Customer driven business model – connecting customer value to firm resources in ICT value networks

The objective of this thesis is to provide a business model framework that connects customer value to firm resources and explains the change logic of the business model. Strategic supply management and especially dynamic value network management as its scope, the dissertation is based on basic economic theories, transaction cost economics and the resource-based view. The main research question is how the changing customer values should be taken into account when planning business in a networked environment. The main question is divided into questions that form the basic research problems for the separate case studies presented in the five Publications. This research adopts the case study strategy, and the constructive research approach within it. The material consists of data from several Delphi panels and expert workshops, software pilot documents, company financial statements and information on investor relations on the companies’ web sites. The cases used in this study are a mobile multi-player game value network, smart phone and “Skype mobile” services, the business models of AOL, eBay, Google, Amazon and a telecom operator, a virtual city portal business system and a multi-play offering. The main contribution of this dissertation is bridging the gap between firm resources and customer value. This has been done by theorizing the business model concept and connecting it to both the resource-based view and customer value. This thesis contributes to the resource-based view, which deals with customer value and firm resources needed to deliver the value but has a gap in explaining how the customer value changes should be connected to the changes in key resources. This dissertation also provides tools and processes for analyzing the customer value preferences of ICT services, constructing and analyzing business models and business concept innovation and conducting resource analysis.

Vaatimusmäärittelykäytäntöjen sovellettavuus talousohjauksen vaatimuksia kartoitettaessa

Vaatimusten määrittelyn tarkoitus on kartoittaa tietojärjestelmän käyttäjien työtehtäviä ja niihin liittyviä järjestelmän toiminnallisia ja ei-toiminnallisia vaatimuksia. Todellinen asiakasnäkökulma tulee esille yrityksen itse käynnistämässä vaatimusten määrittelyssä. Nykytilan selvittäminen ja kriittisten toimintojen havaitseminen käynnistävät kohdeyksikössä käytävän keskinäisen keskustelun, mikä on edellytyksenä järjestelmävaatimusten havaitsemiseen. Tämän työn teoriaosuudessa lähestytään eri näkökulmia vaatimustenmäärittelyyn. Tämän jälkeen esitellään muutamia asiakasyritykselle sopivia määrittelymenetelmiä, joita voidaan hyödyntää valmisohjelmistohankeen määrittelyssä. Työssä esitetään myös toiminnanohjaukseen ja tietovarastointiin tarkoitettujen järjestelmien tapaa kerätä taloudellista informaatiota ja luoda raportteja johdolle päätöksenteon tueksi. Työn empiirisessä osassa selvitetään mitkä ovat Lappeenrannan Energia Oy:n asettamat liiketoiminnalliset tarpeet ja vaatimukset uudelle talousohjauksen tietojärjestelmälle.

Combining Customer Requirements and Modularity in Complete Tap Water Solution

This thesis studies forming a complete solution concept for tap water systems in project business environment. The aim of the study is to find tools and means for the target company to determine the scope of their tap water solution offering and to research what kind of organizational capabilities and resources are needed to supply such system solutions. With the help of literature, the characteristics of systems selling and project business and thematics of systems integration and integrated solutions are examined, and the significance of modularity and customer requirements in the given operational environment is discussed. After this, a checklist tool for customer requirements management is developed for the tap water system along with a module allocation method. The study proposes that with the checklist and module allocation the technical specifications can be extensively and innovatively defined for the system. The tools developed are a part of a complete tap water solution concept, which suggests that integrated solutions might constitute possibilities for the company to outperform its competitors when the traditional business methods of the industry are becoming obsolete.

Kunnallisen palveluyksikön toimintojen kehittäminen ja kustannusten

Työn tavoitteena on sisäisen palveluyksikön prosessikuvauksien kautta kehittää nykyistä toimintaa, laskea tuotettujen palveluiden yksikkökustannuksia ja arvioida palkitsemisen vaikutusta sisäisten tukipalveluiden tuottamisen tehostamiseen Nurmijärven kunnassa. Toimintolaskennalla saadaan aikaiseksi tuotetuille palveluille kustannukset ja tuotehinnoittelu. Tällä saadaan aikaan lähes aiheuttamisperiaatteen mukainen kustannusten kohdistaminen. Lisäksi työssä arvioidaan kustannusten kautta saavutettavaa toiminnan tehokkuutta. Työssä haastateltiin yksikön henkilökuntaa, minkä tuloksena saatiin toiminnasta prosessikuvaukset. Toimintolaskennassa tiedot kerättiin eri järjestelmistä ja yksikössä mitattiin työtehtävien hoitoon käytettyä aikaa. Kannusteiden vaikutuksista järjestettiin kolmen organisaation tietotekniikkayksiköiden henkilökunnalle kysely sekä yksikön esimiehet haastateltiin. Haastattelun avulla selvitettiin palkitsemisen nykytilannetta ja tulevaisuuden kehittämismahdollisuuksia. Tuloksena saatiin tukipalveluhinnasto, jolla toteutettiin sisäisten kustannusten kohdistaminen organisaatiossa. Tukipalveluprosessien kuvaamisen tuloksena saatiin toimenpide-ehdotuksia toteutukseen ja lisäkehittämishankkeita. Työntekijöiden kannustekyselyn tuloksena rahapalkitsemisen lisäksi nousi esiin esimiehen antaman palautteen arvostus sekä oman osaamisen kehittäminen.

Factors of customer project profitability in an engineering industrial enterprise

The purpose of the study is to find factors affecting projects' profitability in project business. The issue is approached from customer profitability and project management point of view. The study has been made for a big Finnish company acting in a global market place. The research method is quantitative. Research hypotheses are based on the literature. The used database is originated from the company's ERP- (enterprise resource planning) and project financial follow-up —system. The findings of the study supported the hypotheses weakly. Obviously profitability fluctuated depending on a customer and a project manager. The reasons could not be justified with the variables used in the research.

Technology roadmap for new sales support and management system for crane manufacturing company

Sales configurators are essential tools for companies that offer complicated case specifically crafted products for customers. Most sophisticated of them are able to design an entire end product on the fly according to given constraints, calculate price for the offer and move the order into production. This thesis covers a sales configurator acquisition project in a large industrial company that offers cranes for its customers. The study spans the preliminary stages of a large-scale software purchase project starting from the specification of problem domain and ending up presenting the most viable software solution that fulfils the requirements for the new system. The project consists of mapping usage environment, use cases, and collecting requirements that are expected from the new system. The collected requirements involve fitting the new sales system into enterprise application infrastructure, mitigating the risks involved in the project and specifying new features to the application whilst preserving all of the admired features of the old sales system currently used in the company. The collected requirements were presented to a number of different sales software vendors who were asked to provide solution suggestions that would fulfil all the demands. All of the received solution proposals were exposed to an evaluation to determine the most feasible solutions, and the construction of evaluation criteria itself was a part of the study. The final outcome of this study is a short-list of the most feasible sales configurator solutions together with a description of how software purchase process in large enterprises work, and which aspects should be paid attention in large projects of similar kind.

Managing Customer Retention in Health and Fitness Club Industry

The objective of this study is to resolve how customer retention is managed in Finnish health and fitness clubs, and how is this comparable with the theoretical aspects of customer retention. It is also discussed how the process leading to customer retention is handled, and what the essential elements of customer retention and loyalty are specifically in the health and fitness club industry. In addition, it is discussed to what extent do health and fitness club companies implement the elements of customer retention in their businesses. Finally, there is discussion about the relationship and priority between the behavioral and attitudinal methods of creating retention in the companies. The data was collected by interviewing the management of six health and fitness clubs from different geographical regions in Finland. Results indicated that the most important constructs concerning customer retention were switching barriers, pricing strategy, competitive aspect, corporate image, service quality, employee retention, and customer satisfaction. In addition, the implementation of customer retention was found to vary between different sized companies and companies from different geographical locations. Moreover, it was discovered that the companies put more effort in constructs that are considered to create customer loyalty instead of retention.

Improving the Potentials of Logistics Processes: Identification and Solutions

The importance of logistics for companies is a well known and justified issue. Today, enterprises are developing their logistics processes in order to match their products and services to the requirements of the most important customers. Therefore there is a need for developing analysing tools for logistics and especially for analysing the significance of various customer service elements. The aim of this paper is to propose analytic tools for supporting strategic level logistics decision making by emphasizing service level elements on two levels: (1) to introduce and propose approaches to categorize the developing efforts of logistics and (2) to introduce and/or propose approaches for solving some customer service related strategic level logistics problems. This study consists of two parts. In the first part an overview of the work is presented, and the second part comprises eight research papers on the topic of the study. The overview includes an introduction, where strategic and tactical level logistics problems are discussed and the relation of logistics to marketing and customer service issues is presented. In the first part of the study the objectives, the structure, the research strategy and the contribution of the research are described, and the challenges for future research are discussed. In the second part the three first papers deal with the identification of objectives for logistics while the remaining five papaers concentrate on solving customer service related strategic level logistics problems.

Research of wood fuel market in North-West of Russia

The main purposes of this study are analyzing of forest sector of North-West and research of potentials of wood fuel market in this region. Research is focused on definition of the most perspective areas for export of wood fuel: logging residues, industrial wood processing residues, pellets and briquettes. Russian wood energy industry is very young in comparison with European countries. Nowadays there are no support and serious attention from the government to this sector. Hence almost all wood fuel market is oriented to the Western Europe. Export of wood fuel is dominated over the internal consumption. Pellet production in North –West is rapidly growing. Despite internal market has been developed the lion's share of pellets goes to export. Part of industrial wood processing residues is used by producers for their own goals, part goes to the export and rest of them is not used at all. Logging residues as raw materials for fuel have great potentials; most of them are left in a forest. Special techniques for their processing are too expensive for Russian entrepreneur. Some parts of North –West, which are situated close to the border with European countries, are potential for export. Political, economical and logistical challenges are complicated facilities for foreign customer to purchase wood fuel in remote parts of North-West. However some decisions for solving this problem exist and Russian manufactures are still interested in export of their products.

Analyzing customer profitability: an empirical study

The purpose of this study was to define the customer profitability of the case company as well as to specify the factors that explain customer profitability. The study was made with a quantitative research method. The research hypotheses were formulated mainly on the grounds of previous research, and were tested with statistical research methods. The research results showed that customer profitability is not equally distributed among the customers of the case company, and the majority of its customers is profitable. The interpreters for absolute customer profitability were sales volume and the customer’s location region. The interpreters for relative customer profitability were the customer’s location region and the product segment into which a customer can be classified on the basis of the products that were sold to this customer.

Creating a customer profitability accounting model

Customer profitability accounting is a well-researched topic in the academic field, and it has been proved to posses rather undisputable benefits. However, the calculation of the customer profitabilities can be challenging, therefore the usage of the accounting is not self-explanatory in organizations. The aim of this study was to create a customer profitability accounting model for a wholesales unit in the case company to function as a sales management tool. The literature review of the study presents certain fundamental issues related to customer profitability accounting, in addition a theoretical framework for accounting model design is provided. The creation of the model was commenced by setting the requirements for it and examining the foundation of the model design, which consisted of for instance price setting and cost structure of products. This was followed by selecting approaches to the creation of the model. The result of the study was an accounting model, for which a determination of included revenues and costs was executed, along with the formulation of an allocation criteria of the costs. Lastly, the customer profitabilities were calculated in accordance with the accounting principles and the calculation logic of the model. The attained figures proved the model to provide an appropriate solution for obtaining the customer profitabilities and thus to use the accounting information as a sales management tool in for instance decision making and negotiation situations.

An analytic approach to distribution logistics strategic management

Logistics management is increasingly being recognised by many companies to be of critical concern. The logistics function includes directly or indirectly many of the new areas for achieving or maintaining competitive advantage that companies have been forced to develop due to increasing competitive pressures. The key to achieving a competitive advantage is to manage the logistics function strategically which involves determining the most cost effective method of providing the necessary customer service levels from the many combinations of operating procedures in the areas of transportation, warehousing, order processing and information systems, production, and inventory management. In this thesis, a comprehensive distribution logistics strategic management process is formed by integrating the periodic strategic planning process with a continuous strategic issues management process. Strategic planning is used for defining the basic objectives for a company and assuring co operation and synergy between the different functions of a company while strategic issues management is used on a continuous basis in order to deal with environmental and internal turbulence. The strategic planning subprocess consists of the following main phases: (1) situational analyses, (2) defining the vision and strategic goals for the logistics function, (3) determining objectives and strategies, (4) drawing up tactical action plans, and (5) evaluating the implementation of the plans and making the needed adjustments. The aim of the strategic issues management subprocess is to continuously scan the environment and the organisation for early identification of the issues having a significant impact on the logistics function using the following steps: (1) the identification of trends, (2) assessing the impact and urgency of the identified trends, (3) assigning priorities to the issues, and (4) planning responses to the, issues. The Analytic Hierarchy Process (AHP) is a systematic procedure for structuring any problem. AHP is based on the following three principles: decomposition, comparative judgements, and synthesis of priorities. AHP starts by decomposing a complex, multicriteria problem into a hierarchy where each level consists of a few manageable elements which are then decomposed into another set of elements. The second step is to use a measurement methodology to establish priorities among the elements within each level of the hierarchy. The third step in using AHP is to synthesise the priorities of the elements to establish the overall priorities for the decision alternatives. In this thesis, decision support systems are developed for different areas of distribution logistics strategic management by applying the Analytic Hierarchy Process. The areas covered are: (1) logistics strategic issues management, (2) planning of logistic structure, (3) warehouse site selection, (4) inventory forecasting, (5) defining logistic action and development plans, (6) choosing a distribution logistics strategy, (7) analysing and selecting transport service providers, (8) defining the logistic vision and strategic goals, (9) benchmarking logistic performance, and (10) logistic service management. The thesis demonstrates the potential of AHP as a systematic and analytic approach to distribution logistics strategic management.

Developing an Improved System for Allocating Support Unit Costs to Business Units

The objective of this study is to develop an improved support unit cost allocation system for a medium-sized technology company, and to examine which options for overhead cost accounting exist. The study begins with presenting the terminology and methods associated with overhead cost accounting and responsibility accounting. Also the most common challenges and resulting benefits of overhead cost allocation system development are brought up. As one research method two case studies were conducted for benchmarking purposes. These external cases are compared with the principal company’s cost allocation system and reflected against the theoretical background. In the empirical section interviews were used as the primary source of information alongside self studying principal company’s old cost allocation method. Interviews revealed the main weaknesses of the old system and proposals for a new one, which were utilized in setting targets for developing the new system. As a result of the development process an improved support unit cost allocation system was realized for year 2009. The new system is able to handle support unit costs in more detail enhancing the transparency and fairness of resulting cost allocations. Parts of support unit costs are now seen as business units’ own costs rather than group-level overhead. Also recommendations for further development are made after analyzing how well the targets were reached.

Measuring Customer Experience in Mobile Internet

Problems in the mobile services are complex where the lack of the user analysis is not the modest issue. User centered design has increasingly become as a basis for the design of mobile services. The concept of user centered design gives end-user extensive attention at each stage of the design process. Mobile service providers want to offer experiences for users and clearly the users look for services that can provide pleasant experiences. In this thesis, the elements of user experience in mobile internet were studied as well as user experience measuring methods were researched. This study was looking for user experience measuring metrics and methods to specify new factors to measure user experience. During this thesis research project an application called CEM4Mobile was designed and implemented. CEM4Mobile is an application for observing and analysing user experience based on the user activity and behaviour. As a result of this thesis, a collection of user experience elements and measuring metrics were found. The elements and metrics were designed and implemented to CEM4Mobile product, which measures user experience. It was found out that the user experience measuring methods were based on interaction between two people but CEM4Mobile makes user observation programmatic.

Enhancing Customer Knowledge and Its Sharing At a Paper Production Line

This study has been made for specific paper production line at an international forest industry company in Finland. The main purpose for the study was a need to examine the current situation of the customer knowledge and its’ sharing at case production line, recognize the problems in it and finally, find out the improvement actions. The study is composed of theoretical and empirical parts. In theoretical part, knowledge management and information sharing in addition to customer knowledge management are presented. Empirical data from case production line was collected by using survey questionnaires. The results are analyzed in discussion and conclusions and finally, study ends with summary which includes recommendations. Based on the study, the amount and quality of customer knowledge and gaining and transferring the customer knowledge were found as the main challenges. The proposed solutions were discovered from moving towards more dynamic operating environment and in the area of customer knowledge management, especially from the communities of creation.