Improving process performance through market network redesign: a study of the impact of electronic markets in the financial securities sector (original) (raw)

Improving process performance through market network design: A study of the impact of electronic markets in the financial securities sector

Accounting Management and Information Technologies, 1998

Previous research suggested that the performance of interorganisational processes can be influenced by eight factors: stakeholders, competition, information technology, market network design, perceived risk, process design, information, and trust. This paper specifically focuses on the consequences of market network redesign for interorganisational processes. A distinction is made between transaction oriented electronic markets and processing oriented electronic markets. Case studies in the financial securities industry show that an open market structure with many participants can be successful for complex transaction processes. Support of at least several stakeholders is crucial for the success of an electronic market.

Financial securities transactions: a study of logistic process performance improvements

The Journal of Strategic Information Systems, 1998

The goal of this paper is to develop a better understanding of the intra-and inter-organisational processes related to financial securities transactions, and, ultimately, to provide guidelines for the design of inter-organisational systems in information-intensive markets and networks. A framework is presented to evaluate the influence of eight factors on the performance of the securities transaction process. These factors are stakeholders, competition, information technology, market network design, perceived risk, process design, information, and trust. The framework is used in a case study of one of Europe's largest asset management organisations (the Robeco Group). It is concluded that improvement of the logistic process for securities transactions implies a balancing act between process design, risk perception of the stakeholders and trust.

How Electronic Network Organisations Enable Mass Customisation in Financial Markets

The financial services industry has used Internet technologies to create many standardised services for consumers. Recent Internet initiatives offer more customised financial products and services. Traditional market players have responded by evolving standard products to become more client specific. These forms of mass customisation of financial services are based on an increasing role and importance of electronic business networks. This paper explores examples of business networks offering financial services and analyses the criteria for process performance and success.

Governance Mechanisms in Business-to-Business Electronic Markets

Journal of Marketing, 2010

Rather than relying on traditional relational exchanges, recent technological advances have made it feasible for firms to undertake market-based transactions through information technology-mediated electronic markets. The success of such business-to-business electronic markets depends on the governance practices of the market maker-that is, the firm that manages and administers the electronic market. Market makers use three governance mechanisms to manage electronic markets: (1) monitoring the market participants (i.e., buyers and sellers that participate in the market), (2) building a sense of community among market participants to instill mutual respect and trust, and (3) self-participating in the electronic market to build know-how about how the market functions. Building on transaction cost analysis theory, the authors suggest that the influence of these governance mechanisms on electronic market performance (i.e., meeting strategic and financial objectives) depends on behavioral and external uncertainty in the market. Survey data from market makers show that (1) monitoring is effective for reputed market makers and when demand uncertainty is high, (2) community building is beneficial when pricing is static rather than dynamic, and (3) self-participation is useful when the market maker is well reputed and when the market relies on dynamic pricing.

Effect of Network Relations on the Adoption of Electronic Trading Systems

Journal of Management Information Systems, 2008

conferences such as ICIS and AMCIS. JOHN J. SIAM is an Assistant Professor of Accounting and Financial Management, and Founding Director of Gould Trading Floor, at DeGroote School of Business, McMaster University. His research and consultation include markets microstructure, information technology, risk management, and business education. He developed unique case-based trading software called "Market Maker" and courses in trading and risk management. Prior to joining DeGroote, he held the positions of options specialist, market maker, and liability trader at the Montreal Exchange. His research has been published in the Journal of Financial Education and proceedings of conferences such as ICIS and AMCIS.

Instruments for an Integrated Business Network Redesign in the Financial Industry

Lecture Notes in Business Information Processing, 2008

Driven by factors like globalization, increased competition and declining customer loyalty the financial industry is facing a structural transformation. To focus on core competencies banks adjust their business models and reduce their degree of vertical integration by sourcing complementary activities. Operating in a changing market with regards to sourcing strategies, the (re)design of business model and thus also the business network is a main challenge for the financial institutions. This research paper introduces an integrated approach of business network redesign (BNR) for the financial industry that not only covers all three layers of business engineeringbusiness model, process model and information systems-but also provides extensive methodological support. Present approaches either only partially cover these layers and thus show a restricted usability or lack methodological support so that they are merely applicable in practice. Since the research is still in progress, this paper concentrates on the core instruments used in the process of BNR. Thereby the redesign is discussed for the example of the investment process and thus presents the following fundamentals: a reference network, a reference process and a reference service map for investments.

The Governance of Transactions by Commercial Intermediaries: An Analysis of the Re-engineering of Intermediation by Electronic Commerce

International Journal of The Economics of Business, 2002

Efficiency arguments explain why commercial intermediaries exist and will continue to be involved in the exchanges despite the spread of digital networks. Commercial intermediaries provide producers and consumers with a set of information, logistic, securization and insurance (and liquidity) services. By bundling these services and by dedicating assets and learning capabilities to their production, commercial intermediaries allow transaction costs to be reduced. Digital networks per se cannot allow transacting parties to benefit from such efficient providers of intermediation services. Rather than establishing direct relationships among producers and consumers, the Internet will support a re-organization of existing intermediation chains, because traditional intermediaries will reinforce their ability to provide these service by using ITs. The analysis of the role of commercial intermediaries thus leads to a better understanding of the future of e-commerce. In turn, e-commerce provides New-Institutional Economics with a stimulating case study.

Electronic Markets: Theory and Evidence from 20 Years of Research

Twenty years ago the Communications of the ACM published "Electronic markets and electronic hierarchies" by Tom Malone, JoAnne Yates, and Bob Benjamin. It has become the most cited article in the Information Systems field with 424 citations in the ISI Web of Science index and 1,472 in Google Scholar. The paper articulated the electronic markets hypothesis (EMH), which predicted that IT cost-capability improvements would drive organizations away from vertically integrated structures and would lead to unbiased online markets with many suppliers. The panel will examine the contributions of the EMH to IT-focused organizational studies. Panelists will debate the EMH as a theory in relation to others for explaining electronic market phenomena. Empirical data and its fit with the EMH will also be debated. Are research developments in electronic markets consistent with the 1987 forecasts? We will conclude on the issue of how an enhanced and more powerful theory of electronic markets might be developed in the coming years.

Analyzing information intermediaries in electronic brokerage

2000

Abstract In the past, full-service stock brokerage firms had a strategic advantage over discount brokers because of the control full-service brokers had over the information provided to the customer. Full-service stockbrokers acted as information intermediaries in that they were able to capture residual value from the transfer of information to make a profit.