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Trust Among Mobile Business Partners

Roger ClarkeXamax Consultancy Pty Ltd, Canberra

Visiting Professor, Uni. of Hong Kong, U.N.S.W., A.N.U.

http://www.anu.edu.au/people/Roger.Clarke/...

.../EC/MBusTrust {.html, .ppt}

ICMB 2005 – m>BusinessSydney, 11 July 2005

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Trust Among Mobile Business Partners

Themes

• Understand History ... Or Repeat It• Trust and Consumers / Trust and Partners• Change in Business Processes and

Organisation• From Virtual to Ambient m>Organisation• Partnership Trust and Distrust• Towards a Trust Framework for m>Business

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Trust Issues Affecting eBusiness Customers / Clients

• Terms of Trade• Other-Party Default

• Data Security in General• Data Security In Particular:

• Identity• Location• Identity Authentication Data

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Overcoming Device Promiscuityin Mobile Devices, RFID Chips,

etc.

• Sufficient Processor & Memory Capacity

• Sufficient Power when it’s needed• Two-Way Device Authentication• Consumer Requirements defined• Consumer Requirements implemented

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Trust Issues Affecting Business Partners

• Business Aspects• Massive Investments• Shifting Allegiances• Security Problems• Appropriateness of

Payment Mechanisms• Demand-Side:

• Cultural Variations• Cultural Change

• Technology Aspects• Clash between Multimedia

Expectationsand Mobile Networks’ Channel Capacity

• Payment Mechanisms• Infrastructure Variations,

Compatibilities, Interoperability

• Rapid Change andForward-Compatibility

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Lesson 1 from eCommerceSo near ... and yet so far

• Reaping the benefits of eBusiness depends on it being adopted by others

• But many organisations suffer from slow adoption by their business partnersespecially where those partners are:

• Medium-Sized Business Enterprises• Small Business Enterprises• Micro Business Enterprises• Consumers and Citizens

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A Retrospective on 25 Years of Changein Business Process

and Business Organisation

• From Organigrams to Value-Chain Thinking

• Generations of System Topologies• Mutating Organisational Topologies• Virtual and Ambient Organisations

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The Business Enterprise Value-Chain

Firm Infrastructure (eg. Finance, Planning)

Human Resource Management

Technology Development

Procurement

InboundLogistics

Operations (Manufact-

uring)

OutboundLogistics

Marketingand Sales

After-saleService

MARGIN

SupportActivities

Primary Activities

Porter M. 'Competitive Advantage' The Free Press,New York, 1985, in Chapter 2, pp. 33-61

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The Industry Sector Value-Chain

Supplier

Value

Chains

Firm

Value Chain

Channel

Value Chains

(Distributors

or Retailers)

Buyer

Value Chain

Porter M. 'Competitive Advantage' The Free Press,New York, 1985, in Chapter 2, pp. 33-61

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Inter- Organisational Systems

Multi-Organisational Systems

OrganisationalInformationSystem

OrganisationalInformationSystem

OrganisationalInformationSystem

OrganisationalInformationSystem

OrganisationalInformationSystem

OrganisationalInformationSystem

OrganisationalInformationSystem

OrganisationalInformationSystem

OrganisationalInformationSystem

OrganisationalInformationSystem

OrganisationalInformationSystem

OrganisationalInformationSystem

1-to-1

m-to-n

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Huband

SpokeSystem

s

OrganisationalInformationSystem

OrganisationalInformationSystem

OrganisationalInformationSystem

OrganisationalInformationSystem

OrganisationalInformationSystem

OrganisationalInformationSystem

OrganisationalInformationSystem

OrganisationalInformationSystem

OrganisationalInformationSystem

OrganisationalInformationSystem

Hub

m-to-1-to-n

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Cascading Systems

MaterialManufacturerClothing

ManufacturerWholesalerRetailer

m-to-1-to-n-to-p

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Extra-Organisation

alSystems

OrganisationalInformationSystem

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Supra-Organisational SystemsAlternative Topologies

• Inter-Organisational Systems (1-to-1) • Multi-Organisational Systems:

• Unmediated (m-to-n) Networls• Hub-and-Spoke (1-to-n) Networks

• sector-dominating organisations• intermediated by exchanges, VANs/ISPs• consortia-operated schemes

• Cascading (1-to-1-to-1) Systems (QR, CR, ECR)

• Extra-Organisational Systems

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Supra-Organisational Formsto Match the Systems

Topologies

• Contracts for:• Procurement• Distribution

• Strategic Alliances or Partnerships

• Outsourcing

• Franchising

• Project Teams• Task Forces• Joint Ventures• Consortia• ...

• Virtual Organisation

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Cameron’seBusiness Collaborative Project

LifecycleTM

ProductSelection

PostImplementation

Review

Evaluationby Potential ParticipantsInitiation

of ProposalTesting

CertificationDevelopment

2. Initiative Development(Traditional ebusiness lifecycle) 3. Take-up

&Implementation

DesignProject Planning

Participant Commitment1. Collaboration Formation

& Maintenance

Establishment of

Collaboration

Collaboration Maintenance

ProjectEstablishment

ProjectAnalysis &Evaluation

Cameron J. (2005) 'Ten concepts for an ebusiness collaborative project management framework ' Proc. 18th Bled eConf., Bled, Slovenia, June 2005

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Cameron’s Ten Concepts form>Business Collaborative

Projects• Levels of

Collaboration:

• Management Functions:

• Meta Factors:

• Participant• Team• Representative

• Collaboration Formation and Maintenance

• Initiative Development• Take-up and Implementation

• Motivation• Capability• Communication• Coordination

Cameron J. (2005) 'Ten concepts for an ebusiness collaborative project management framework ' Proc. 18th Bled eConf., Bled, Slovenia, June 2005

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Prof. Niels Bjorn-Andersen, February 2005THE VISION ABOUT AMBIENT ORGANIZATIONSCopenhagen Business School / Sydney Universityhttp://www.econ.usyd.edu.au/download.php?id=3797

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The Objectivesof eCommerce and of

m>Business Survive and Flourish through:• Effectiveness in achieving organisational

objectives such as profit, market-share, growth; delivery of services, social control

• Efficiency, i.e. low resource consumption in relation to the value of the outcomes

• Flexibility over the short term

• Adaptability over the medium-term

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From Virtual to Ambient Organisation

Virtual Organisation(the e- Era)

• multiple, known locations• less hierarchy, more team• adaptive business processes• adaptive business product• semi-planned muddling-

through• fluidity & instability as a virtue• uncertain organisational

integrity• need for a trust framework

Ambient Organisation(the m> Era)

• location fluidity√√√√

• instability inherent√√√√√√

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Lesson 2 from eCommerce DISTRUST is a Major

Impediment

• Lack of power• Benefits accrue to others• Lack of incentive to adopt• Incentives to adopt are quickly withdrawn• eBusiness is used by powerful

organisations to:• reduce service-levels• transfer cost and effort to others

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QuickTime™ and aTIFF (LZW) decompressor

are needed to see this picture.

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QuickTime™ and aTIFF (LZW) decompressor

are needed to see this picture.

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QuickTime™ and aTIFF (LZW) decompressor

are needed to see this picture.

QuickTime™ and aTIFF (LZW) decompressor

are needed to see this picture.

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TRUST

confident relianceby one party

on the behaviour of other parties

OriginsFamilial and Social Settings

Trust in Organisational SettingsWhat you depend on when no other form of risk amelioration strategy is available

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DISTRUSTconfident reliance

by one partyon the MISbehaviour of other parties

DisTrust in Organisational SettingsWhat you expect – the worst

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Sources of Trust• Direct Relationship

kinship, mateship, principal-agent, contract, multiple prior transactions

• Direct Experienceprior exposure, a prior transaction

• Referred Trust'word-of-mouth', reputation, accreditation

• Symbols of Trust or Images of Trustbrands, meta-brands

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Market Participants

Sellers/Buyers Tradable Items Buyers/SellersAgents / Brokers Marketspace Operator Agents/Brokers

Services Providers Processes Infrastructure

MSOS / BB / STITITITIAASPSPSP

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Price-Setting as a (Dis)Trust Factor

• Price Pre-Set by the Seller:• Shop Point-of-Sale• Catalogue-Sale

• Price Pre-Set by the Buyer:• ‘Reverse Auction’

• Mechanism Driven by the Buyer:• RFQ/RFT/EOI-RFP

• Mechanism Driven by the Seller:• Open Auctions

• Negotiation Process

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Risk Locations in Marketspaces• Default by a Party

• The Seller• The Buyer• An Agent• A Service-Provider• The Marketspace Operator

• Quality• The Tradable Item• The Fulfilment Process

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Trust Issues Among Partnersin Ambient, m>Business

Organisations

• Multiple, Fluid Locations – ‘hello! hello?’

• Less Hierarchy, More Team – ‘which team was that again?’

• Adaptive Business Processes – ‘what undertakings?’

• Adaptive Business Product – ‘what specification?’

• Semi-Planned Muddling-Through – ‘but that was then’

• Inherent Fluidity & Instability – ‘what contract terms?’

• Highly Uncertain Organisational Integrity – ‘who?’

=> An Enormous Need for a Trust Framework – ‘a what?’

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Foundations for Confident Reliance

Among Business Partners in Ambient, m>Business

Organisations

Each Player’s• Track Record• Expertise• Findability• ‘Substance’• ‘Commitment’• ‘Involvement’• Control of Expertise

‘Guarantees’ About:• Confidentiality• I.P.

• Relative Sizes• Relative Contributions• Relative Market Power• Exercise of Market

Power