Showing papers on "Business value published in 2006"

Relationship value and relationship quality: Broadening the nomological network of business‐to‐business relationships

Abstract: Purpose – Established models of buyer-seller relationships do not reflect managerial emphasis on supplier performance evaluation when modelling business relationships. Proposes that relationship value should be included as a key constituent in such models. Aims to explore the construct's links with key constituents of relationship quality, i.e. commitment, satisfaction, and trust. Design/methodology/approach – A two-stage research design was used. First, depth-interviews were conducted with ten senior-level purchasing managers in US manufacturing companies. Second, data were gathered in a nation-wide mail survey among 400 purchasing professionals. Findings – The findings suggest that relationship value is an antecedent to relationship quality and behavioural outcomes in the nomological network of relationship marketing. Value displays a stronger impact on satisfaction than on commitment and trust. Value also directly impacts a customer's intention to expand business with a supplier. In turn, its impact on the propensity to leave a relationship is mediated by relationship quality. Contrary to previous research, trust does not appear in this study as an antecedent of behavioural outcomes, but as a mediator of the satisfaction-commitment link. Research limitations/implications – Confirms the role of value as a key relationship building-block. Researchers should integrate this cognitive performance-based construct in models of business relationships. Limitations and research directions refer to the sampling procedure, the need to include the supplier's value perceptions, the possibility of conducting longitudinal research, and the opportunity to assess additional moderating variables. Practical implications – When the goal is to increase business with an existing customer, managers should focus on relationship value. In turn, when managers are concerned with the risk of customers leaving a relationship, they should focus on relationship quality. Trust appears as an important ingredient in stabilising existing business relationships. Originality/value – Stresses the pivotal role of relationship value in marketing. Contributes to a better fit between relationship marketing models and managerial practice in business markets.

Relationship value and relationship quality: Broadening the nomological network of business-to-business relationships

Abstract: Purpose – Established models of buyer-seller relationships do not reflect managerial emphasis on supplier performance evaluation when modelling business relationships. Proposes that relationship value should be included as a key constituent in such models. Aims to explore the construct's links with key constituents of relationship quality, i.e. commitment, satisfaction, and trust. Design/methodology/approach – A two-stage research design was used. First, depth-interviews were conducted with ten senior-level purchasing managers in US manufacturing companies. Second, data were gathered in a nation-wide mail survey among 400 purchasing professionals. Findings – The findings suggest that relationship value is an antecedent to relationship quality and behavioural outcomes in the nomological network of relationship marketing. Value displays a stronger impact on satisfaction than on commitment and trust. Value also directly impacts a customer's intention to expand business with a supplier. In turn, its impact on the propensity to leave a relationship is mediated by relationship quality. Contrary to previous research, trust does not appear in this study as an antecedent of behavioural outcomes, but as a mediator of the satisfaction-commitment link. Research limitations/implications – Confirms the role of value as a key relationship building-block. Researchers should integrate this cognitive performance-based construct in models of business relationships. Limitations and research directions refer to the sampling procedure, the need to include the supplier's value perceptions, the possibility of conducting longitudinal research, and the opportunity to assess additional moderating variables. Practical implications – When the goal is to increase business with an existing customer, managers should focus on relationship value. In turn, when managers are concerned with the risk of customers leaving a relationship, they should focus on relationship quality. Trust appears as an important ingredient in stabilising existing business relationships. Originality/value – Stresses the pivotal role of relationship value in marketing. Contributes to a better fit between relationship marketing models and managerial practice in business markets.

Customer value propositions in business markets

Abstract: Examples of consumer value propositions that resonate with customers are exceptionally difficult to find. When properly constructed, value propositions force suppliers to focus on what their offerings are really worth. Once companies become disciplined about understanding their customers, they can make smarter choices about where to allocate scarce resources. The authors illuminate the pitfalls of current approaches, then present a systematic method for developing value propositions that are meaningful to target customers and that focus suppliers' efforts on creating superior value. When managers construct a customer value proposition, they often simply list all the benefits their offering might deliver. But the relative simplicity of this all-benefits approach may have a major drawback: benefit assertion. In other words, managers may claim advantages for features their customers don't care about in the least. Other suppliers try to answer the question, Why should our firm purchase your offering instead of your competitor's? But without a detailed understanding of the customer's requirements and preferences, suppliers can end up stressing points of difference that deliver relatively little value to the target customer. The pitfall with this approach is value presumption: assuming that any favorable points of difference must be valuable for the customer. Drawing on the best practices of a handful of suppliers in business markets, the authors advocate a resonating focus approach. Suppliers can provide simple, yet powerfully captivating, consumer value propositions by making their offerings superior on the few elements that matter most to target customers, demonstrating and documenting the value of this superior performance, and communicating it in a way that conveys a sophisticated understanding of the customer's business priorities.

The innovation value chain

Abstract: Innovation events - the introduction of new products or processes - represent the end of a process of knowledge sourcing and transformation. They also represent the beginning of a process of exploitation which may result in an improvement in the performance of the innovating business. This recursive process of knowledge sourcing, transformation and exploitation we call the innovation value chain. Modelling the innovation value chain for a large group of manufacturing firms in Ireland and Northern Ireland highlights the drivers of innovation, productivity and firm growth. In terms of knowledge sourcing, we find strong complementarity between horizontal, forwards, backwards, public and internal knowledge sourcing activities. Each of these forms of knowledge sourcing also makes a positive contribution to innovation in both products and processes although public knowledge sources have only an indirect effect on innovation outputs. In the exploitation phase, innovation in both products and processes contribute positively to company growth, with product innovation having a short-term ‘disruption’ effect on labour productivity. Modelling the complete innovation value chain highlights the structure and complexity of the process of translating knowledge into business value and emphasises the role of skills, capital investment and firms’ other resources in the value creation process.

Customer perceived value in banking services

Abstract: Purpose – The purpose of this research is to analyse the dimensionality of the concept of perceived value in the banking sector, adapting the GLOVAL scale of measurement of perceived value to the banking services sector.Design/methodology/approach – A total of 200 customers of financial entities were surveyed, and structural equations models were used to verify the reliability and validity of the scale of perceived value.Findings – Perceived value is found to be a multidimensional construct composed of six dimensions: functional value of the establishment, functional value of the personnel; functional value of the service; functional value price; emotional value; and social value. A scale of overall perceived value in financial services was obtained, composed of six dimensions and represented by 22 items that are significant for their measurement.Research limitations/implications – In future studies it would be interesting to include items to measure non‐monetary sacrifices, such as waiting times, queues,...

ERP Investments and the Market Value of Firms: Toward an Understanding of Influential ERP Project Variables

Abstract: This study contributes to the growing body of literature on the value of enterprise resource planning (ERP) investments at the firm level. Using an organization integration lens that takes into account investments in complementary resources as well as an options thinking logic about the value of an ERP platform, we argue that not all ERP purchases have the same potential impact at the firm level due to ERP project decisions made at the time of purchase. Based on a sample of 116 investment announcements in United Statesbased firms between 1997 and 2001, we find support for our hypotheses that ERP projects with greater functional scope (two or more value-chain modules) or greater physical scope (multiple sites) result in positive, higher shareholder returns. Furthermore, the highest increases in returns (3.29) are found for ERP purchases with greater functional scope and greater physical scope; negative returns are found for projects with lesser functional scope and lesser physical scope. These findings provide empirical support for prior theory about the organizational integration benefits of ERP systems, the contribution of complementary resource investments to the business value of IT investments, and the growth options associated with IT platform investments. The article concludes with implications of our firm-level findings for this first wave of enterprise systems.

M‐loyalty: winning strategies for mobile carriers

Abstract: Purpose – This study aims to investigate determinants of satisfaction and loyalty decisions in the use of mobile services.Design/methodology/approach – A research model was designed to identify multi‐dimensions of mobile service quality and perceived value, and investigate their influences on satisfaction and loyalty. Structural equation modeling was employed to test hypotheses.Findings – Statistical analysis identified five distinct dimensions of mobile service quality, and their direct and indirect effects on economic value, emotional value on loyalty intention through satisfaction. Two dimensions of perceived value (i.e. economic value, emotional value) had significant influences on customer satisfaction, and then, on loyalty intention. Also, the results show interrelationship between economic and emotional value.Originality/value – In particular, each dimension of mobile service quality appeared to have different effects on perceived economic value, emotional value, and the level of satisfaction. Acco...

Which Came First, it or Productivity? Virtuous Cycle of Investment and Use in Enterprise Systems

Abstract: While it is now well established that IT intensive firms are more productive, a critical question remains: Does IT cause productivity or are productive firms simply willing to spend more on IT? We address this question by examining the productivity and performance effects of enterprise systems investments in a uniquely detailed and comprehensive data set of 623 large, public U.S firms. The data represent all U.S. customers of a large vendor during 1998-2005 and include the vendor's three main enterprise system suites: Enterprise Resource Planning (ERP), Supply Chain Management (SCM), and Customer Relationship Management (CRM). A particular benefit of our data is that they distinguish the purchase of enterprise systems from their installation and use. Since enterprise systems often take years to implement, firm performance at the time of purchase often differs markedly from performance after the systems go live. Specifically, in our ERP data, we find that purchase events are uncorrelated with performance while go-live events are positively correlated. This indicates that the use of ERP systems actually causes performance gains rather than strong performance driving the purchase of ERP. In contrast, for SCM and CRM, we find that performance is correlated with both purchase and go-live events. Because SCM and CRM are installed after ERP, these results imply that firms that experience performance gains from ERP go on to purchase SCM and CRM. Our results are robust against several alternative explanations and specifications and suggest that a causal relationship between ERP and performance triggers additional IT adoption in firms that derive value from their initial investment. These results provide an explanation of simultaneity in IT value research that fits with rational economic decision-making: Firms that successfully implement IT, react by investing in more IT. Our work suggests replacing either-or views of causality with a positive feedback loop conceptualization in which successful IT investments initiate a virtuous cycle of investment and gain. Our work also reveals other important estimation issues that can help researchers identify relationships between IT and business value.

The transformational dimension in the realization of business value from information technology

Abstract: Econometric studies have highlighted factors that appear to explain the differential effects of information technology (IT) on productivity at the firm level. Central to these explanations is the concept of organizational transformation; that value realization from IT depends on time-consuming investments in organizational change and results in new, often intangible, organizational assets. The aim of this study was to further investigate the concept of IT-enabled organizational transformation as a component of the value realized from IT at the firm level. Survey data was analyzed from respondents from 1050 businesses of varying sizes and across industries. Transformational benefits were found to exist as a distinct benefit category and to be closely related to other forms of IT-generated business benefits. They were also an important component of overall IT business value. Qualitative data illustrated these findings and pointed to possible complex causal relationships in the generation of IT value. The findings have implications for models of IT business value generation and for managerial practice.

Quality management practices and their relationship with customer satisfaction and productivity improvement

Abstract: Purpose – There is considerable confusion surrounding the applied role and business value of TQM. Anecdotal evidence and empirical studies in the literature suggest considerable variability in the performance of TQM. The purpose of the paper is to test the strength of the relationship between quality management practice and two key operational performance measures: productivity improvement and customer satisfaction.Design/methodology/approach – A large database consisting of 962 responses from Australian manufacturing firms and 379 responses from New Zealand manufacturing firms is used to test the hypotheses.Findings – The major finding of the paper is that multiple quality management practices when implemented simultaneously have a significant and positive effect on productivity improvement and customer satisfaction.Research limitations/implications – The results presented in this paper are drawn from one industry at one point in time. Generalising the results to other industries should be done with caut...

Customer value and switching costs in business services: developing exit barriers through strategic value management

Abstract: Purpose – The purpose of this study is to examine the concept of customer value and its role in building switching costs perceptions. The current research develops scales and empirically validates a typology of customer value for business services.Design/methodolgy/approach – Through an extensive literature review, qualitative interviews, and an empirical investigation, the current study identifies three facets of customer value for business services (i.e. economic value, relational value, and core value) and investigates their relationships with buyers' perceptions of switching costs. Structural equation modeling techniques were used to evaluate a measurement model and structural relationships.Findings – The findings show that economic value and the value obtained from relational and support aspects of a service exert strong positive impact on customers' perceptions of switching costs and thus serve as barriers to exit. Although core service does not seem to have positive impact on switching costs, core ...

Performance measurement in tourism: a value chain model

Abstract: Purpose – The tourism industry consists of various players and tourism demand is met by the joint efforts of these players. However, it seems that there is no attempt in the tourism management literature proposing frameworks or models, which can assist the tourism companies, evaluate and control the overall tourism value chain. This paper attempts to show the usability of value chain concept in the tourism industry to manage and measure the value chain processes.Design/methodology/approach – A tourism value chain model with four stages; win order, pre‐delivery support, delivery, and post‐delivery support, is developed. A value chain performance measurement model for the tourism industry is suggested according to the value chain model developed.Findings – There is an opportunity to study the tourism industry as a value chain and to develop a value chain oriented performance management and measurement framework that would allow various players to communicate and coordinate their processes and activities in ...

Enterprise SOA: Designing IT for Business Innovation

Abstract: Information Technology professionals can use this book to move beyond the excitement of web services and service oriented architecture (SOA) and begin the process of finding actionable ideas to innovate and create business value. In Enterprise SOA: Designing IT for Business Innovation, SAP's blueprint for putting SOA to work is analyzed from top to bottom. In addition to design, development, and architecture, vital contextual issues such as governance, security, change management, and culture are also explored. This comprehensive perspective reduces risk as IT departments implement ESA, a sound, flexible architecture for adapting business processes in response to changing market conditions.This book answers the following questions:What forces created the need for Enterprise Services Architecture?How does ESA enable business process innovation?How is model-driven development used at all levels of design, configuration, and deployment?How do all the layers of technology that support ESA work together?How will composite applications extend business process automation?How does ESA create new models for IT governance?How can companies manage disruptive change?How can enterprise services be discovered and designed?How will the process of adapting applications be simplified?Based on extensive research with experts from the German software company SAP, this definitive book is ideal for architects, developers, and other IT professionals who want to understand the technology and business relevance of ESA in a detailed way--especially those who want to move on the technology now, rather than in the next year or two.

From Customer Lifetime Value to Shareholder Value: Theory, Empirical Evidence, and Issues for Future Research

Abstract: The authors propose a chain of effects framework for understanding how customer lifetime value (CLV) affects shareholder value (SHV). In the chain of effects framework, the authors propose that CLV...

Corporate social responsability and value creation. Determinants and mutual relationships in a sample of European listed firms.

Abstract: The purpose of this paper is twofold: i) to point out the determinants of a firm orientation to stakeholders' interests; ii) to analyze the relationship between shareholder value and stakeholder value as firm goals. Both issues are empirically verified on a sample of European listed companies. Empirical evidence shows that time, nationality, industry, size and level of growth of a firm determine its stakeholder ratings. Although the empirical evidence presented concerning the link between the creation of shareholder value and stakeholder value is neither unequivocal nor statistically significant, it can be inferred that a firm pursues stakeholders satisfaction to achieve a better value performance.

Value‐creating ecologies: understanding next generation business systems

Abstract: Purpose – This paper sets out to describe and illustrate an emerging shift in the conceptualisation of value creation in business, namely the emergence of value ecology thinking.Design/methodology/approach – This paper examines shifts in the understanding of value creation in key business, economic and innovation literature and focuses on developments in creative industries at the forefront of technology and innovation – film, TV, computer games, e‐business, mobile phones – to illustrate how business increasingly creates value through ecologies.Findings – This paper identifies five important shifts in the conceptualization of value creation by highlighting a growing prevalence in the literature of several ecological metaphors used to explain business processes, namely: the shift from thinking about consumers to co‐creators of value; the shift from thinking about value chains to value networks; the shift from thinking about product value to network value; the shift from thinking about simple co‐operation o...

Evolving From Value Chain to Value Grid

Abstract: The term ?value chain? suggests an orderly progression of activities that allows managers to formulate profitable strategies and coordinate operations with suppliers and customers. Using examples from the telecom, pharmaceutical, steel and auto industries, the authors argue for a more complex view of value ? one that is represented by a ?value grid?. The grid approach allows firms to move beyond their industry lines to identify opportunities and threats. It pushes managers to understand the power balance between suppliers and manufacturers. The new pathways to value can be vertical (as firms explore opportunities upstream or downstream from the adjacent tiers in their value chain); horizontal (as firms identify opportunities from spanning similar tiers in multiple value chains); and even diagonal (as firms look more integratively across value chains and tiers for prospects to enhance performance and mitigate risk).

Unpicking the meaning of value in key account management

Abstract: Purpose – This article aims to build on existing literature on value and proposes new perspectives and facets of relational value in key account management (KAM).Design/methodology/approach – Building on traditional value perspectives, value in KAM is conceptually deconstructed and linked with strategic value approaches.Findings – The article finds that a multifaceted key account value perspective includes three different types of value: exchange value, proprietary value, and relational value. Depending on the type of value constellation within a KAM relationship, a number of distinct key account value strategies are presented and discussed.Originality/value – The article provides an innovative concept of value in strategically important business‐to‐business relationships. Based on this, several strategic implications regarding the management of value are derived which enable further empirical research and a more nuanced managerial approach towards KAM.

Which Came First, IT or Productivity? The Virtuous Cycle of Investment and Use in Enterprise Systems

Abstract: While it is now well established that IT intensive firms are more productive, a critical question remains: Does IT cause productivity or are productive firms simply willing to spend more on IT? We address this question by examining the productivity and performance effects of enterprise systems investments in a uniquely detailed and comprehensive data set of 623 large, public U.S. firms. The data represent all U.S. customers of a large vendor during 1998–2005 and include the vendor’s three main enterprise system suites: Enterprise Resource Planning (ERP), Supply Chain Management (SCM), and Customer Relationship Management (CRM). A particular benefit of our data is that they distinguish the purchase of enterprise systems from their installation and use. Since enterprise systems often take years to implement, firm performance at the time of purchase often differs markedly from performance after the systems “go live.” Specifically, in our ERP data, we find that purchase events are uncorrelated with performance while go-live events are positively correlated. This indicates that the use of ERP systems actually causes performance gains rather than strong performance driving the purchase of ERP. In contrast, for SCM and CRM, we find that performance is correlated with both purchase and golive events. Because SCM and CRM are installed after ERP, these results imply that firms that experience performance gains from ERP go on to purchase SCM and CRM. Our results are robust against several alternative explanations and specifications and suggest that a causal relationship between ERP and performance triggers additional IT adoption in firms that derive value from their initial investment. These results provide an explanation of simultaneity in IT value research that fits with rational economic decision-making: Firms that successfully implement IT, react by investing in more IT. Our work suggests replacing “either-or” views of causality with a positive feedback loop conceptualization in which successful IT investments initiate a “virtuous cycle” of investment and gain. Our work also reveals other important estimation issues that can help researchers identify relationships between IT and business value.

Balancing customer and network value in business models for mobile services

Abstract: Designing business models for mobile services is complex. A business model can be seen as a blueprint of four interrelated components: service offering, technical architecture, and organisational and financial arrangements. In this paper the connections among these components are explored by analysing the critical design issues in business models for mobile services, e.g., targeting and branding in the service domain, security and quality of service in the technology domain, network governance in the organisation domain, and revenue sharing in the finance domain. A causal framework is developed linking these critical design issues to expected customer value and expected network value, and hence, to business model viability.

The business value of information technology and inputs substitution: the productivity paradox revisited

Abstract: The business value of information technology (IT) is an extremely important but highly controversial issue that has sparked a great deal of research during the past two decades. Closely related to the issue are the productivity paradox of information systems and the substitutability of IT stock for both traditional capital and labor. Numerous studies have been undertaken to either explain or dispel the paradox. This paper represents one significant extension to previous work and is a further effort to jointly investigate the business value issue, the paradox, and the potential of the substitution between IT capital and ordinary capital and labor, by estimating the IT business value in terms of the impact of IT on technical efficiency, based on the constant elasticity of substitution (known as CES) stochastic production frontier model, at three levels: firm, industry, and sector. The major findings include: the relationship between technical efficiency and IT investment is not robust with respect to the specifications of production frontiers; the productivity paradox is still existent, inconsistent with conventional wisdom, IT has substantial impacts on the five parameters associated with the CES production process; IT stock, traditional capital, and traditional labor are not pairwise substitutable; IT stock appears to be as important as capital, but it is not possible to use IT stock to replace the role of labor entirely; decreasing returns to scale are found irrespective of the levels of IT investments, and technical efficiency tends to decrease as IT investments increase; the industry-level analysis suggests that IT capital is more important for the services industries than for the manufacturing industries; and the sector analysis seems to indicate that the services sector is just slightly less technically efficient than the manufacturing sector.

Systems Design, Process Performance, and Economic Outcomes in International Banking

Abstract: Information technology (IT) value remains a serious concern of management today, especially how it should be measured and how it is created. Although we have made significant progress at the firm and aggregate levels of analysis, process-level analysis is still in its infancy, and there is a need for a systematic basis for identifying IT effects. We provide such an approach by developing two models: a process performance model of how system characteristics enhance process output and quality and an economic performance model linking process performance to the economic performance of the firm. We apply these models to global trade services in international banking. We obtained estimates for key variables in both models and general support for the approach. We interpret our results and discuss the merits of the process-level approach for the assessment of IT-reliant work systems.

Witten IH, Frank E: Data Mining: Practical Machine Learning Tools and Techniques 2nd edition

Abstract: In the early 1990s some sectors of the computer science community were developing the idea of data understanding as a discovery-driven, systematic and iterative process. This "data mining" research and development area was expected to take advantage of the expansion and consolidation of machine learning methodologies together with the integration of traditional statistical analysis and database management strategies. The main goal was to identify relevant, interesting and potentially novel informational patterns and relationships in large data sets to support decision making and knowledge discovery. In the mid 1990s developers and users of decision-making support systems in areas such as finance (e.g. credit approval and fraud detection applications), marketing and sales analysis (e.g. shopping patterns and sales prediction) were showing a great deal of enthusiasm about the business value of data mining applications. During the next few years international conferences, journals and books were more frequently reporting advances, tools and applications in other areas such as biomedical informatics, engineering, physics, law enforcement and agriculture. Today data mining is seen as a discipline or paradigm that actively aids in the development of these and other scientific areas (e.g. Web-based computing and systems biology).

Service Orientation: Winning Strategies and Best Practices

Abstract: Foreword Preface Acknowledgements Acronyms and abbreviations Part I. Overview: 1. Basics of service-orientation 2. Execution management 3. Business process management Part II. Business Architecture: 4. Service-oriented process redesign 5. Gleaning business value 6. Achieving business agility Part III. Service-oriented architecture: 7. Service-oriented architecture themes 8. Service-oriented architecture policy 9. Service design 10. QoS infrastructure design Part IV. Service-Oriented Management: 11. The big picture 12. Service-level agreements 13. Cultural factors Part V. Case Studies: 14. Queensland Transport: a case study in service-orientation 15. Credit Suisse: a case study in service-orientation References Useful sources of information.