RSM Outlook Summer 2006

#### The New Entrepreneurs (Peter Benson) Today, aspiring entrepreneurs can rely on educational programmes and institutes specifically tailored to training and supporting individuals interested in the business start-up. #### Managing Risk (Rebecca Morris) He is a prominent voice in the public-policy debate on the institutional design of the regulation of financial institutions, and has founded three shadow committees to influence the subject. RSM Erasmus University’s Professor Harald Benink shares his views on regulatory design and why academics can play an important role in this debate. #### Social Innovation: Curing the Dutch "Disease" (Rebecca Morris) The debate on how to make the Netherlands more competitive has so far revolved around investing more in R&D. RSM’s Professor Henk Volberda argues that the cure for the persistent lack of innovation in Dutch companies, the Dutch ‘disease’, not only depends on technological innovation, but on ‘social innovation’ – and now the Dutch government is listening. #### The Bologna Accord (Anna Perry) Europe’s higher education landscape is in the middle of a revolution, the chief catalyst of which is the Bologna Accord. What are its implications for our educational professionals and students? And how will it impact the programmes and courses offered by Europe’s universities, colleges and schools

The impact of potential flexibility gains and losses on the intention to outsource business processes

In an ever accelerating world demanding fast adjustment to changing business environments, organizational flexibility becomes increasingly important. By outsourcing business processes (BPO), there are both potential flexibility losses (e.g. loss of control) and potential flexibility gains (e.g. the transformation of fixed to variable costs). Firms have to balance this trade-off to retain sufficient flexibility or even enlarge their strategic and operational flexibility. Based on an empirical study with Germany’s Top 200 Banks it is shown that the perception of both flexibility gains and losses have a profound impact on the outsourcers’ attitude towards BPO. In particular, potential flexibility losses have a higher impact on outsourcers’ attitude than potential flexibility gains. Subsequently, in accordance with the theory of reasoned action it turns out that attitude is an antecedent of the intention towards outsourcing. Therefore we argue that flexibility-related issues should be explicitly considered in outsourcing evaluations and service providers should emphasize on contractual means to demonstrate that organizational flexibility will not be negatively affected

Global and regional sourcing of ICT-enabled business services: upgrading of China, Hong Kong and Singapore along the global value chain

Offshoring, as part of globalisation, first started decades ago with manufacturing processes disintegrated along the global value chain and dramatically redistributed to low-cost regions. The next global shift of work involving ICT-enabled business services has arisen since the 1990s, especially featuring the success of India’s supplier role. The possibilities for the Global South to move up the value ladder are well demonstrated by the achievements of the newly industrialised economies in East Asia in the first shift and of India in the second. In the services sector, however, potential for upgrading is conditioned by quality-based elements, such as trust, culture and language, which vary both between producing and market areas. Flows are increasingly multi-directional, requiring attention to the neglected issue of demands from fast-growing Southern economies. So how do locations and firms in the Global South attempt to upgrade in the regime of rising services offshoring? The Indian experience especially in serving Anglophone markets in the Global North has been widely documented – but not that of East Asian economies, with their distinct characteristics and strong historic, ethnic and cultural ties with each other. This study examines the upgrading possibilities and constraints of China, Hong Kong and Singapore along the global services chain. For cross-case analysis, it focuses on three specific sets of services, including information technology, finance and accounting, and customer contact services. The concepts of global value chain, competitive advantage and capabilities are applied to reconstruct the phenomenon of services offshoring from both the demand and supply perspectives in the selected locations, and synthesise the dynamics between locational characteristics and firm strategies. A series of distinct upgrading strategies are identified, involving mixes of manufacturisation, knowledge-intensification and deepening relational capabilities to exploit both regional advantages of language/cultural proximity and established global links

Information Systems to Support “Door-step Banking”: Enabling Scalability of Microfinance to Serve More of the Poor at the Bottom of the Pyramid

Microfinance provides financial services to the extremely poor who are not served by banks. At the heart of microfinance is microcredit which provides small loans to the unbanked poor to seed small local businesses. Microfinance may help alleviate poverty because access to finance has a positive impact on economic development. The unmet need of the poor for financial services spawned over 11,000 microfinance institutions (MFIs) by 2010, but 90 percent of these MFIs are small with fewer than 10,000 clients. This article presents three case examples of MFIs in India that deployed information systems (IS) to increase the scale of their operations. Each example illustrates how IS helped MFIs achieve financial sustainability through scaling despite the necessity of using “door-step banking” which requires the MFI’s agents to visit clients in remote areas. By presenting microfinance examples that impact the economic empowerment of the poor, this article addresses the dearth of research on the use of IS to effect social change at the bottom of the pyramid. The article’s subject matter also provides engaging material for IS coursework and teaching

Strategic Sourcing in Banking - A Framework

The banking landscape in Europe and Germany has a polypolistic market structure with an average vertical range of integration of 80%, implying high process redundancies. Accumulating processes for standardized products is one way to achieve efficiency improvements. “Smart sourcing” can change the production mix of banks lead to a concentration of processes. A challenge is the lack of consistent frameworks for the banking industry to systematically support the sourcing decision process. In this paper, drawing on the resource based view and transaction cost economics it is shown that, in addition to a make or buy decision, co-operation between competitors should be included into a sourcing analysis as the third alternative. To support the decision on making, buying or sharing an activity, a quantitative analysis of each activity of the banking value chain is necessary. We propose an analysis framework based on a generic banking value chain. Since the recent literature mostly focuses only on the outsourcers’ case, a formalized model is developed to consider both the objective function of the out- and the insourcer. Since the market might restrict sourcing options, as there may be no providers of relevant activities, it can be shown that “sharing” as part of a co-opetition concept instead of buy or make can be a way to break up the value chain. The framework thus supports decision makers to approach an optimal degree of vertical integration for both market sides

Semantic discovery and reuse of business process patterns

Patterns currently play an important role in modern information systems (IS) development and their use has mainly been restricted to the design and implementation phases of the development lifecycle. Given the increasing significance of business modelling in IS development, patterns have the potential of providing a viable solution for promoting reusability of recurrent generalized models in the very early stages of development. As a statement of research-in-progress this paper focuses on business process patterns and proposes an initial methodological framework for the discovery and reuse of business process patterns within the IS development lifecycle. The framework borrows ideas from the domain engineering literature and proposes the use of semantics to drive both the discovery of patterns as well as their reuse

E-Commerce Adoption by Small and Medium Enterprises in Nigeria

The future survival of small and medium enterprises (SMEs) is inextricably linked to their implementation of e-commerce systems. The lack of e-commerce strategies among SME business owners has contributed to a low level of e-commerce adoption by SMEs. The purpose of this multiple case study was to explore the strategies that Nigerian SME business owners used to implement e-commerce systems. The population consisted of retail SMEs in Lagos, Nigeria, that have functional e-commerce systems. The conceptual framework supporting the study was dynamic capabilities framework. Data for the study were derived from semistructured interviews of 4 SME business owners/managers and documentation from the case companies. Data analysis entailed coding of the interview transcripts and analysis of documentary data to identify themes. Member checking and triangulation ensured the credibility of the study. The main themes that emerged from data analysis include service delivery strategies, dynamic marketing strategies, and learning and adaptation. The implications for social change include the potential to contribute to increased wealth creation opportunities for the business owners, their employees, and the local communities in Nigeria