Pacific Coast Research, Inc.

"Putting Intelligence into

Business Intelligence"

 

Sound bits from us and about our work, ideas, insights and success stories.

 

Benefits of Models and Metrics Go Beyond a Single Project

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In an interview with SAP INFO one and a half years ago, Prof. Schlueter Langdon from the Center for Telecom Management at the University of Southern California (USC) explained why the development of models and metrics (M&Ms) was important for companies’ IT strategies. His institute was involved in pioneering projects focusing on interactive television, retailer portals, Web communities, and Internet service providers. SAP INFO online now wanted to find out the extent to which companies can benefit from using M&Ms.

 

Urbach, R.  2007.  Interview with Chris Schlueter Langdon: Benefits of Models & Metrics.  SAP Info  (January 31) [electronic document] (accessed 01/31/07); available at www.sap.com.


M&M's for CIOs

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When Professor Chris Schlueter Langdon talks about M&Ms, he doesn't mean candy. According to the research scientist at the Center for Telecom Management, University of Southern California, models and metrics are crucial to the success of service-oriented architectures (SOAs). Beyond allowing IT capabilities to be closely aligned with business, they clarify business value added and facilitate better strategic decisions.

 

Schewe, K.  2005.  IT Strategy: M&Ms (models & metrics) for CIOs – Clearly measuring performance and potential.  SAP Innovation  130: 53-54.

Economics of Sharing

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"There's an economic interest within companies in sharing knowledge," adds Chris Langdon, professor at the Marshall School of Business at the University of Southern California. "It works the same way as the initiative in the automotive industry to use the same parts in many different car models. You avoid reinventing the wheel and thus both cut cost and increase quality.“ [...]

 

Zetlin, M. 2004. "Making the Right Connection." Profit Magazine, Cover Story (May), available at http://www.oracle.com/oramag/profit/ (accessed 04/29/04).

"Softwarization" - How to win in the 21st Century

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"Value-added is constantly being shifted into or embedded in software, with mature areas obviously becoming commoditized. [...] We might call it "softwarization.“ […]

As Michael Porter argues, "[Business] activities are the basic unit of competitive advantage." As these activities get automated using software, top management's attention should shift to information systems architecture design.“

 

Schlueter Langdon, C. 2003. "Does IT Matter? An HBR Debate--Letter from Chris Schlueter Langdon." Harvard Business Review (June): 16 [electronic document], available at http://www.hbr.org (accessed 06/06/03).

Data Economics

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Experts agree, however, that creating a single a source of truth is only the beginning. "You also need to determine what is of interest in the data and then use other components such as search and analytical capabilities to take full advantage of the data," says Chris Schlueter Langdon […]. "And that requires an understanding of the underlying transactions and how they interact with other elements.“ […]

"I always insist that companies look at ROI […]," says Schlueter Langdon. “[…] ROI is only as good as the assumptions being made."

 

Fickel, L. 2002. "Manufacturing Profits--How data storage giant EMC laps the competition." Profit Magazine (May), available at http://www.oracle.com/oramag/profit/ (accessed 06/06/02).

Benefiting from Business Networks and Economies of Scope

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"Neben der potentiellen Transaktionskostensenkung bietet die Internet-Technik noch weitere strategische Vorteile [...]. Es erlaubt im besonderen Maß die Schaffung von Verbundvorteilen. Diese Kategorie von Vorteilen könnte sogar ein Kennzeichen der ,,New Economy" sein, im Gegensatz zu Größenvorteilen, die die Industrialisierung und ihre Industriestruktur und Lieferantenbeziehungen prägen. [...]

 

Ein Beispiel für horizontale Verbundvorteile sind Kundenakquisitions- kosteneinsparungen, die sich zum Beispiel der Internet-Händler Amazon durch horizontale Integration über vertikale Märkte, wie Bücher und Musik-CDs, gesichert hat. [...]

 

Schlueter Langdon, C. 2001. "Elektronische Märkte und Netze ändern Industriestrukturen [Electronic Markets and Networks Change Industry Structures]." Frankfurter Allgemeine Zeitung (January 11): 23.

Defending Market Share

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"There are a number of problems in the ISP business. Margins are very thin, and you have the major threat of free ISPs. How do you compete with a competitor that is essentially giving away the product for free?"  One answer, says the USC professor [Chris S. Langdon], is to differentiate yourself and cut customer acquisition costs.

 

Griffin, C.E. 2000. "Wellpoint-Earthlink Deal to Aid Brokers, Customers." San Fernando Valley Business Journal (November 13): 16.

Software = The Factory of the 21st Century

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"In electronic commerce, information technology or software code is the factory."

 

Schlueter Langdon, C.  2000. "The New Intermediaries--The Digital Transformation Of Industry." Marshall Magazine (Spring): 52-53.

Service Provider Turned Software Vendors and Content Intermediation

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"Hersteller von Websoftware und Komponenten oder "Plug-ins" wie RealNetworks (www.realnetworks.com) oder Liquidaudio (www.liquidaudio.com) könnten dem Vorbild der Softwarehersteller Netscape und Microsoft folgen und ihre Websites in ein Unterhaltungs- und Verkaufsmedium verwandeln, um ihre Formate als Standards etablieren zu können.

 

Schlueter Langdon, C. 1998. "Der nächste Shop is nur ein Klick weiter." Handelsblatt (November 17): 48.

1-To-1 Marketing and Cross-Selling Strategies

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Metro, Europe's largest retailer with group 1996 sales of 85 billion marks, in September launched a cut-rate Internet service provider, Metronet Kommunikationsdienste GmbH, located at www.metro.de. This service offers unlimited Net access for 9.99 marks a month and so far has more than 100,000 subscribers. Next Metronet plans to develop an on-line "Shoppers Universe"[...]

 

Pentz, M. 1997. "Will My World Go Worldwide?" The Wall Street Journal (June 2), available at http://www.wsj.com (accessed 6/17/97).

From a Packaged Goods Business Model to a Utility Subscription Model

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"Neue Technologie und Dienste wie z.B. die automatische Aktualisierung von Software über das Internet durch Firmen wie 'Oil Change' könnten das Verkaufen von Software in ein Abonnenten- und Dienstleistungsgeschäft verwandeln."

 

Schlueter, C., 1996, "Informationen aus der Steckdose."  Handelsblatt (Dezember 18): B3.

Online Competition

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"Die Gründerjahre sind vorbei, konstatiert Christoph Schlueter, Online-Experte bei Andersen Consulting. Jetzt mischen die Großkonzerne aus der Verlags-, Computer- und Telekommunikationsbranche mit und teilen sich die Märkte auf."

 

Palass, B., and A. Preissner. 1995. "PC Goes Shopping." Manager Magazin (Mai): 88-98, 94.

"Utility Computing"

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"Der Auslöser der Informations-Revolution, erklärt Schlueter, sei das Auftauchen einer neuen "Utility"--vergleichbar mit Elektrizität, Gas, Wasser oder Telefon. - Nicht einen, sondern verschiedene Information-Highways wird es geben. - Die wirklich großen Veränderungen, so Schlueter, wird es aber aus der Überwindung von Raum und Zeit geben [anstatt durch Multimedia]."

 

Eicker, A. 1995. "Urknall im Infokosmos."  Handelsblatt (April 13): K3.