Effects of business-to-business customer orientation, satisfaction and retention on firm profitability

The objective of this master’s thesis was to examine the effect of customer orientation on customer satisfaction and how customer satisfaction and customer retention contribute to firm profitability. Beside customer orientation, also other antecedents of customer satisfaction, i.e. service quality, flexibility, trust and commitment, were investigated as control variables. Literature review revealed several research gaps concerning research of the key concepts. These research calls were also answered. The empirical study focused on one case company, a telecommunication expert. The data for the empirical part was collected with web-based questionnaire from case company’s business customers in January-February 2008. Sample (N=95) produced 59 answers, thus the response rate of the survey was 62,1%. The data was analyzed by using statistical analysis program, SPSS. As a conclusion, the results indicate that customer orientation do not affect customer satisfaction directly, but through service quality, flexibility and trust. Moreover, customer satisfaction has positive impacts on commitment and intentions to stay as a customer in the future, but not on profitability. In the present study, only past purchase behavior, measured with customer database measure, is positively related to firm profitability.

Managing manufacturing data and improving its accuracy

There are two main objects in this study: First, to prove the importance of data accuracy to the business success, and second, create a tool for observing and improving the accuracy of ERP systems production master data. Sub-objective is to explain the need for new tool in client company and the meaning of it for the company. In the theoretical part of this thesis the focus is in stating the importance of data accuracy in decision making and it's implications on business success. Also basics of manufacturing planning are introduced in order to explain the key vocabulary. In the empirical part the client company and its need for this study is introduced. New master data report is introduced, and finally, analysing the report and actions based on the results of analysis are explained. The main results of this thesis are finding the interdependence between data accuracy and business success, and providing a report for continuous master data improvement in the client company's ERP system.

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.

Cost Optimisation of Mobile Advertising Client Data Transfer

Data traffic caused by mobile advertising client software when it is communicating with the network server can be a pain point for many application developers who are considering advertising-funded application distribution, since the cost of the data transfer might scare their users away from using the applications. For the thesis project, a simulation environment was built to mimic the real client-server solution for measuring the data transfer over varying types of connections with different usage scenarios. For optimising data transfer, a few general-purpose compressors and XML-specific compressors were tried for compressing the XML data, and a few protocol optimisations were implemented. For optimising the cost, cache usage was improved and pre-loading was enhanced to use free connections to load the data. The data traffic structure and the various optimisations were analysed, and it was found that the cache usage and pre-loading should be enhanced and that the protocol should be changed, with report aggregation and compression using WBXML or gzip.

Master data quality management in a global enterprise

In a networked business environment the visibility requirements towards the supply operations and customer interface has become tighter. In order to meet those requirements the master data of case company is seen as an enabler. However the current state of master data and its quality are not seen good enough to meet those requirements. In this thesis the target of research was to develop a process for managing master data quality as a continuous process and find solutions to cleanse the current customer and supplier data to meet the quality requirements defined in that process. Based on the theory of Master Data Management and data cleansing, small amount of master data was analyzed and cleansed using one commercial data cleansing solution available on the market. This was conducted in cooperation with the vendor as a proof of concept. In the proof of concept the cleansing solution’s applicability to improve the quality of current master data was proved. Based on those findings and the theory of data management the recommendations and proposals for improving the quality of data were given. In the results was also discovered that the biggest reasons for poor data quality is the lack of data governance in the company, and the current master data solutions and its restrictions.

Customer reference marketing in a business to business context

This study focuses on the phenomenon of customer reference marketing in a business tobusiness (B to B) context. Although customer references are generally considered an important marketing and sales tool, the academic literature has paid surprisingly little attention to the phenomenon. The study suggests that customer references could be viewed as important marketing assets for industrial suppliers, and the ability to build, manage and leverage customer reference portfolios systematically constitutes a relevant marketing capability. The role of customer references is examined in the context of the industrial suppliers' shift towards a solution and project orientation and in the light of the on going changes in the project business. Suppliers in several industry sectors are undergoing a change from traditional equipment manufacturing towards project and solution oriented business. It is argued in this thesis that the high complexity, the project oriented nature and the intangible service elements that characterise many contemporary B to B offerings further increase the role of customer references. The study proposes three mechanisms of customer reference marketing: status transfer, validation through testimonials and the demonstration of experience and prior performance. The study was conducted in the context of Finnish B to B process technology and information technology companies. The empirical data comprises 38 interviews with managers of four case companies, 165 customer reference descriptions gathered from six case companies' Web sites, as well as company internal material. The findings from the case studies show that customer references have various external and internal functions that contribute to the growth and performance of B to B firms. Externally, customer references bring status transfer effects from reputable customers, concretise and demonstrate complex solutions, and provide indirect evidence of experience, previous performance, technological functionality and delivered customer value. They can also be leveraged internally to facilitate organisational learning and training, advance offering development, and motivate personnel. Major reference projects create new business opportunities and can be used as a vehicle for strategic change. The findings of the study shed light on the on going changing orientations in the project business environment, increase understanding of the variety of ways in which customer references can be deployed as marketing assets, and provide a framework of the relevant tasks and activities related to building, managing and leveraging a firm's customer reference portfolio. The findings contribute to the industrial marketing research, to the literature on marketing assets and capabilities and to the literature on projects and solutions. The proposed functions and mechanisms of customer reference marketing bring a more thorough and structured understanding about the essence and characteristics of the phenomenon and give a wide ranging view of the role of customer references as marketing assets for B to B firms. The study suggests several managerial implications for industrial suppliers in order to systematise customer reference marketing efforts.

Technological and business challenges of smart grids

Growing recognition of the electricity grid modernization to enable new electricity generation and consumption schemes has found articulation in the vision of the Smart Grid platform. The essence of this vision is an autonomous network with two-way electricity power flows and extensive real-time information between the generation nodes, various electricity-dependent appliances and all points in-between. Three major components of the Smart Grids are distributed intelligence, communication technologies, and automated control systems. The aim of this thesis is to recognize the challenges that Smart Grids are facing, while extinguishing the main driving factors for their introduction. The scope of the thesis also covers possible place of electricity Aggregator Company in the current and future electricity markets. Basic functions of an aggregator and possible revenue sources along with demand response feasibility calculations are reviewed within this thesis.

Engineering of Business Critical Web Applications

Research focus of this thesis is to explore options for building systems for business critical web applications. Business criticality here includes requirements for data protection and system availability. The focus is on open source software. Goals are to identify robust technologies and engineering practices to implement such systems. Research methods include experiments made with sample systems built around chosen software packages that represent certain technologies. The main research focused on finding a good method for database data replication, a key functionality for high-availability, database-driven web applications. Research included also finding engineering best practices from books written by administrators of high traffic web applications. Experiment with database replication showed, that block level synchronous replication offered by DRBD replication software offered considerably more robust data protection and high-availability functionality compared to leading open source database product MySQL, and its built-in asynchronous replication. For master-master database setups, block level replication is more recommended way to build high-availability into the system. Based on thesis research, building high-availability web applications is possible using a combination of open source software and engineering best practices for data protection, availability planning and scaling.

Quality and analysis of administration processes in server operations

IT outsourcing refers to the way companies focus on their core competencies and buy the supporting functions from other companies specialized in that area. Service is the total outcome of numerous of activities by employees and other resources to provide solutions to customers' problems. Outsourcing and service business have their unique characteristics. Service Level Agreements quantify the minimum acceptable service to the user. The service quality has to be objectively quantified so that its achievement or non-achievement of it can be monitored. Usually offshoring refers to the transferring of tasks to low-cost nations. Offshoring presents a lot of challenges that require special attention and they need to be assessed thoroughly. IT Infrastructure management refers to installation and basic usability assistance of operating systems, network and server tools and utilities. ITIL defines the industry best practices for organizing IT processes. This thesis did an analysis of server operations service and the customers’ perception of the quality of daily operations. The agreed workflows and processes should be followed better. Service providers’ processes are thoroughly defined but both the customer and the service provider might disobey them. Service provider should review the workflows regarding customer functions. Customer facing functions require persistent skill development, as they communicate the quality to the customer. Service provider needs to provide better organized communication and knowledge exchange methods between the specialists in different geographical locations.

Salesperson's customer orientation in the personal selling process and in the use of personal selling techniques in the business-to-business setting

Selling is much maligned, often under-valued subject whose inadequate showing in business schools is in inverse proportion to the many job opportunities it offers and the importance of salespeople bringing incomes to companies. The purpose of this research is to increase the understanding of customer-oriented selling and examine the influence of customer-oriented philosophy on selling process, the applicability of selling techniques to this philosophy and the importance of them to salespeople. The empirical section of the study is two-fold. Firstly, the data of qualitative part was collected by conducting five thematic interviews among sales consultants and case company representatives. The findings of the study indicate that customer-oriented selling requires the activity of salespeople. In the customer-oriented personal selling process, salespeople invest time in the preplanning, the need analysis and the benefit demonstration stages. However, the findings propose that salespeople today must also have the basic capabilities for executing the traditional sales process, and the balance between traditional and consultative selling process will change as the duration of the relationship between the salesperson and customer increases. The study also proposes that selling techniques still belong to the customer-oriented selling process, although their roles might be modest. This thesis mapped 75 selling techniques and the quantitative part of the study explored what selling techniques are considered to be important by salespeople in direct selling industry when they make sales with new and existing customers. Response rate of the survey was 69.5%.

Developing co-operation of business units – exploring synergies and a joint business model

The purpose of this study was to develop co-operation between business units of the company operating in graphic industry. The development was done by searching synergy opportunities between these business units. The final aim was to form a business model, which is based on co-operation of these business units.The literature review of this thesis examines synergies and especially the process concerning the search and implementation of synergies. Also the concept of business model and its components are examined. The research was done by using qualitative research method. The main data acquiring method to the empirical part was theme interviews. The data was analyzed using thematisation and content analysis.The results of the study include seven identified possible synergies and a business model, which is based on the co-operation of the business units. The synergy opportunities are evaluated and the implementation order of the synergies is suggested. The presented synergies create the base for the proposed business model.

Analysis of electricity distribution network operation business models and capitalization of control room functions with DMS

Electricity distribution network operation (NO) models are challenged as they are expected to continue to undergo changes during the coming decades in the fairly developed and regulated Nordic electricity market. Network asset managers are to adapt to competitive technoeconomical business models regarding the operation of increasingly intelligent distribution networks. Factors driving the changes for new business models within network operation include: increased investments in distributed automation (DA), regulative frameworks for annual profit limits and quality through outage cost, increasing end-customer demands, climatic changes and increasing use of data system tools, such as Distribution Management System (DMS). The doctoral thesis addresses the questions a) whether there exist conditions and qualifications for competitive markets within electricity distribution network operation and b) if so, identification of limitations and required business mechanisms. This doctoral thesis aims to provide an analytical business framework, primarily for electric utilities, for evaluation and development purposes of dedicated network operation models to meet future market dynamics within network operation. In the thesis, the generic build-up of a business model has been addressed through the use of the strategicbusiness hierarchy levels of mission, vision and strategy for definition of the strategic direction of the business followed by the planning, management and process execution levels of enterprisestrategy execution. Research questions within electricity distribution network operation are addressed at the specified hierarchy levels. The results of the research represent interdisciplinary findings in the areas of electrical engineering and production economics. The main scientific contributions include further development of the extended transaction cost economics (TCE) for government decisions within electricity networks and validation of the usability of the methodology for the electricity distribution industry. Moreover, DMS benefit evaluations in the thesis based on the outage cost calculations propose theoretical maximum benefits of DMS applications equalling roughly 25% of the annual outage costs and 10% of the respective operative costs in the case electric utility. Hence, the annual measurable theoretical benefits from the use of DMS applications are considerable. The theoretical results in the thesis are generally validated by surveys and questionnaires.

Virtual Professional Network as a Value Creator in the Dental Business

The research of virtual professional networks has been enormous but the lack of research in the dental field was obvious. This study focuses on those uses and gratifications, and motives of participants that a virtual pro-fessional network should fulfil. The aim of this study is to understand the factors behind the successful virtual professional network, and motives of participants that support a particular business network’s building up for contributing its further success. In this study the focus is on particular mo-tives, needs and benefits of participants that are significant for the net-work’s further development. The study will explore relevant scientific research and theory that is char-acteristic in networking, and theories of user’s needs and motives. Empiri-cal data was collected from dental professionals by net based question-naire that was sent by e-mail. Data analysis was done by quantitative fac-tor analysis. The findings of this study were obvious that virtual knowledge of implantology is inadequate and knowledge is rather difficult to find in the Internet. Sharing of virtual knowledge, net-learning and communication were seen to improve the quality of impolantological professionalism and also the development of these areas was experienced essential. On the grounds of this study a host of a virtual professional network can focus on those aspects that serve the users at best, can develop professionalism in implantology and can profit in its own business operations.

External knowledge transfer mechanisms in service business acquisition

In knowledge-intensive economy an effective knowledge transfer is a part of the firm’s strategy to achieve a competitive advantage in the market. Knowledge transfer related to a variety of mechanisms depends on the nature of knowledge and context. The topic is, however, very little empirical studied and there is a research gap in scientific literature. This study examined and analyzed external knowledge transfer mechanisms in service business and especially in the context of acquisitions. The aim was to find out what kind of mechanisms was used when the buyer began to transfer data e.g. their own agendas and practices to the purchased units. Another major research goal was to identify the critical factors which contributed to knowledge transfer through different mechanisms. The study was conducted as a multiple-case study in a consultative service business company, in its four business units acquired by acquisition, in various parts of the country. The empirical part of the study was carried out as focus group interviews in each unit, and the data were analyzed using qualitative methods. The main findings of this study were firstly the nine different knowledge transfer mechanisms in service business acquisition: acquisition management team as an initiator, unit manager as a translator, formal training, self-directed learning, rooming-in, IT systems implementation, customer relationship management, codified database and ecommunication. The used mechanisms brought up several aspects as giving the face to changing, security of receiving right knowledge and correctly interpreted we-ness atmosphere, and orientation to use more consultative touch with customers. The study pointed out seven critical factors contributed to different mechanisms: absorption, motivation, organizational learning, social interaction, trust, interpretation and time resource. The two last mentioned were new findings compared to previous studies. Each of the mechanisms and the related critical factors contributed in different ways to the activity in different units after the acquisition. The role of knowledge management strategy was the most significant managerial contribution of the study. Phenomenon is not recognized enough although it is strongly linked in knowledge based companies. The recognition would help to develop a better understanding of the business through acquisitions, especially in situations such as where two different knowledge strategies combines in new common company.

Spare part business analysis and development

The purpose of this Thesis was to comprehensively analyze and develop the spare part business in Company Oy’s five biggest product groups by searching development issues related to single spare parts’ supply chains as well as the spare part business process, make implementation plans for them and implement the plans when possible. The items were classified based on special characteristics of spare parts and on their actual sales volumes. The created item classes were examined for finding improvement possibilities. Management strategies for classified items were suggested. Vendors and customers were analyzed for supporting the comprehensive supply network development work. The effectiveness of the current spare part business process was analyzed in co-operation with the spare part teams in three business unit locations. Several items were taken away from inventories as uselessly stocked items. Price list related to core items with one of the main product group’s core item manufacturer was suggested to be expanded in Town A. Refinement equipment seal item supply chain management was seen important to develop in Town B. A new internal business process model was created for minimizing and enhancing the internal business between Company’s business units. SAP inventory reports and several other features were suggested to be changed or developed. Also the SAP data material management was seen very important to be developed continuously. Many other development issues related to spare parts’ supply chains and the work done in the business process were found. The need for investigating the development possibilities deeper became very clear during the project.