateCustomersCustomers

Distributor/Reseller

Manufacturer/ OEM

Retailers3P Logistics

Raw MaterialsSupplier

Logistics Providers

ConsumerConsumer

Consortium/Private

Exhange (e.g.Transora)

ConsortiumConsortium/Private/Private

Exhange (e.g.Exhange (e.g.Transora)Transora)

ConsortiumExhange

(e.g. GNX)

ConsortiumConsortiumExhangeExhange

(e.g. GNX)(e.g. GNX)CustomerExchange

(B2C)

CustomerCustomerExchangeExchange

(B2C)(B2C)

Indep. TradeExchange

(horizontal)

Indep. TradeIndep. TradeExchangeExchange

(horizontal)(horizontal)

ComponentSupplier

Manufacturers

VirtualManufacturers

Engineering/DesignPartners

Subcontractor

VirtualDistributors

Source: Nøkkentved & Hedaa, 2000

Marketplace-to-Marketplace

(M2M)relationships

B2Brelationships

Supply Network

CollaborativeCollaborativeInformationInformation

InfrastructureInfrastructure

CollaborativeCollaborativeInformationInformation

InfrastructureInfrastructure

Product/Goods FlowProduct/Goods FlowInformation FlowInformation Flow


Product LifecycleMgmt

Supply ChainExecution

CustomerRelationship

Mgmt

SupplierRelationshipMgmt

Supply ChainPlanning

Enterprise Support

Mapping Supply Networks to Information Infrastructures

Tier 3 to InitialSuppliers

Tier 2Suppliers Tier 1 Suppliers Tier 1

CustomersTier 2

CustomersTier 3 to

End-Customer

FocalCompany

n

2

1

1

2

n

1

2

n

1

n

1

2

3

n

1

2

n

1

n

1

2

3

n

Initi

al S

uppl

iers

, Tie

r n

Initi

al S

uppl

iers

, Tie

r n

Tier

3 to

n C

usto

mer

s

End-

Cus

tom

ers/

Con

sum

ers

–Ti

er n

1

2

n

Competitor3

Competitorn

What other supply networks are they members of?Are they engaged with competitors?

Do they have other trade-off priorities(e.g. cost efficiency vs. responsiveness)

in their other supply network relationships?

?


Mapping Inter-organizational Collaborative Processes toInformation Infrastructures




Mgmt

SupplierRelationshipMgmt


Enterprise Support

CollaborativeManufacturingCollaborativeManufacturing

SynchronizedProductionScheduling

SynchronizedProductionScheduling

Supply ChainExceptionHandling

Supply ChainExceptionHandling

Supply ChainPerformanceSupply ChainPerformance

FulfillmentEvent Tracking

FulfillmentEvent Tracking

CollaborativeTransportation

(Inbound)


(Inbound)


(Outbound)


(Outbound)

CollaborativePromotion &NPI Planning

CollaborativePromotion &NPI Planning

ProductInformation &Configuration

ProductInformation &Configuration

CollaborativeDemand

Forecasting

CollaborativeDemand

ForecastingCollaborativeOrder (ATP)Promising

CollaborativeOrder (ATP)Promising

ResponsiveReplenishment

ResponsiveReplenishment

CollaborativeDistribution

Planning

CollaborativeDistribution

Planning

B2BSales+PriceOptimization

B2BSales+PriceOptimization

B2CSales+PriceOptimization

B2CSales+PriceOptimization

CollaborativeProduct DesignCollaborative

Product Design

CollaborativeProject MgmtCollaborativeProject Mgmt

CollaborativeMedia DesignCollaborativeMedia Design

Auctions,Tenders & BidManagement

Auctions,Tenders & BidManagement

CollaborativeSupply Planning


CollaborativeProcurementCollaborativeProcurement

CollaborativeSourcing

CollaborativeSourcing

CollaborativeDesign

CollaborativeDesign

CollaborativeMachinery

Design

CollaborativeMachinery

Design



’



MgmtSupplierRelationshipMgmt


Enterprise Support

Spare PartsManagementSpare PartsManagement


Supply NetworkPlanning


DemandPlanningDemandPlanning

ProductionSequencing &

Planning

ProductionSequencing &

Planning

Lot-based/CharacteristicSc

heduling

Lot-based/CharacteristicSc

heduling

Production ofConfigurable

Products

Production ofConfigurable

ProductsManufacturing

Execution (MES)Manufacturing

Execution (MES)

VendorManagedInventory

VendorManagedInventory

WM Task &Resource Mgmt

WM Task &Resource Mgmt

TransportationPlanning

TransportationPlanning

WarehouseManagementWarehouse

Management

LogisticsProcessingLogistics

Processing

SupplierManagedInventory

SupplierManagedInventory

Multilevel ATP/CTP

Multilevel ATP/CTP

Supply ChainPerformanceEvaluation

Supply ChainPerformanceEvaluation

Supply ChainEvent Mgmt

Supply ChainEvent Mgmt

Partner Contract& Quote Mgmt

Partner Contract& Quote Mgmt

BusinessOpportunityManagement

BusinessOpportunityManagement

Design RequestRegistration

Design RequestRegistration

ChannelMarketingChannel

Marketing

Channel SalesChannel Sales

SalesConfigurable

Mass Products

SalesConfigurable

Mass Products

Sales &OperationPlanning

Sales &OperationPlanning

OnlineConfigurable

Sales

OnlineConfigurable

Sales

Distributor/Reseller Mgmt

Distributor/Reseller Mgmt

Incentive &Commission

Mgmt

Incentive &Commission

Mgmt

B2B IntegrationRosettanet/EDIB2B IntegrationRosettanet/EDI

Global TradeServices

Global TradeServices

Channel ServiceMgmt

Channel ServiceMgmt

ChannelEnablement

ChannelEnablement

DeliveryShedules and

Capacity

DeliveryShedules and

Capacity

ChannelPerformanceEvaluation

ChannelPerformanceEvaluation

Channel Repairs& Returns

Channel Repairs& Returns

Design ofConfigurable

Products

Design ofConfigurable

Products

Master DataManagementMaster DataManagement

ComponentPrototyping &

Design

ComponentPrototyping &

Design

Integration ofCAD/CAMsystems

Integration ofCAD/CAMsystems

Project &Program Mgmt

Project &Program Mgmt

Enterprise AssetLife-cycle MgmtEnterprise AssetLife-cycle Mgmt

Hazardous &Waste Mgmt &

TQM

Hazardous &Waste Mgmt &

TQM

IntegratedProduct +Process

Engineering

IntegratedProduct +Process

Engineering

New ProductInnovation

(R&D)

New ProductInnovation

(R&D)

Service ChainExecution

Mapping Intra-organizational Collaborative Processes toInformation Infrastructures

RFx & AuctionManagement

RFx & AuctionManagement

SupplyRequirementsForecasting

SupplyRequirementsForecasting

Plan-DrivenProcurementPlan-Driven

Procurement

ContractDevelopment &

Distribution

ContractDevelopment &

Distribution

SupplierEvaluation &

Selection

SupplierEvaluation &

Selection

Content &Catalog

Management

Content &Catalog

Management

ComponentSourcing

ComponentSourcing

Plant & AssetSourcing

Plant & AssetSourcing

Project &MaintainanceProcurement

Project &MaintainanceProcurement

ContractExecutionContract

Execution

InvoiceVerification /

Payments

InvoiceVerification /

Payments

Self-service(unstructured)Procurement

Self-service(unstructured)Procurement

B2B IntegrationRosettanet/

EDI

B2B IntegrationRosettanet/

EDI

SupplierPerformanceMonitoring

SupplierPerformanceMonitoring

CollaborativeReplenishmentCollaborative

Replenishment

Supply OrderManagementSupply OrderManagement

SupplierIntegrationEnablement

SupplierIntegrationEnablement


Research Method & Design – From Interpetism toGrounded Theory to Normative Theory

Qualitative Survey and InterviewsQualitative Survey of 50 eProcurement projects identifiedexperiences, CSFs and related transformation initiatives

Qualitative Survey and InterviewsQualitative Survey of 50 eProcurement projects identifiedQualitative Survey of 50 eProcurement projects identifiedexperiences, CSFs and related transformation initiativesexperiences, CSFs and related transformation initiatives

Construct Creation and Validation via “Council”SMEs (“board of judges”) were assembled to refine and explorativelycluster value creation initiatives and their underlying contingencies

Construct Creation and Validation via “Council”SMEs (SMEs (““board of judgesboard of judges””) were assembled to refine and exploratively) were assembled to refine and explorativelycluster value creation initiatives and their underlying contingecluster value creation initiatives and their underlying contingenciesncies

Create & Conduct Survey of ConstructUtilized above findings to crerate & carry out a questionnaire-based

survey of SRM practices (sample: 344 respondents)

Create & Conduct Survey of ConstructUtilized above findings to crerate & carry out a questionnaireUtilized above findings to crerate & carry out a questionnaire--basedbased

survey of SRM practices (sample: 344 respondents)survey of SRM practices (sample: 344 respondents)

Statistical Analyses of Research ThemesEvaluated plausability of Research Themes proposed with

Multivariate Statistical Inference & Structural Equation Model (PLS)

Statistical Analyses of Research ThemesEvaluated plausability of Research Themes proposed withEvaluated plausability of Research Themes proposed with

Multivariate Statistical Inference & Structural Equation Model (Multivariate Statistical Inference & Structural Equation Model (PLS)PLS)

Research Design

QualitativeQualitativeInterpretiveInterpretiveEthnographyEthnography

QualitativeQualitativeGroundedGrounded

TheoryTheory

Quantitative,Quantitative,NormativeNormativeApproachApproach

Research Methods


Research Analysis for the Quantitative AnalysisHypothesized Constructs with Parameters and Research Themes

SRM Efficiency (T12)

SRM Context (T3,T13,T14)

SRM Initiatives (T2)

SRM Skills

SRM IT Enablement

Operational Initiatives

SRM Operational Skills

Strategic Initiatives

Operational Efficiency

IT Enablement

Business Context

Operational Visibility

Operational Priorities

Operational Context

Outsourcing Context

SRM Regional Skills

Influence(T5)

Influence(T11)

Influence(T4)

Influence (T7)

Influence(T9)

Influence(T10)

Influence(T10)

Influence(T6)

Influence(T4)

Influence(T8)

Q17.0PerformanceMeasurement

Q18.0PerformanceMonitoring

Q9.0Operational

Skills

Q8.0 DirectSourcingIntiatives

Q10.0Regional Skills

Q11.0 FutureRegional Skills

Q2.0OperationalObjectives

Q14.0Importance of

Efficiency

Q12.0SourcingCriteria

Q13.0OperationalChallenges

Q4.0 %StategicProcurement

Q5.0Operational

TrendQ6.0

OutsourcingStatus

Q7.0Outsourced

Commodities

Q15.0OperationalInitiatives

Q16.0Strategic

Initiatives

Q19.0eProcurement

Objectives

Q20.0eProcurement

Benefits

Q21.0eProcurement

CSFs

Q3.0OperationalEfficiency

Q24. IndustryQ25. Company

Size

OperationalInitiatives

SRM OperationalSkills

StrategicInitiatives

OperationalEfficiency

IT Enablement

Business Context

Operational Visibility

Operational Priorities

Operational Context

Outsourcing Context

SRM RegionalSkills


Research Analysis: Qualitative InvestigationIdentified CSFs of eProcurement Projects from 2000-02

We have discovered that successful projects adhere to certain critical success factors.When unchecked, catalog management, supplier adoption, change management, andtechnical services issues contributed to scope reductions in 46% and budget increasesin 32% of eProcurement projects.

Catalog/Catalog/ContentContent

ManagementManagement

ChangeChangeManagementManagement

SupplierSupplierAdoptionAdoption

TechnicalTechnicalServicesServices

Accurately set user expectationsregarding software maturity andcapabilities.

Tap into existing knowledge sources such asvendor and IT communities, partners.

Staff projects with strong resourcesexperienced in eProcurement software,middleware and ERP systems.

Develop strong working relationshipswith vendors.

Evaluate supplier’s ability to be e-enabled beforeadoption process begins

Address legal and administrative issues betweensupplier and buyer early in process

Ensure adequate amount of trainedresources from all Business Units

The key to managing changeis the establishment of a soundplan that integrates the eight criticalsuccess factors – create changevision, define change strategy, buildcommitment, manage peopleperformance, develop culture, designorganization, create change, developleadership, and deliver business benefits.

Explore third party options for addingcontent – e.g., i2, Requisite, Poet,SAQQARA, etc.

Define and understand ownership of contentmanagement responsibilities

Implementation of content managementstandardization and change management

Commitment by supplier to developsufficient trained resources

Ensure supplier’s business concerns areknown and able to be addressed by buyer

Convince suppliers that eProcurementbrings increased sales and a competitiveadvantage

Enlist the support of an integrator with strong vendorties as evidenced by co-development, product testing, andstrategic partnerships.

The comprehensiveness of the plan, the timingand coordination of activities, the use of appropriatesupporting tools, and the application of best practicesdetermines the success of the change program.


Exch

ange

Infr

astr

uctu

reEx

chan

ge In

fras

truc

ture

Source: Internal PwCCresearch, August 2002.

Sourcing(SRM Bidding)

Sourcing(SRM Bidding)

Project Mgmt(cProjects)

Project Mgmt(cProjects)

Procurement(SRM EBP)

Procurement(SRM EBP)

DocMgmt(cFolders)DocMgmt(cFolders)

EnterpriseSupplier(s)

Decision Support(SRM Analytics)

Decision Support(SRM Analytics)

SCM/ERP(APO/MM/PM)

SCM/ERP(APO/MM/PM)

Supplier Self-Services HubSupplier Self-Services Hub

Supply Strategy DevelopmentSupply Strategy Development

ContractTendering (RFx)and Negotiation

ContractTendering (RFx)and Negotiation

SourcingAnalytics and

Reporting

SourcingAnalytics and

Reporting



MRP/PPDS &Scheduling

MRP/PPDS &Scheduling


& ATP


& ATP

Asset Life CycleCollaboration

Asset Life CycleCollaboration

Design &Engineering

Collaboration

Design &Engineering

CollaborationCollaborativeProject MgmtCollaborativeProject Mgmt

Supplier Evaluation and SelectionSupplier Evaluation and Selection

Plan-drivenprocurement(MRP/PM/PS)

Plan-drivenprocurement(MRP/PM/PS)

Demand PlanningDemand Planning

Project/PMRequirementsProject/PM

Requirements

ProcurementAnalytics and

Reporting

ProcurementAnalytics and

Reporting

Content Mgmt(Req/eM & CI)Content Mgmt(Req/eM & CI)

ContractTransactionsManagement

ContractTransactionsManagement

Supplier selfservices

Supplier selfservices

Self-serviceprocurementSelf-serviceprocurement

Master DataMaintainanceMaster Data

Maintainance

Catalog DataCreation

Catalog DataCreation

CatalogMaintainance

CatalogMaintainance

External DataMaintainanceExternal DataMaintainance

Supply MarketIntelligence


Operational sourcing (via Rfx)Operational sourcing (via Rfx)

Supplier QualificationSupplier Qualification

Research Analysis: Qualitative InvestigationIdentification of SRM Processes, Roles and related Initiatives


Research Analysis: Qualitative InvestigationOverview of the Results of the Initial Council Meeting - SRM ValueThemes and Transformation Initiatives

• Based on the “Council of Experts” workshops, an SRM Adoption Model wasdeveloped that consolidated a “richer” model of value creation

• The Council identified 6 Value Drivers driving Upstream SCM PerformanceEach value driver is attained via a cluster of related transformation initiatives.SRM initiatives represent concrete actions that companies can pursue in their attempts to reach anumber of strategic objectives.

3.3.ProcessProcess

efficiencyefficiency

1.1.ValueValue

OptimisationOptimisation

2.2.SourcingSourcing

OptimizationOptimization

4.4.ComplexityComplexityreductionreduction

5.5.SupplierSupplier

collaborationcollaboration

6.6.OrganizationalOrganizationalEmpowermentEmpowerment

3.1 Procurement3.1 ProcurementAutomationAutomation

3.3 Supplier Selection3.3 Supplier SelectionEfficiencyEfficiency

3.2 Contract Handling3.2 Contract HandlingEfficiencyEfficiency

3.4 Supplier3.4 SupplierEnablementEnablement

1.1 Compliance1.1 ComplianceEnforcementEnforcement

1.3 Right Price1.3 Right PriceDeterminationDetermination

1.2 Demand1.2 DemandConsolidationConsolidation

2.1 Supplier2.1 SupplierRationalization &Rationalization &

QualificationQualification

2.2 Procurement Risk2.2 Procurement RiskManagementManagement

2.3 Supply Market2.3 Supply MarketIntelligenceIntelligence

4.1 Content4.1 ContentHarmonizationHarmonization

4.2 Parts4.2 PartsRationalizationRationalization

4.3 Capital Investment4.3 Capital Investment& Tracking& Tracking

5.1 Product5.1 ProductDevelopmentDevelopmentAccelerationAcceleration

5.3 Supply5.3 SupplyRequirementsRequirements

VisibilityVisibility

5.2 Inventory Cost5.2 Inventory CostManagementManagement

5.4 Quality Tracking5.4 Quality Tracking

6.1 Manage &6.1 Manage &Evaluate PurchasingEvaluate Purchasing

StaffStaff

6.2 Reporting &6.2 Reporting &CommunicationCommunication


Research Analysis: Qualitative InvestigationSocial-Network Analysis (SNA) Non-parametric Principal ComponentsNetwork Diagram (generated by NetDraw)


Research Analysis: Qualitative InvestigationFrom Identification to Sequencing of SRM Initiatives

Stage 4Stage 1 Stage 2 Stage 3

EV

ALU

AT

EA

GG

RE

GA

TE

RA

TIO

NA

LIZE

HA

RM

ON

IZE

EN

AB

LEC

ON

SO

LIDA

TE

OP

TIM

IZE



Supplierenablement

Supplierenablement

Contentharmonization

Contentharmonization

Supplyrequirements

visibility

Supplyrequirements

visibility

Manage &Evaluate Staff

Manage &Evaluate Staff

Procurementrisk

management

Procurementrisk

management

ComplianceenforcementComplianceenforcement

Contracthandlingefficiency

Contracthandlingefficiency

Demandconsolidation

Demandconsolidation

Inventory costmanagement

Inventory costmanagement

Capitalinvestment and

tracking

Capitalinvestment and

tracking

Quality trackingQuality tracking

Supplierrationalization &

qualification

Supplierrationalization &

qualification

Right pricedetermination

Right pricedetermination

Supplierselectionefficiency

Supplierselectionefficiency

Reportingand Commu-

nication

Reportingand Commu-

nication

Partsrationalization

Partsrationalization

Productdevelopmentacceleration

Productdevelopmentacceleration

Procurementautomation

Procurementautomation


Research Analysis: Qualitative InvestigationFinal SRM Transformation Matrix

ExecutionExecutionExecution

DevelopmentDevelopmentDevelopment

1. Focus Sourcing Strategy• Supplier Selection Efficiency• Supplier Rationalisation & Qualification• Right Price Determination

6. Enforce Corporate Standards• Demand (Spend) Consolidation• Compliance Enforcement• Contract Handling Efficiency

3. Optimal Supplier Management• Parts Rationalisation• Quality Tracking

2. Efficient Purchasing Processes• Reporting & Communication• Capital Investment & Tracking

Identify and manage sources of supply Purchase materials and services

CollaborationCollaborationCollaboration

EnablementEnablementEnablement

Stra

tegi

cSt

rate

gic

Ope

ratio

nal

Ope

ratio

nal

7. Improve Supply Visibility• Product Development Acceleration• Supply Market Intelligence

4. Improve Demand Visibility• Supply Requirements Visibility• Procurement Risk Mgt• Inventory Cost Mgmt

Sourcing Purchasing

5. Efficient Supplier Content Mgmt• Supplier (Content) Enablement• Manage Sourcing Staff• Content Harmonization

5. Efficient Enablement+Integration• Procurement Automation• Manage Purchasing Staff• Supplier (B2B) Enablement



OperationalPriorities

ITEnablement

OperationalContext

OperationalSkills

OutsourcingContext

RegionalSkills

OperationalVisibility

Q3.0OperationalEfficiency

Q2.0OperationalObjectives

Q14.0Importance ofOperationalEfficiency

Q12.0 SourcingCriteria

Q13.0OperationalChallenges

Q4.0 %StategicProcurement

Q5.0Operational

Trend

Q6.0Outsourcing

Status

Q7.0Outsourced

Commodities

Q8.0 DirectSourcingIntiatives

Q10.0 RegionalSkills

Q11.0 FutureRegional Skills

Q9.0Operational

Skills

Q15.0OperationalInitiatives

Q16.0 StrategicInitiatives

Q17.0PerformanceMeasurement

Q18.0PerformanceMonitoring

Q19.0eProcurement

Objectives

Q20.0eProcurement

Benefits

Q21.0eProcurement

CSFs

Research Analysis: Quantitative SurveyInitial Survey Constructs with Parameters and Effect

• During the Councilstudy we detailed theSRM transformationinitiatives

• The exercise alsoexposed some of thebackground capability-based actions andimpacts that they had.

• These were classifiedunder the headings ofour preliminaryconcepts and thendefined in greater detail.

• A detailed measurementmodel was developed bythe author based oncurrent research andwas used to build thequestionnaire.


Research Analysis: Quantitative SurveyContingency & ANOVA results of Actor Title vrs SignificantParameters

• Assessing T13:“Actors DefineState & Enablementof SRM Domain”

• In summary, wehave foundsignificant supportfor our researchtheme that differentActor Roles asdefined by Titles inour survey havedifferentperspectives onhow SRM issupposed to betransformed andenabled viatechnology, incorrespondencewith Gadde andHåkansson (2001).


Research Analysis: Quantitative SurveyAssessing T14: “High Performers Focus on Broader Transformation”

• From this analysisit is evident thatgroupings likeOperational-Objectives, -Outsourcing, -Focus, -Visibilityand theContingency/Context, eachexplain more than8% of the totalvariation among thePerformanceLevels/Clusters.

• On the other hand,it seems thatStrategic Initiatives,Operational Skillsand eProcurementObjectives explainless of the totalvariance.

• Hence indicatingthat these groupsare part of abackground set ofeffects affecting ourprimary effects.

0,0114,1Q25.o_CompSize0,0834,1Q24.0_Industry(Rsq=0,179*)0,088,2Q23.TitleBusiness Context0,034,9Q20.9_eProcBen_ProvidTranspData(Rsq=0,0804*)0,073,2Q20.4_eProcBen_RedTransactCostseProcurement Benefits0,053,9Q19.9_eProcObj_ProvidTranspDataeProcurement Objectives (Rsq=0,0288*)0,0014,5Q18.4_ProcuMon_DevInfSupplStrat

0,073,2Q18.2_ProcuMon_ChallengBUdemand

0,083,1Q17.8_ProcuKPI_TCO

0,044,3Q17.7_ProcuKPI_eProcBenefits

0,025,2Q17.5_ProcuKPI_Prod&ServQuality0,025,1Q17.4_ProcuKPI_ProcurServicPerf(Rsq=0,1294*)0,083,0Q17.1_ProcuKPI_ProcEfficie&CostOperational Visibility0,025,4Q16.3_ProcuStrat_BPprocs_eSourcStrategic Initiatives (Rsq=0,0153*)0,008,5Q15.5_ProcuEff_RFIDusage0,054,0Q15.4_ProcuEff_SupplierPerfMgmt(Rsq=0,0492*)0,053,7Q15.2_ProcuEff_SupplCollProdDevOperational Initiatives0,025,7Q13.4_SrcChall_Spend_Visibility

0,092,9Q12.10_SrcCrit_SupCollaboration

0,0011,4Q12.3_SrcCrit_Environmental

0,067,5Q4.3_Oper%_Services0,0111,4Q4.2_Oper%_DirectMaterials(Rsq=0,1155*)0,096,5Q4.1_Oper%_IndirectMaterialsOperational Context0,053,7Q11.6_OperFutSkil_SouthEastAsia0,044,2Q11.3_OperFutSkil_Latin_America(Rsq=0,0608*)0,0018,3Q8.0_SourcDir_GlobDirSourcInitsRegional Skills0,085,1Q9.5_OperSkil_ContractComplianc(Rsq= 0,0383*)0,027,9Q9.1_OperSkil_Glob_SourcDirectsOperational Skills0,0113,5Q6.3_OutsStatus_Sourcing0,0112,6Q6.1_OutsStatus_IndirectMats(Rsq=0,1088*)0,039,0Q5.2_OperTrend_IndirectSourcingOutsourcing Context0,025,1Q2.10_OperObj_Intr_eSourcingSys

0,073,3Q2.7_OperObj_FindGlobalSupplier

0,044,4Q2.4_OperObj_ResponsiveToDemand0,073,3Q2.3_OperObj_ReducMaverickSpend(Rsq=0,0868*)0,0013,2Q2.1_OperObj_Reduce_Prod_CostsOperational Priorities

Prob > Chi2Chi2 RatioParametersOLR Hypothesized Groups (with R2)


OperationalSkills Operational

Priorities



eProcurementObjectives


OutsourcingContext

RegionalSkills


OperationalContext

BusinessContext

eProcurementBenefits

XX

X

X

X

X

X

31,7**

11,0**

9,9**

9,9**

9,7**

9,4**

9,1**

6,1*

4,5*

3,8*

2,5

4,9*

X

3,5

Research Analysis: Quantitative Statistical AssessmentOLS Regression of the direct & interaction effects identified manybackround interaction effects influencing performance


Research Analysis: 2nd Quantitative Analysis with SEMSelecting the Partial-Least Squares to test our Performancehypotheses

• The partial least square (PLS) method is a variance-based causal modeling approach, developed in the1960s by Herman Wold (1989).

In contrast to PLS, most other SEM are covariance-based,with LISREL (Linear Structural Relation) being the most.Both approaches are used to analyze similar models andPLS and LISREL are considered to be complementaryrather than competitive prominent (Gefen, Straub, &Boudreau, 2000).

• Why did we select PLS?The degree of influence of the constructs oneach other and on performance is of interest.

Only then can the model provide decision makingsupport for companies as to where to set prioritiesin improvement and transformation initiatives.

The underlying theory has not been fullydeveloped yet, and even though the surveydesign was well founded in previous research,it was certainly not all inclusive with regards tothe parameters that could have beenmeasured, so it was deemed highly probablethat there exists an inherent measurementerror to some degree.Though the overall sample size is relativelylarge (N=344), when it comes to theTechnology Enablement parameters (i.e.eProcurement), we did validate app. 127answers, which is not considered a sufficientsample size for a covariance methods (i.e.LISREL).

• How did we build the PLS Model?We used Chen’s (2000) recommendations anditerated through a number of models bystudying their overall power and statisticalsignificance (via T-stats).Identified the “best fiting” model


Research Analysis: Quantitative SEM AnalysisIterating towards the best costruct with PLS


Research Analysis: Quantitative SEM AnalysisFinal Partial-Least Squares Model with Interaction Effectsof the expanded hypotheses


Research Analysis: Quantitative AnalysisLevels of Performance versus relevant factors (T14.Are EfficientCompanies pursuing a broader set of Contextual Factors characterizinga Business Domain Model?)

Operational Efficiency

eProcurement Benefits

eProcurement Objectives

Operational Objectives

Objectives MeasurementPerformance Monitoring

Sourcing Criteria

Operational Initiatives

Strategic Initiatives

Above Avg

Average

Below Avg

Enabling Supply Networks with Collaborative Information Infrastructures - Research Overview | Chris Nøkkentved | CBS CAICT & LPF35 drives

Summary of Quantitative AnalysisState of Hypotheses after after the Statistical Analysis

Note: Path line-thickness depict the strength of the path causation, while all characters in italics mean that either that the factorwas removed or the postulated research proposition/theme was not proved.

SRM Initiatives

SRM Efficiency

SRM Context Factors

SRM Skills

SRM Enablement

SRMSkills

SRM OperationalInitiatives

SRM StrategicInitiatives



BusinessContext



OperationalContext

OutsourcingContext

Influence(T4 )

Influence(T6 )

Influence(T11)

Influence (T4 )

Influence (T9 )

Influence(T10 )

Influence(T10 )

Influence(T5 )Influence

(T8 )

Influence (T7 )

Regional SRMSkills


Enabling Supply Networks with Collaborative Information Infrastructures - Research Overview | Chris Nøkkentved | CBS CAICT & LPF36 drives

Summary of the Study FindingsSRM Adoption and Transformation Framework

• Definition of Domain Criteria, -Objectives and Monitoring mechanisms are pivotal for companiesthat successfully enable their operations with IT for higher Efficiency.

SRM Initiatives

SRM Efficiency

SRM Context FactorsSRM Skills

SRM IT-Enablement

OperationalSkills







OperationalContext



Future Research – Towards Dynamic-, Self-transforming Information Infrastructures

• Information Infrastructures asActant Networks

Who is controlling whom?technology or humans?

• Large CollaborativeInformation Infrastructurestend to “drift” towards“inertia”

Just like their intra-organizational applicationlandscapes, like large ERPsystems, Collaborativeapplication landscapes tend toreach difficulties with change.High degrees of“structuredness” lead to higher“inertia”.

• There is a need to researchhow such informationinfrastructures may betriggered to commence a newlife-cycle

We need to identify ways tointroduce Information Entropy inthe continuous evolution oflarge applications.

Structuredness

Low Entropy

Unstructuredness

High Entropy

Flexibility Inertia

Transformation

Ability to Change

Context ofChange

enabling supply networks with collaborative information ...claudio u. ciborra information ecology:...

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