Understanding Crowdsourcing

Organisations increasingly outsource activities to volunteers that they approach via an open call on the internet. The phenomenon is called ‘crowd sourcing’ and Irma Borst defended her PhD thesis about crowdsourcing successfully at Erasmus University.

For an effective use of crowd sourcing,it is important to understand what motivates these online volunteers and what the influence of a reward system is. In her PhD dissertation entitled Understanding Crowdsourcing: Effects of motivation and rewards on participation and performance in voluntary online activities, Irma Borst examines the effects of motivation and rewards on the participation and performance of online community members. She studied motivation, rewards and contributions in three crowdsourcing initiatives that vary in reward systems.

Her research shows that persons that are mainly driven by intrinsic motivations are the best performers in absence of rewards. Still rewards can be an effective tool for firms using crowd sourcing since the proportion of mainly intrinsic motivated people is low. So although individual performance decrease when providing rewards, group performance is increasing. The results also show that effects of financial rewards, differ from reputation rewards. And finally, she showed that effects of extreme money rewards, disturb generally positive effects of motivation on behaviour.

The findings of the three studies have resulted in a refined model of the effects of rewards and motivation on voluntary behaviour. The results described in this dissertation also have important implications for organisers of online communities, amongst others, regarding the effective application of reward systems. Borst also provides a crowd sourcing typology based on their reward systems and she identifies the motivation profiles of optimal performers per crowd sourcing type.

You can download her thesis here.

Erasmus@Work receives the ERIM Impact Award 2010

It was great that our research group of Erasmus@Work received the ERIM Impact Award 2010 during the ERIM award ceremony at the Faculty Club of Erasmus University. This award is presented to researchers who have made a significant contribution to improving the impact of academic research on the practice of management.The award-winning project was selected by a committee consisting of Drs. Jacqueline Tammenoms Bakker (Non-Executive Director of Tesco PLC), Drs. Maria Molenaar (former Board Member Rijnland Zorggroep), and Dr. Vincent Kouwenhoven (Founder and Managing Director eVentures). We thank the committee and Erasmus Research Institute of Management (ERIM) for this award.

Transition in IT Outsourcing

Vinay Tiwari finished his PhD research successfully by defending his PhD thesis on "Transition Process and Performance in IT Outsourcing".

He proposes two important suggestions.

1. The transition process in IT ousourcing will necessarily proceed in three sequential and conjunctive phases: transfer, adapt, and routinize.

2. One can shorten transition duration by chosing routines-based transfer mechanisms (like observation) and codification practices (i.e. using templates and interactive document reviews).

This dissertation is one of the first in the world that is using laboratory experiments in the context of IT outsourcing.

You can download his PhD thesis here.

Business Agility and IT

Marcel van Oosterhout defended his dissertation on Business Agility and IT in Service Organizations. His main claim is that in many service organizations business agility performance is hampered by information technology.

His empirical research shows the importance of (i) aligning sensing, responding and learning capabilities among each other and (ii) aligning IT capabilities with business capabilities.

His research results will have a profound impact on the next generation Enterprise Resource Planning (ERP) systems.

Hello Agile; Bye Bye Old IT.

You can download and read his PhD thesis here.

Erasmus@Work

There is an enormous interest in our research about new ways of working and its impact on individual and organizational performance.

Our research programme Erasmus@Work will be the platform for exchanging ideas and results.

Our work was presented at Microsoft's New World of Business Event, May 26 2010 in Amsterdam.

Our research was reported at Austrian TV ORF2 - see the TV clip;
Der Standard in Austria - see the article;
The Irish Times - see the article;
The Computer Weekly in the UK - see the article;
The IT New in Slovakia - see the article.

A short overview of our research was presented in RSM Insight, see the article.

ICIS 2009

The International Conference on Information Systems (ICIS) was celebrating its 30th Anniversary, December 15-18, Phoenix.

Our research group was very active. Vinay Tiwari was participating in the ICIS doctoral consortium, Meditya Wasesa was presenting a poster at Web2009 (and won the best poster paper award), Ting Li was runner up in the best ICIS doctoral dissertation, Diederik van Liere was presenting his work at ICIS on open source, Wolf Ketter was presenting and chairing sessions at Web2009 and WITS, Peter van Baalen and I were presenting our work at the IFIP 9.2 workshop.

On Wednesday December 16 we hosted the CBS/HSE/RSM reception. The reception was a great success and very well received by our colleagues from around the world.

This year I helped as track co-chair - together with Bruce Weber (London Business School) and DJ Wu (Georgia Tech) - to handle the largest ICIS track: Information Systems and Economics. Thanks to our 34 associate editors we were able to select the best papers out of the 58 submissions.

Bruce, DJ and I also organized a panel discussion at ICIS: Are we WISE about sub-fields in IS?

We were very happy that our very distinguished colleagues Yannis Bakos, Erik Brynjolfsson, Eric Clemons, Rob Kauffman, Avi Seidmann, Sandra Slaughter, and Andy Whinston accepted our invitation and shared their views with the ICIS community.
The short presentations and discussions were excellent.

My take aways:

1. WISE as sub-field is strong and for the IS field important. It is linking the economics field with the IS field and is different from most of the other 25 pre-ICIS workshops.

2. The IS field needs to promote its high quality research to the outside world (other scientific disciplines and to the business world).

3. The new wave of very detailed personal data (from social network sites, smart card usage, RFID use, etc) will developed new theoretical insights about all kinds of decisions and will shape the IS field.

4. ICIS could be the umbrella organisation that will cover logistics, payment, hosting, etc for all the 25 workshops that will be hosted in one week.

WISE 2009

The Workshop on Information Systems and Economics (WISE) was celebrating its 20th Anniversary, December 14-15, 2009 in Phoenix (Arizona).

On December 3, 1989 the first Workshop was held at MIT Sloan School of Management in Cambridge, Massachusetts. Chris Kemerer (at that time at MIT) and Yannis Bakos (at that time at UC Irvine) were the organizers of the first workshop. They felt there was a need for (and here I quote from the first Call for Papers)“ a workshop addressing the use of theory and research methods from Economics to address theoretical and applied questions in the Information Systems discipline”. And there was a need. In these twenty years WISE sustained. It attracted 32 attendees 20 years ago and this week there were 134 attendees. This year we had excellent presentations and the workshop itself was extremely well organized by Yannis Bakos, Eric Clemons, Rob Kauffman, and Lorin Hitt. Thank you!

You can download the workshop program and papers here.

Carbon Credit Trading

The trading of carbon credits in Europe is a very promising instrument to cap the output of CO2 emissions. The European Union Emissions Trading Scheme (EU ETS) is a cap-and-trade system that has an absolute limit on covered emissions and rights to emit those emissions are conveyed by tradable permits (called European Union Allowances (EUAs)). These allowances are bought and sold via online auctions. Recent research by the MIT Joint Program on the Science and Policy of Global Change shows that the European Emission Trading Scheme is working successfully. Denny Ellerman and Barbara Buchner concluded in 2008 that - based on the first 2 years of the first trading period - CO2 emissions were about 3% lower than the allocated allowances.

Kindle

Kindle is the wireless reading device that Amazon is bringing on the US market.

As a fanatic reader (and with more time to read during my visiting scholarship at MIT) I recently bought the Kindle. The Kindle is wireless connected to the Amazon Kindle web site and in the US you can download books, newspapers, magazines, and blogs. For wireless downloading (only in the US yet) you need to have an US address and an US credit or debit card. The first experiences are very positive: great reading experience, easy to use, fast downloading, extra functionalities like the text-to-speech feature, the use of the dictionary, and the 9.99 dollar per book download. Let's see how I am going to use it the coming weeks. Keep you informed.

MIT Sloan CISR Summer Session

Great sessions and great interactions with an active group of CIOs and researchers during a series of five one-day workshops: that is the MIT Sloan CISR Summer Session 2009 (June 15-19, 2009). Five topics were discusssed: 1. IT Governance; 2. Enterprise Architecture; 3. IT Risk Management; 4. The IT Savvy Firm; and 5. IT-Enabled Change. Guest CIO speakers were: Diane Bryant (Intel); Yury Zaytsev (Swiss Re), Joe Antonellis (State Street), Per-Ake Tobiasson (Tetra Pak), and John Glaser (Partners Healthcare). CISR is the Center for Information Systems Research at MIT Sloan School of Management.

Standard Battles

Setting the standard is an important strategic asset. For example, if the Dutch would have been able to enforce the Dutch language to the rest of the world, for most of us it would be more difficult to communicate (unless you learned Dutch).

Fortunately for the non-Dutch, the Dutch are not able to do that anymore. (They had a chance around the 1640s - but decided to concentrate on the Dutch East India Company (and not the Dutch West India Company) and therefore lost control over Brazil in the Second Battle of Guararapes (1649) and later also lost control over Manhattan in 1664. Otherwise Brazil and the US would have spoken Dutch!

Geerten van de Kaa investigated Standards Battles for Complex Systems in the setting of home networks.

Home networks combine components and technologies from the consumer electronics industry, the information technology industry, the telecommunications industry, and the home automation industry. Irrespective of the fact that the home network has been technically possible for many years, it has not become a practical reality. A major reason is the lack of generally accepted common standards. In this dissertation we develop a framework with which we can explain and predict which standard will have the highest chance of achieving dominance. We applied the framework to several standards battles and it appeared that it can be used to explain these standards battles better, when compared to existing frameworks in the literature. We applied a multi-attribute utility approach to standard selection and provide a first indication of weights for factors. Also, we have studied two factors in depth: the diversity in the network of actors that support a standard; and the flexibility of the standard. We provide a first indication that these variables influence standard dominance positively and reinforce each other.

Risks, Real Options, and IT Projects

Project managers of IT projects are trying to find the right balance between analyzing risks and building flexibility in the project. Cokky Hilhorst did fundamenal research on this topic. She defended her dissertation "Reacting to Risks with Real Options: Valuation of Managerial Flexibility in IT Projects" very successfully at Tilburg University.

This dissertation investigates how managerial flexibility, as a response to risks, impacts IT project valuation. The dissertation attempts to answer this question by conducting three separate studies using a real options perspective. Firstly, we explore whether managerial flexibility in IT investment decisions is recognized in practice by conducting exploratory case study research. Secondly, we investigate how managerial flexibility in IT projects can be valued. We develop a theoretical decision-making model which deals with both financial and non-financial IT project valuation criteria and apply the model in a case study. Thirdly, we take a qualitative perspective on the management of managerial flexibility in relation to IT project risk. We empirically test the effects of specific risks on the valuation of real options in IT project decisions in an experimental setting. The primary contribution of this dissertation is to provide evidence that managers differentially assess the relative value of different types of options when controlling IT project risks. The relative value that IT professionals place on various real options is both driven by both the intrinsic real options value and by risk factors associated with an IT project. Their assessment generally follows real options-based risk management reasoning.

Theory of Informedness

New technologies such as mobile phones and smart cards provide more and detailed information about customers. Customers on the other hand are using web-technologies that enable them to get far detailed information about the offerings of firms. Ting Li defended in an excellent way her PhD dissertation entitled "Informedness and Customer-centric Revenue Management".

The dissertation proposes new theoretical perspectives – firm informedness, customer informedness, and informedness through learning – to re-conceptualize the decision making process of customer-centric revenue management. It consists of three studies. First, using multiple cases in which firms adopt smart cards and mobile technologies in America, Europe, and Asia, Ting Li examines the value creation process of the firm using the explanation of firm informedness and investigate how it advances revenue management. Second, she tests the theory of consumer informedness and examine heterogeneity in consumer preferences using stated choice experiments. She finds the evidence for trading down and trading out behavior and shows that the use of mobile ticketing technologies can help firms to build a hyper-differentiated transport market. Finally, using a computational simulation, Ting li explores the opportunity for devising service offerings to capture profitable consumer responses, considering demand-driven revenue and capacity-management. Overall, this research introduces methods, models, and guidelines for organizations to strategize the informational challenge, make informed decisions, and create transformational values to win in today’s competitive network environment.

ICIS 2008

Indeed it was a busy weekend. Around 1,400 people gathered in Paris for the 2008 International Conference on Information Systems (ICIS). Several great presentations and exciting panels (for example Design Science in IS, and IS Reserch and Education in the Post-industrial Economy) argument the need and urgence to transform the IS field in a profound way. I agree - let's move in a pro-active way.

My small contribution was to discuss three excellent teaching cases. A great teaching case has to be like Leonardo da Vinci's "Mona Lisa" painting: intriguing, well crafted, and provoking. The three teaching cases were:

Tracking Freight Railcars in Indian Railways: Technology Options and Stakeholder Interests by Srivastava, Shirish, HEC School of Management, Paris; Mathur, Sharat, Indian Railways; and Teo, Thompson S. H., National University of Singapore.

To Make or to Buy? Outsourcing Decisions at Zurich Cantonal Bank by Katharina Reinecke, Abraham Bernstein, and Stefanie Hauske, University of Zurich.

Indo Gives Its Sales Force New Mobility Technology by Sandra Sieber, IESE Business School.

We also organized on Monday December 15, 2008 the CBS-HSE-RSM reception in Hotel Le Meridien, see picture. Great to have colleagues from around the world at our reception.

WISE 2008

Great presentations and a great crowd. The Twentieth Workshop on Information Systems and Economics (WISE) with the program co-chairs Anindya Ghose, Geoffrey Parker, Arun Sundararajan, and Marshall Van Alstyne was held in Paris. The session I was asked to chair had four great presentations:

Ta-Wei Wang, Karthik Kannan and Jackie Rees. Investors Perceptions on Information Security Incidents

Atanu Lahiri, Rajiv Dewan and Marshall Freimer. On the Pricing of Wireless Services: Application Pricing versus Traffic Pricing

Ashish Agarwal, Pei-yu Chen and Tridas Mukhopadhyay. Beyond Simple Plug and Play: Theory of Alliances in the Software Industry

Mei Lin, Xuqing Ke and Andrew Whinston. Ad-Supported Duopoly Competition: Advertise Selectively?

Abstracts and papers can be downloaded here.

WeB 2008 In Paris

Both Andy Whinston (University of Texas), Vikas Krishna (IBM Almaden Research Center) and myself had the honor to held key notes at the very interesting pre-ICIS workshop WeB 2008 - this year in Paris.

Here is the summary of my talk.

The Value of Smart Business Networks: Experiments and Experiences

Abstract

Organizations are moving, or must move, from today’s relatively stable and slow-moving business networks to that open digital platform where business is conducted across a rapidly-formed network with anyone, anywhere, anytime despite different business processes and computer systems. The disadvantages and associated costs of the more traditional approaches are caused by the inability to provide relative complex, bundled, and fast delivered products and services. The potential of the new business network approach is to create these types of products and services with the help of combining business network insights with telecommunication capabilities.

The “business” is no longer a self-contained organization working together with closely coupled partners. It is a participant in a number of networks where it may lead or act together with others. The “network” takes additional layers of meaning – from the ICT infrastructures to the interactions between businesses and individuals. Rather than viewing the business as a sequential chain of events (a value chain), actors in a smart business network seek linkages that are novel and different creating remarkable, “better than usual” results.

In this presentation we discuss the latest research results undertaken by different actors in the Smart Business Network Initiative (SBNi). The results of experiments and experiences show that there are several critical capabilities that determine the value of smart business networks. We discuss three components. Firstly, the number of nodes that an actor can “see” from a specific position in the network is important. With a larger network horizon a company can take a more advantageous network position depending on the distribution of the network horizons across all actors and up to a certain saturation point. Secondly, the way that a business network has the ability to “rapidly pick, plug, and play” to configure rapidly to meet a specific objective, for example, to react to a customer order or an unexpected situation (for example dealing with emergencies). Quick connect and disconnect capabilities combined with product, service, and process modularization is crucial. Thirdly, the way flexible decision making is supported with a service-oriented architecture. With the help of business network dashboards managers are able to improve their strategic and operational decision making.

Online Reverse Auctions

Ulad Radkevitch defended on October 10, 2008 his PhD thesis entitled "Online Reverse Auctions for Procurement of Services".


Here follows the text of my "laudatio":

"It is a privilege for me to be the first one to congratulate you with your PhD degree. Ulad congratulations! And co-promotor Otto Koppius is joining me in congratulating you with this result. We are proud that you made an excellent contribution both to theory and practice resulting in not only a dissertation but also publications such as in Decision Support Systems.

You started your time at Erasmus Univeristy with an internship with professor Ron Lee. During that internship we met and we had a discussion about the pro’s and con’s of executing a PhD project. The result was that you applied in 2003 to the PhD project 'The Impact of Reverse Auctions in Business Networks'.

From the beginning you were happy with this topic and very focused – you had already yourself some experience about the role and impact of online reverse auctions. However, the beginning was not easy. Developing a coherent research proposal with a coherent conceptual framework was a struggle but the comments of the external reviewers were positive, helpful and rewarding. The result is an empirically coherent dissertation.

The first part of your thesis (chapter 2, 3 and 4) deals with in-depth analysis of transaction data of online marketplaces like eLance and RentaCoder. In your dissertation you write on page 84 'To extract data from the website of the online marketplace we used Kapow RoboSuite. A web extraction agent; Microsoft Excel and SPSS were employed at the stage of data processing and analysis'.

I know that this one liner does not fully reflect your enormous efforts to develop a very sophisticated agent system that extracted data from web sites. I remembered that during that period I walked into your office and that your computer was running day and night to get thousands of transactions from these markets. In total 14,086 events are analyzed in these three chapters (and that is just a selection of the data set you build). But you did not only build, test and run the software but also set up good relationships with the people of these markets for example with the founder of RentACoder.

The second part of your thesis the case study of a construction project in Amsterdam was also a challenge. Jan Siderius – founder of Negometrix suggested this case to analyse the impact of online reverse auctions in detail. It is one of the first studies that follow such a project in great detail and you did show that you are able to execute both quantitative and qualitative studies at a very high quality level. With the help of Wouter Vermeer you were able to cope with Dutch language barriers and the typical (sometimes) unwritten rules of the construction industry.

Doing research is important but also presenting research to the outside world is a critical aspect of PhD research. I think one of the highlights of your PhD project was the presentation at ICIS in Milwaukee in 2006. In preparing the presentation I remembered we had some very intense discussions ( I really had to act here as the tough supervisor) but your performance at ICIS was just great. Afterwards we enjoyed a beer tasting evening in one of the typical Milwaukee bars.

Otto Koppius and I have excellent memories about our discussions (ranging from topics such as the essence of Snir and Hitt’s work and how to do better; the design of a new bachelor course on IT outsourcing; or the impact of online reverse auctions on the performance of industries worldwide). But also about your cohesive role you played in our department as a socially conscious person; new faculty members were introduced by Ulad in the Rotterdam scene and other cities in Europe.

Overall, you have shown via hard work, discipline, and intellectual curiosity that you are now an independent thinker. That is a key asset in today’s world that is complex and volatile. I am sure you will use this asset in a wise way. All the best."

One can download Ulad's dissertation at the ERIM website.

PhD Top in Ireland

Put twenty-one very smart European PhD students in Information Systems together with six excellent faculty members in a remote area (in this case Oughterard in the Connemara area nearby Galway, Ireland) and you have a necessary and sufficient condition for a successful ECIS 2008 doctoral consortium.

Intense discussions about rigor and relevance of each of the twenty-one PhD projects and "how to manage your PhD project" were combined with a boat trip on the Corrib Lake, a GPS exercise to find a nearby Castle, and the well-known Irish pub hospitality .

Smart Business Networks in Beijing

Together with Tsinghua University in Beijing we organized the third Smart Business Network discovery event (May 18 - May 23, 2008). A great event - not only because our Chinese hosts surprised me with a giant birthday cake - but also because of the discussions among academics and business executives about the potential role of smart business networks.

For example a great Chinese example of an online auction market is Alibaba and they provided an excellent presentation during the event about their strategy and operations.

Mike Rothkopf

One of the best and most inspiring researchers of auctions is Mike Rothkopf. He passed away last February, see the in memoriam web site.

We have known Mike Rothkopf as an outstanding leader in the international research community: very inspiring for us and he motivated us a lot to understand and improve the functioning of auctions in a business context.

We invited Mike for Otto Koppius` PhD defence (May 2002) and Laura Rothkopf was joining him on their trip to the Netherlands. We showed them the Dutch flower auctions and Mike was amazed by the speed of the flower auctions and the complicated logistics and he was very happy to go into all the details.

We regularly discussed his and our auction research - usually at the annual INFORMS conferences. He inspired many researchers around the world and was a true leader in improving our field by creating research results that were conceptual outstanding and exceptional relevant for practice. For my own research, Mike's paper with Ron Harstad "Modeling Competitive Bidding: A Critical Essay" (Management Science 40, pp. 364-384, 1994) was a real stimulus for me to dive into the real world of auctions.

25 Years of Electronic Markets Research

At the ICIS conference in Montreal (December 10, 2007) Bruce Weber (LBS) and I organized a panel with Yannis Bakos (New York University), Thomas W. Malone (MIT), Robert I. Benjamin (Syracuse University), and Rolf T Wigand (University of Arkansas). Here is my welcome statement:

"It is an honor for me to welcome you to this panel with the topic “electronic markets: theory and evidence from twenty years of research”. Twenty years ago Tom Malone, Yoanne Yates, and Bob Benjamin wrote their very influential article “electronic markets and electronic hierarchies”. That article is a point of reference for most of us and after eighty-seven we came in a roller coaster called electronic markets – think of the early examples like Aucnet, think of the boom and bust of electronic markets makers around 2000, think about the giant successes of online auctioneers like eBay and Google.

In this panel we will look back to the roller coaster we were in the last 20 years and create a moment of reflection before we are heading for the next roller coaster (roller coaster 2.0 as we use to call it in our field). At my first ICIS in New York in 1991 people asked me what I was doing and I explained that my research was about electronic auctions with flowers and then most people would stare at me as if I was coming from Mars (I was actually coming from the Netherlands!). Nowadays electronic auctions are everywhere as the new routers in the packet-switching economy.

In this panel we ask ourselves some questions and here I will borrow from the Mars story of Herbert Simon in his 1991 paper “Organizations and Markets”. Simon said:
“Imagine a mythical visitor coming from Mars approaching the Earth with a telescope that reveals social structure (p.27). The firms are shown as solid green areas, market transaction are red lines connecting firms. No matter which economy our visitor approached, the green areas would be the dominant feature of the landscape”.

Related to the impact of IT our questions are: Did we see the last twenty years more dark green (electronic hierarchies) or more dark red lines (electronic markets).
And what could explain from a theoretical point of view the changes. And what is the next step?

So What in Sao Paulo

Invited by our business school partner FGV-EAESP I provided two workshops for the Information Systems PhD students in Sao Paulo (with 19 million people). We had great discussions about how to improve the "So What" question of your research. My "So What" presentation can be viewed here.
Sao Paulo City has the same high energy level as New York City, but you wonder why so many people nowadays move to these cities.

The Power of Information Markets

A great crowd - with a great view at the top of the Golden Tulip hotel overlooking the Erasmus bridge and the South of Rotterdam - was discussing with me the power of information markets. Professor Willem Verbeke invited me at the Knowledge Event of ISAM / Professional Capital. I presented the latest research about how these information markets are used in field experiments in practice and how these markets do aggregate information, see my presentation. At YouTube you can find a videoclip impression.

Hiking to the PhD Top!

Before the European Conference of Information Systems (ECIS 2007) I was invited for the ECIS doctoral consortium (DC) and had great discussions with PhD students from around Europe.

The DC - very well chaired and organized by professor Helmut Krcmar (TU Munchen) - was held at the Seealpsee nearby Wasserauen in Switzerland. The hinking tour was spectacular and showed the characteristics of a PhD journey.

Petal Power in The Economist

Interviewed by the Economist the merging of the two main flower auctions in the Netherlands is discussed, see Petal Power article. It is always difficult to communicate in "one liners" a complex topic that is critical for the flower industry of the Netherlands.

Here follows the questions that were asked and my answers.

Q. In particular, I am interested to know if you think the merger will indeed make the flower trading system more efficient, or if it is simply forestalling the inevitable development of a new, virtual trading system that will be inherently more efficient that any physical auction can be.

A by EvH. The proposed merger of the two largest Dutch Flower Auctions (FloraHolland and VBA) is a logical step into the direction of creating a larger electronic trading platform and lowering transaction costs in line with mergers in other industries such as the merger of NYSE and Euronext in the financial industry. Ajit Kambil and Eric van Heck, in their book Making Markets (Harvard Business School Press, 2002), have discussed that mergers allow market makers to realize economies of scale and better serve customers by giving them access to a wider range of products and trading opportunities, regardless of their location.

Indeed, the merger will give both auctions a greater scale, as well as larger operations and an extended customer base to share the fixed costs of future investments in technology, marketing and logistical operations. For buyers, the market efficiency in terms of finding the right product and the right seller via the Dutch auction system or the brokerage system will increase as well.

Q. The question is: will the effectiveness of the merged flower grower cooperative increase?

A. It is indeed critical to increase the service levels (in terms of quality and variety of flowers, delivery time, logistical costs, and the ability to react quickly to new customer demands (agility)) to their customers (wholesalers, retailers) and to the customers of their customers. Crucial are the implementation of smart logistical concepts and advanced information sharing with networked information systems among the different partners in the trading network.

Q. Do you think the latest developments in these systems will inevitably do away with physical auction clocks?

A. The transformation from marketplace to marketspace is not easy and is partly determined by the quality of the information that buyers can get out of the market. At the moment, most buyers get better information (about new products and the state of the market) when they are physically present in the auction halls. Improved digital information about the quality of flower products, the reputation of sellers, and the market state will however move buyers to the online trading platform. Physical auction clocks will stay (in the short run) but will be combined with online trading facilities. A hybrid model of offline and online combinations of different trading models (direct, broker, auction, reverse auction) will occur.

Q. And if so, is the merger a step in this direction?

A. The merger will indeed be a step into this direction. Important will be if the merged cooperative will be able to create the next level of customer service, logistical performance, and information architecture. Marketing, logistics, and information systems people have to work together to create the next generation trading platform.

The larger cooperative – every grower has one vote – might lead to better decisions (“the wisdom of the crowds”) but usually with larger groups the speed of decision making is going down.

The Singularity Is Near

I have read Ray Kurzweil's book "The Singularity Is Near". Impressive work in which he makes clear that the technology evolution (genetics, nanotechnology, robotics) is exponential. Supercomputers will match human brain capability by the end of this decade and personal computing will achieve it by around 2020. A key observation in the book is that information processes - computation - will ultimately drive everything that is important. Ray Kurzweil sets the date for the Singularity - representing a profound and disruptive transformation in human capability - as 2045. With regard to online auctions - following Ray Kurzweil's analysis - I think we will see online auction mechanism developed as coordination mechanisms among - for example - nanobots in human bodies. Information systems researchers, genetic researchers, and nanotechnology researchers that work together will come up with disruptive innovations.

PhD Research in Information Systems

Several great PhD researchers finished their dissertations the last few months. It was great to act as opponent.

Mario Duarte Canever at Wageningen University (my alma mater) defended his dissertation with the topic "From Fork to Farm - Demand Chain Management in the Agro-Food Business". He came up with a very interesting demand chain design framework with a first test in the Rio Grande do Sul Beef Business.

Erwin Fielt at Technical University Delft defended his dissertation with the title "Designing for Acceptance : Exchnange Design for Electronic Intermediaries". Erwin came up with a great theory of exchange design patterns.

Mohammed Ibrahim at Tilburg University defended his dissertation entitled "Trust, Dependence and Interorganizational Systems". He came up with the very interesting conceptualization of trust and dependence and empirically validated this new theory.

Thomas Acton at the National University of Ireland in Galway defended his dissertation with the title "Decision Support for Small Screen Information Systems". With the help of experiments Thomas showed that with the help of decision support tools that decision makers could compensate the effect of working with small screen systems such as PDA's. The "viva voce" examination in Galway was a very interesting experience.

Sanna Laukkanen at Helsinki School of Economics - see picture - defended her dissertation entitled "On the Role of Information Systems in Organization Integration: Observations and a Proposal for an Integrative Framework". She used very interesting survey and case studies to analyze the role of information systems and came up with a new theory to assess information systems as an integrative infrastructure. PhD defences in Finland are unique (they can take as long as 6 hours). I have asked 30 questions (somebody in the audience did the counting) and it took in total 2,5 hours. The discussion was excellent.

Portfolios of Exchange Relationships

During ICIS 2006 in Milwaukee (Dec 10 - 13, 2006) we presented our latest research on Portfolios of Exchange Relationships: An Empirical Investigation of an Online IT Marketplace for Small Firms .

With 1,200 participants and 132 presentations ICIS 2006 was very successsful. Thanks to the conference chair William Haseman and program co-chairs Detmar Straub and Stefan Klein. Great research and presentations and the HSE/RSM ICIS 2006 reception was well received.

Online Services Marketplaces

Our research was discussed in an article by Global Services written by Shyamanuja Das entitled Online Services Marketplaces.

Quote from the article:
“Online marketplaces have given the small buyers a place to go shopping for outsourcing services,” says Ulad Radkevitch, Research Scholar, Erasmus University, the Netherlands, and Co-author, Leveraging Offshore IT outsourcing by SMEs through Online Marketplaces — a research paper. Online marketplaces for IT services reduce costs of contact, contract and control for small buyers, argues Radkevitch in the research paper.

Online Flower Trading

Flower Auction Aalsmeer reported an explosive growth of their Online Remote Purchasing system called "Kopen op Afstand". By the end of 2006 around 150 million euro trade is executed via this online auction clock system, approx. 15 % of the total clock turnover. See Aalsmeer news.

Entry Barriers of Online Markets

At the Annual Informs Meeting 2006 (Pittsburgh, November 5-8, 2006) we presented our latest research on entry barriers. Our presentation The Effects of Supplier Entry Barriers on the Performance of Online Markets for IT Services was well received. We compared two online markets (one with high, the other with low entry barriers) and measured the impact on performance.

The Annual Informs Meeting had over 3,100 presentations with several great online auction tracks (around 85 presentations) all organised by Mike Rothkopf. Here you can search the program and sessions.

The Winner's Curse in IT Outsourcing

In November, 2006 Leslie Willcocks and Mary Lacity published their book Global Sourcing of Business and IT Services. The book provides an excellent overview of their research on the different aspects of sourcing.

One of the chapters includes the work by Thomas Kern, Leslie Willcocks, and Eric vanHeck on the Winner' s curse in IT Outsourcing (previously published as "The Winner's Curse in IT Outsourcing: Strategies for Avoiding Relational Trauma", California Management Review, 44 (2), pp. 47-69 .2002).

The Winner's Curse is an intrigueing phenomena: the winner ends up as the loser. In the article we analysed 85 IT outsourcing projects of which 31 projects had a negative impact on the client and 15 projects showed the Winner's curse characteristics. In total 12 projects were negative both for supplier and client and ended up in relational trauma. Lessons learned are provided that overcome these situations.

Theory and Practice of Information Markets

It was fun to be invited by the Helsinki School of Economics to discuss their new research program on the Information Economy. The seminar was held on a ferry between Helsinki and Stockholm (October 25/26/27, 2006). My presentation dealt with Theory and Practice of Information Markets. We discussed the research results and how these results can be applied in practice. On the way back from Stockholm to Helsinki we had some stormy weather, but we survived.

Online Procurement Auctions

The Seventh National Electronic Procurement Seminar was organized September 21, 2006 by the NEVI. There was a lot of interest in the results of the implementation of online auctions for procurement in different industry settings in the Netherlands. Companies such as KLM and Philips provided insights about how to creat value with online procurement auctions. My presentation about Online Procurement Auctions: Success for Buyers and Sellers dealt with different examples and key insights.

BPO as Strategic Partnering

Together with the Management Development Institute (MDI) in Gurgaon, India, we organized on August 24, 2006 a seminar on how to create successful relationships in business process outsourcing between European clients and Indian service providers. Several Indian service providers discussed how to deal with the European market and how to create win-win projects. Attached is the presentation BPO as Strategic Partnering of Prof. Saxena and Dr. Bharadwaj about the preliminary results of the MDI/RSM project. The project is sponsored by the European Union. For me it was the first time to visit India and although two days is short it provided me with some insights about the strenghts and weaknesses of the Indian economy.

Google Business Models

It was an honour to be invited as guest professor 2006 by the University of Munchen. One of the well-known online auction business models is Google. With a group of very dedicated students (related to the Center of Digital Technology & Management) different business models under development at Google Labs were analysed. The voting results with regard to the highest potential of the analysed Google Lab applications were as follows:

- Google Earth: 10 votes
- Google Talk: 3 votes
- Google Video: 2 votes
- Froogle: 2 votes
- Google Desktop: 1 vote
- Google Local for Mobile: 1 vote
- Google Pack: 1 vote

Total 20 votes

Also an interesting experience was that for the first time I was teaching a group where ALL had experience with online auctions (mostly eBay Germany).

Networks in Auctions

The bi-annual Smart Business Networks discovery event, June 14-16, 2006 was again very successful. Executives and scientists discussed the latest on smart business networks. What are critical smart components? What type of applications? What are excellent network strategies? How to develop the business operating system?

Ulad Radkevitch, Otto Koppius and I presented research on ego-networks (suppliers that all the time come back to buyers in auctions). Our empirical analysis comes up with a typology of ego-networks in auctions: small buyers, transactional buyers, relational (small) buyers, relational (large) buyers, and diversifiers. Here is the paper.

Who Will Be World Champion Soccer 2006?

Who Will Be the World Champion Soccer? That is the question that will be asked and discussed the coming weeks by millions (even billions) of people around the world. Will it be Brazil, Germany .... or even the Netherlands!

We would like to predict who will be the winner. One way of predicting is to use a prediction market. Prediction markets create the potential to aggregate information far better than traditional ways of information aggregation and forecasting. Prediction markets are so-called double auctions. Both buyers and sellers (therefore double) buy and sell their shares in auctions.

One of our students - Jérôme Martin - has created SoccerExchange. Here you trade Brazil shares or Germany shares and try to make some money by buying and selling these shares related to the question: Who Will Be The World Champion Soccer? So, let's trade.

Students Present Business Cases

Students in the Master Program of Business Information Management at RSM present May 17, 2006 their business cases for executives of Capgemini and Cordys at the Vanenburg Castle in Putten.
The presentations included a business plan and working prototypes of web based systems developed in the elective course Designing Web-based Systems. The winners - Maarten Fokkelman, Wilco Kuyper, Mohammed Tarrahi, and Zenobie Verkijk - came up with an excellent business plan including a detailed business web, a detailed cost/benefit analysis, and a great working prototype including links to advanced web services. See RSM%2019.JPG

Executive Program in Jakarta

In the Advanced Leadership Program at the Executive Center for Global Leadership (ECGL) in Jakarta critical IT Leadership issues are discussed with executives (Thursday May 4 - Saturday May 6, 2006). The following topics were discussed: strategy and the role of IT, business models, extending the enterprise to smart business networks, the next generetation IT infrastructure, IT investments portfolio approach, the role of the CIO, IT outsourcing and the winner's curse, managing IT projects.

The program is designed and executed by ECGL and RSM Erasmus University.

Presentations at ANU in Canberra

On Thursday April 27 and Friday April 28, 2006 I gave three presentations at the Australian National University (ANU) College of Business and Economics in Canberra for enthusiastic audiences.

The first presentation was a PhD workshop talking about So What, How, and Why of Information Systems Research. With PhD students from the School of Accountancy and Information Systems a lively discussion was undertaken about how to develop Information Systems Theory and the do's and don'ts of PhD research.

The second presentation dealt with the topic of Online Markets and the lessons learned from a decade of research in the Dutch flower industry. The presentation title was Moving to Online Markets.

The Q&A dealt with the role of proxi-bidding in online auctions, the role of logistics and transportations costs related to the bidding costs in the flower auctions, and the role of bundling and how it will have an influence on the optimal design of the distribution network.

The third presentation was about the Emergence of Smart Business Networks organized by the National Centre for Information Systems Research (NCISR).

Q&A dealt with the role of human decision making in the technology-enabled networks, the role of security and privacy in smart business networks, and how companies could share information in complicated network settings.

One of the participants - Tom Worthington - summarized my presentation very well at his web log.

The Beginning of the Beginning

This weblog will focus on the great subject of Online Auction Markets (OAMs). It will try to answer questions like

• what are online auction markets?
  
• what is so typical?
  
• why do these online auction markets exist anyway?
  
• why are online auctions - think about eBay and Google - so successful?
• what is the role of information and information technologies?
• how can you create value with online auction markets?
  

It will keep you up-to-date with a mixture of business, technology, and science.