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E-Business Transformation: The Taiwan Experiment Su-Houn Vandy Liu Chung-Yuan Christian University

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Presentation on theme: "E-Business Transformation: The Taiwan Experiment Su-Houn Vandy Liu Chung-Yuan Christian University"— Presentation transcript:

1 E-Business Transformation: The Taiwan Experiment Su-Houn Vandy Liu Chung-Yuan Christian University

2 Where is Taiwan ?

3 Topics Information service as a core Delivery Value and Value Proposition e-Business Strategy Business Model Development Operation issues in e-Business Business Re-engineering Internet as a Tool for Digital Opportunity Looking for the Future

4 Information service as a core delivery What is ICT –Internet, Wireless network, Digital Phone… When she is making a phone call ! –Your wife used to say: Is Mr. Liu still there ? –Now she says: Where are you ? –She will says: Why are you there ? OK! Husbands will have a miserable life because of the ICT development. –But, So What ! ICTs not only make change to those who make use of them –ICTs are changing your world

5 Business as usual ? May be not ! –We are frogs in a heating water Selling of CD records hit its historical low –Almost 50% sells has disappeared –Must be someone has stolen from us Why people still want to buy CDs ?

6 eBusiness Transformation? Business 1.0 –A Me Too Enterprise –Protected by geographic barriers –Always try to keep their competitors away from them

7 eBusiness Transformation? Business 1.0 –A Me Too Enterprise –Protected by geographic barriers –Always try to keep their competitors away from them Business 2.0 –An Enterprise that is Unique –Protected by its competence or resources –Always try to cluster with their competitors to create the Network Effect Only 72 Baguettes per day

8 Value and Value Proposition Selling Your Cake on the Net

9 Eslite Book Store Its Myth and Mystery Buy books from Eslite is more expensive Eslite encourage their customers to read their books in the store Most Eslite stores locate in districts that were considered too expensive for a book store to survive But, Eslite is the most profitable chained bookstore in Taiwan Whats the difference ? The Worlds Biggest Bookstore : Eslite Books

10 Eslite Book Store e-business is a chain-reaction that cause a co- evolution Traditional Book Store

11 Value Proposition Ladies never ever buy any cosmetics –They are buying their beauty and youthhood Customers Business Model Businessman FeedBack Satisfy Implement Recognize Create Deliver Value Proposition

12 Value Proposition Value proposition for bookstores –In Traditional Bookstores, they say: We sell books –We are Distribution Channel –In Eslite Books, it says We also provide relaxation –In an elegant but cheaper way Customers Business Model Businessman FeedBack Satisfy Implement Recognize Create Deliver Value Proposition Books + Relaxation

13 e-Business Strategy Conducting Business Transactions through the Internet and the Web The nature of the transaction ! –Value Creation ProducerRetailerCustomer

14 14 The case from Taiwans garment industry Nan-Wei Textile & Garment is a famous Taiwanese garment manufacturer. Nan-Wei received orders from Wal-Mart and other garment sellers from US and other developed country Nan-Wei invest garment factory globally, including China, Mexico and even Swaziland in Africa Orders manufacturing on certain garment factories (e.g. Taiwan) can delivered quicker than other factories Orders manufacturing on certain garment factories (e.g. Swaziland) can be cheaper than other factories No factory (even China) can be both quick and cheap What is the customers really want ? Quick Delivery or Cost-Down ?

15 15 Global Logistic System in Nan-Wei Nan-Wei Competes Globally with Information Technology Nan-Weis Global Logistic System? Factories Wal-Mart Nan-Wei Production Schedule Working Orders Shipper Delivery Orders Delivery

16 Change Your Business Model What is a Business Model –A broad plan for what products or services a company plans to sell and how it plans to earn its revenue –A way to fulfill your value propositions and earn your profit.

17 Reducing error and improving quality Advantech Advantech is one of the leader of the industrial computer industry. Over one million industrial computers installed all over the world make maintenance a nightmare for Advantech and its sales partners Can we build up a configuration DB for those industrial computers Since we are selling these ind. computers, we have to deal with their users.

18 Advantech After Advantech implemented its global configuration DB, their sales partners always complained the record is not correct. But, those record are inputted by sales partners themselves How to convince them to maintained the record ? Maintenance parts inventory should be Advantechs responsibility Service charges will punish those sales partners that fail to maintain accurate configuration record

19 Advantech With accurate configuration DB A Structured Relationship was developed –Customer-centric –ePlatform service provider Active Service –Effective Preventive Maintenance –New Product Marketing

20 Advantech 2006, Business Weekly Names Advantech Second in "Best 100 Companies in Transformation" Advantech has actively transformed its brand image, from Your ePlatform Partner to Trusted ePlatform Services. Corp. Mission, 2006 –Advantech will no longer limit itself to simply being a hardware provider, but will offer integrated solutions and services, in order to nurture long-term partnerships with all its customers.

21 Operation issues in e-Business

22 Increasing speed of business Taiwan Direct Shipment Taiwans Notebook PC Industry –Overseas Buyers (Brand) Dell, HP, IBM (Lenovo), NEC, SONY … –Taiwan Companies (OEM Manufacturer) Quanta, FIC, ACER, Asus, Delta…

23 What is Taiwan Direct Shipment Dell want to skip the physical flow. And concentrate on the information flow DELL Quanta Computer End Customers Information Shipment

24 What is Taiwan Direct Shipment 95-5 Project –95% of the TDS order delivered in 5 days Project –98% of the TDS order delivered in 3 days with 0% defect DELL Quanta Computer End Customers Information Shipment TDS

25 Business Process for TDS Project Objectives –Increasing speed of business Information transparency –All partners in the TDS must know what it should know instantly –Hierarchy- Clan -Market –Auto dispatching the information –Item number interchange Digital nerve system

26 TDS Hub Eliminate unnecessary sequential jobs Quanta Dell TDS Hub Bank Suppliers Customers Logistic Parties

27 Partnership Process for TDS An fulfillment plan was generated after an order was entered the TDS system Every partner have to guarantee its job will be finished on time –Available TO Promise (ATP) –Express delivery Monitoring system –fulfillment plan work as a baseline for the monitoring system –Any bias will cause an alarm and request for amendment

28 System Architecture for TDS

29 29 Business Process Re-engineering Why we want to change our business process ? –Because it is not serving your customer Customer-Centric Vs. Product-Centric –Because it is serving the wrong customer You treat your bad customer too good But treat your good customer badly –Because the way you are doing is not efficient It cost you too much but the customer still un-satisfy

30 30 Fortune Motors Customers want to save their money on car repair SO Fortune Motor install a centralized car repairing factory on suburban of Taipei It can be cheaper because the economic of scale But eventually fail to compete with small repair shop located in downtown Because they are more convenience Too bad…

31 31 Fortune Motors We now provide truly reliable car repairing –With prompted service Strategic partners –They used to be a car washer who clean up your car for you –Now they will take care of your car for you –You can sure that you car will be ready before you need it –It is reliable and convenience with no extra charges

32 Internet as a Tool for Digital Opportunity Enabling hundreds of thousands of Taiwan micro businesses to use the internet and e-commerce in their business operations. Although broadband internet penetration has reached most rural areas, most of these micro businesses are still not active or sophisticated users of information technology and the internet compared to larger businesses. The project has staged a nationwide campaign to significantly bridge the digital divide to these underprivileged SMEs.

33 Taiwans SMEs and their Roles in Our Society 1.1 million strong, SMEs constitute 90% of all businesses in Taiwan. 800,000 (73%) are micro-enterprises, employing 20 or less people. A total of 6 million people are employed by SMEs, working an average of 10 or more hours a day. Taiwan SMEs are known for their ability to quickly respond to market changes and seize new opportunities. Just like the hummingbirds that working for pollination, our SMEs is also a critical enabler in our economic eco system. They have to works very hard to take flight and must constantly seek out sustenance to support its fast pace and development.

34 E-business Transformation Strategy for the SMEs Link up with local resources Collaborate with Private Groups Lifelong and Full Function Support Target on the Mission Critical Application Incubating for the Growth and Development of SMEs Clusters and Communities

35 Incubating Oriented Building a Platform for Enterprise Start-up and Incubation to support entrepreneurial activity and innovation SMEs should be in charge of their own project BGO sell cosmetics through internet 80% come from overseas Chinese Smart guys! Right?

36 Incubating Oriented In Taiwan, you can buy a bike from a bike shop cheaper then from the Internet ? Hows this possible ?

37 Target on the Mission Critical Application They are NOT ready! So Get them ready first –They will never get ready Demand Driven Vs. Supply Driven –Learning by Doing Marketing is a Communication process –Internet is a new communication channel –SMEs need to know more about communicate with others through the Internet ?

38 Marketing by Story Telling Khun-pin was one of the most unlikely movie stars of 2005 in Taiwan. Along with his costars--his wife, two other farmers and a water buffalo--Ng acts exactly as he lives. The septuagenarian rice farmer goes through his days in Tainan County's Houbi Township for the production of their film The Last Rice Farmers (2005). The Chinese version of the unexpected hit literally translates to "no rice, be happy," a name derived from Ng's even-keeled outlook on the uncertainty of the harvest.

39 Then, on 2006 Uncle Khun-pin win on the national rice contest of Taiwan His rice sell NT$100,000 per Kg on an auction held after the contest Uncle Khun-pin donate all his NT$1,000,000 bonus

40 A new industry was build after…

41 Clusters and Communities In its second phase from 2008 to The project focuses on creating more "digital clusters" among Local SMEs. A digital cluster means 10 or more SME in the vicinity of a community join together to own and operate a shared website to promote their product and services in the cyber market.

42 Clusters and Communities Industry-Specific e-Commerce Project

43 Clusters and Communities SME Supply Chain Management Integration Project

44 Lifelong and Full Function Support SME Online University –the largest e-learning website in Asia Courses: 988 Members: 372,419 Attendees: million Visitors: 8.84million 24T1 broadband lines 36Mbps data burst 457 simultaneous online users 8000Gb space Learning Platform 1,122 new members 26,696 members took classes 75,890 visitors 210,107 page views Recent Weeks Figures 44

45 Lifelong and Full Function Support Digital Clusters and e-Communities –Virtual Community –Information Center –e Marketplace

46 Lifelong and Full Function Support SME Service Network Mechanism 23 Local Service Centers Center / Local Associations Entrepreneur Volunteers Bank Service Centers Virtual Internet Service One-Stop Solution Center

47 Link up with local resources The project recruited about 1000 local IT companies supervised by 12 task forces to deploy the information technology to those targeted micro businesses. More than 450 community groups have been mobilized to facilitate the our projects

48 Collaborate with Private Groups Green Product Supply Chain Knowledge Network 1 66% suppliers increased manufacturing quality66% suppliers increased manufacturing quality Each supplier increased manufacturing quality of 44.46%Each supplier increased manufacturing quality of 44.46% 2 24% suppliers reduced cost24% suppliers reduced cost Each supplier reduced cost of NT$926K averagely,Each supplier reduced cost of NT$926K averagely, and reduced NT$116M in total 3 19% suppliers increased manufacturing ability19% suppliers increased manufacturing ability each supplier increased manufacturing ability of NT$1390K, and increased NT$139M in totaleach supplier increased manufacturing ability of NT$1390K, and increased NT$139M in total 4 37% suppliers increased product delivery on time37% suppliers increased product delivery on time Each supplier increased product delivery on time of 33.65%Each supplier increased product delivery on time of 33.65% 5 19% suppliers increased revenue19% suppliers increased revenue Each supplier increased revenue of NT$1710K averagely, andEach supplier increased revenue of NT$1710K averagely, and increased NT$171M in total 6 25% suppliers increased revenue growth25% suppliers increased revenue growth Each supplier increased revenue growth of 16% averagelyEach supplier increased revenue growth of 16% averagely

49 49 Collaborate with Private Groups OK Convenience Stores Company e-Learning 2.0 solutions –such as podcasting and mobile learning to fast identify experts Results –Increase the revenue of new promotion and pre-sale

50 Looking for the Future The time when we are all cyborgs (cybernetic organisms)

51 The time when we are all cyborgs Smart Phone

52 The time when we are all cyborgs Cloud Computing

53 Looking for the Future

54

55 Thank you for your attention Su-Houn Vandy Liu Chung-Yuan Christian University


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