© Leonard Walletzký }How to find proper value proposition * a tendency to take undue risks because the costs are not borne by the party taking the risk * The customer is able to affect an event he is insured against, but the seller has no power to monitor or affect this event. * ERP supplier has limited information about customers IT security * Provider has limited information about the basement of the real client´s problem * Double moral hazard ◦Client does not know if the provider is able to operate on the particular target }Illusion of value proposition }Provider is not able to see the basis of target }Client is not able to see the benefits of the cooperation }Both are motivated to share information and knowledge }Value proposition can not be set up } } }The company needs information system to support its core business }The company has serious problems with ◦communication with customers }But also hidden problems ◦publishing information ◦time spent on one particular business case is too long – mostly caused by bad communication inside the company }Offers a big customised ERP system together with CMS system ◦CMS system has connection to Social Networks }The problem to solve is the communication }But it is not a part of the problem }IT company needs to find its paths through particular targets – to analyse the situation if the client } }Value proposition is hidden ◦is hidden by the hill }Hierarchy of barriers hiding the target ◦have to be overcame step by step ◦leads to process of value estimation }Value can not be proposed }It can be only estimated ◦is used to find value proposition ◦there is not a target, only target area –target area is the space of all sub-targets, corresponding with particular value estimation } } }modified by the value co-creation process }motivated by the decreasing of the level of information asymmetry of both parties }the process is about particularize of value estimations }till the moment of founding the value proposition } }can be found in the moment client and provider can see the target ◦share the same point of view ◦both can see the utility level ◦and share as well }both partners agree with concrete mutual criteria of success ◦variables to test –no of customers –profitability ◦target values –number of customers rise of 30% –profitability rises more than 10% } }must be shared and paid ◦problem is complex ◦must be understood and explored }provider must be paid for using his sources to do it }Client is paying for the analysis of the target area } } }60s ◦Centralized hosting of business applications ◦service bureau –company which provides business services for a fee –eg. IBM –time-sharing –sharing of a computing resource among many users by means of multiprogramming and multi-tasking ◦utility computing –a service provisioning model in which a service provider makes computing resources and infrastructure management available to the customer as needed, and charges them for specific usage rather than a flat rate ◦mainframes } }90s ◦Application Service Provider (ASP) –thanks to expansion of the Internet ◦class of centralized computing ◦services of –hosting –managing specialized business applications ◦reducing costs through –the solution provider's specialization in a particular business application –central administration } https://www.xsdot.com/web-development/asp-keywords-109946.jpg?v=1x291x237 }2001 ◦Software as a Service ◦extends the idea of the ASP model ◦software vendors –first ASPs were focused on managing and hosting of third-party independent software vendors' software ◦SaaS –typically develop and manage their own software } http://cdn2.hubspot.net/hub/61984/file-26361001-png/images/cloud-computing-saas.png }application clients ◦ASP –Client - Server –initial ASP used thick clients ◦SaaS –Thin Clients –Web browsers }software architecture ◦ASP –maintaining a separate instance of the application for each business ◦SaaS –utilize a multi-tenant architecture –multiple businesses and users } }Well known SaaS ◦Gmail ◦Google Drive ◦Office 365 }Messaging }DBMS software }management software } }CAD software }development software }accounting }collaboration }project management }customer relationship management }management information systems }enterprise resource planning }invoicing }human resource management }content management }service desk management } }Cloud }Cloud Service models }support of scalability ◦horizontal scaling ◦the application is installed on multiple machines }tenant } http://www.arrayguard.com/images/solutions/cloud-service-delivery.png ◦multi-tenant services –Vast majority of SaaS solutions –a single –version of the application –configuration –hardware, network, operating system –advantage in comparison with traditional software –multiple physical copies –potentially different versions –different configurations ◦ http://natishalom.typepad.com/.a/6a00d835457b7453ef0120a939add4970b-pi }Thin Client ◦Web Browser }Hybrid ◦Dropbox }For integration with internal systems ◦Application programming interfaces } http://www.pngict.com/wp-content/uploads/2015/06/web-browsers.jpg https://extension.usu.edu/innovate/images/uploads/dropbox-logo.png http://cdn2.hubspot.net/hub/334319/file-595191923-jpg/Allunnas_Pages_Pictures/Cloud_Integration.jpg ?t=1441130776027&width=1660 }Subscription fee ◦User ◦Time unit –typically –month –annual ◦Transaction ◦Support }Advertising } }Freemium ◦basic functionality is for free ◦restrictions in –capacity –functionality –support –users –time –bandwidth ◦money si charged for –proprietary functions –functionality –... ◦multi-tenant } }Positive }Negative }Strengths }Opportunities }Weaknesses }Threats •Managers are not IT experts •They are focused on core business of the companies •They understand the language of the money •They see IT as the source of problems and non stability }Less risky }Immediate }Reduce IT support costs }Initial setup cost for SaaS is typically lower than the equivalent enterprise software }Architecture }Economy of Scale }Enables Mashups }Customer ◦Lower initial investment –Software and hardware ◦Even the long time usage price is higher –Compare with better ROI (return of investments) –Avoiding the peaks of cash flow (the highest danger is based on unexpected costs) ◦Example –CRM or ERP system }Provider has regular income }SW deploy }Updates ◦more often ◦update is decided and executed by provider, not by customer }single configuration }faster testing }vendor has access to ◦all customer data –expediting of design –regression testing ◦analytics of user behaviour } }Migration of data }Integration of clients }Tailored customization }Can't directly access a company's internal systems } Customer might be forced to use a new versions } }SaaS Integration Platforms ◦Complex systems that integrates particular services –CRM –ERP }Growth of SaaS sales on global market }Enables Mashups ◦integrating content from more than one SaaS ◦to create a single new service displayed in a single graphical interface } } }Unreliable provider of the service ◦Bankrupt ◦The physical presence of data }Security and privacy ◦is common corporate infrastructure more secured than data centres of cloud? ◦HTTPS }Connection ◦Latency ◦Reliability }SaaS is only one from many solution }Task is to give proper service for concrete situation }Managers need to understand ◦Advantages ◦Risks }To have real expectations }SaaS is one way to distribute service }In many points of view has positive influence to both parties business }Needs to be described and set properly