RESEARCH REPORT

PWC BUSINESS MODEL AND WEB 2.0

 TABLE OF CONTENTS
1. INTRODUCTION.........................................ERROR: REFERENCE SOURCE NOT FOUND

2. PWC BUSINESS MODEL AND WEB 2.0..................................................................................4

3. WEB 2.0 COLLABORATIVE BUSINESS MODELS................................................................8

4. CONCLUSION..............................................................................................................................9

5. REFERENCE................................................................................................................................9

LIST OF FIGURES
1. Internet of Services (IoS) Basic Architecture……………………………………………8
2. Institute of Media Communication Management Business Model Framework……………….9

LIST OF TABLES
1. Features of Web 2.0 and SOA……………………………………………………………………..7
 1. Introduction

The World Wide Web is getting bigger, broader, and functional than ever before. The prefix
‘e’ has been playing a major role in superseding the traditional business models to the new
electronic-age business model. With the advent of e-commerce, the boundaries between the
companies, partners, and customers are slowly disappearing and the nature of the relationship
is changing. The impact of e-commerce on the world economy can be divided into three
phases (Kalakota and Robinson). In the first phase (1994-1997), the sole motive of the
companies was to have a site on the World Wide Web. It acted merely like a banner with
information displayed about the company on the web page. In the second phase (1997-2000),
e-commerce was about transactions which included buying and selling over the internet. In
the third phase (2000 and above), e-commerce is about collaboration and profitability. The
new e-age business is about utilizing the internet and the electronic media to add value to the
business. Everyday, more and more individuals and companies are linked electronically.
After B2B and B2C, now the e-commerce is about P2C (path to profitability). The business
models are changing to internet-savvy e-business models and the success of it depends on the
efficient and fully integrated ERP system.
PWC (Price Water Coopers Business Model):
PWC business model is about e-business and maximum utilization of the available information
communication and technology. It enables the businesses to have a better vision into the
future. It provides a greater visibility to the companies about where their business is heading
to and gives flexibility and adaptability to change. The four-stage PWC model is about recent
developments in internet and e-business and optimization of business value through
partnership and working collectively. The four stages of PWC Business Model are:
Stage 1 – Channel Enhancement
Stage 2- Value Chain Integration
Stage 3 - Industry Transformation
Stage 4 - Convergence
Web 2.0
According to Tim O’Reilly, “Web 2.0 is a term describing the trend in the use of world wide
web technology and web designs that aim to enhance creativity, information sharing, and most
notably collaboration among users.”
Web 2.0 is associated with web applications which provide interactive information sharing,
interoperability, and collaboration on the world wide web. Social networking sites, web-based
communities, hosted services, web applications, video-sharing sites, blogs, wikis, mashups,
and folksonomies are examples of Web 2.0.

Web 2.0 can take the businesses to a new altitude with the characteristics that it has which
includes – promotion of openness and collaboration, empowerment of end users, highly-
focused data management, offering software-as-a-service, harnessing collective intelligence.
Web 2.0 is a shift from internet being a set of applications to a platform that enables
collaboration and combination of applications.
The further sections will explain the influence of Web 2.0 technology at the different stages of
PWC business model.

2. PWC Business Model and Web 2.0

Stage 1: Channel Enhancement

In e-enabled B2B World, “Channel enhancement means using internet technology to enhance
sales by adding an electronic sell channel and using the same technology to enhance the
corporate buyers ability to buy as one consumer (e-procurement).”

Enhancing the buying/selling channel: The channels are the communication platforms for
different stakeholders. In B2B world, the buyers and sellers are in constant fight for control
over the channels. The sell channel components for transactions include the product catalog,
merchandising, product search and configuration, virtual shopping baskets, tax calculations,
shipping logistics, and secure payment transactions. The large companies are mostly
benefitted by the web-enabled buy channel than the web-enabled sell channel. This is because
web buyers can save on the indirect procurement costs. As a web seller, the costs are saved by
allowing the customers to configure the products online which helps in adopting just-in-time
approach and reduction in inventory costs. The e-businesses have given the companies a
global platform to perform their business. The companies in one end of the world is able to
cater the customers in another end of the world. E-business allows companies’ presence to be
felt globally. However, the growth is comparatively low because of tax, language, cultural,
legal and regulatory barriers.

Enhancing the customer service channel: In today’s customer-centric economy, services

play a major role in the growth of any business. Services are the one of the biggest issues
faced in the e-commerce space. Data warehousing and data mining technology has proved
beneficial in e-customer services. Additionally, an effective CRM software and fully
integrated ERP system takes e-customer services to a different altitude by the automated
processes and real-time transactions.

Web 2.0 and Channel Enhancement:

Web 2.0 technology enables customer self-service. The customers are empowered to deal
with the transactions and the usage with the user-friendly interfaces provided on the internet.

Sales Perspective:

1. Easy creation, distribution, modification, and changing of contents.

2. Network collaboration will help improving the efficiency of information exchange by
avoiding sole dependency on the emails or face-to-face meetings.
3. Easy retrievability and manipulation of data related to sales from company’s as well as
public data bases without involving the technical staff.
4. Virtual teams can be formed and work can be carried out collaboratively and disbanded at
will. Community building web 2.0 tools are readily available and easily accessible which
supports collaboration across organizational and geographical barriers.
5. Sales people can target potential customers through social networking sites. For e.g.
targeting the customers for youth accessories – the search can be modified by identifying the
members aged between 18 to 27 in one zone and identifying the same age category in their
friend groups (linking).
7. SaaS applications - The Long Tail – a phrase coined by Chris Anderson – it’s about the
business models of Amazon and Netflix which capitalize on the sale of niche products sold in
small quantities but in total accounted for a large portion of overall sales. The SaaS model
helps the tenants to capture their customers both at the heads as well as at the long tail.
8. There are SaaS applications that allow adaptability of application to language, region,
currencies etc. which again helps to dissolve the barriers and allowing the companies to do
business on a global platform.
9. The technology helps building long-term relationship for cross sell and up sell of additional
products and services.

Service Perspective:

Web 2.0 helps to increase the sales and improving customer experiences. AJAX
(asynchronous Java script and XML) is used by web 2.0 technologies that run RIA (rich
internet applications). AJAX is a method of building interactive applications for the web that
processes user request immediately. There are nine common AJAX tools enhances the
customer service.
1. Single page applications that allows single page check outs for internet buyers.
2. Precaching data captures and stores the details which allow the buyers to shop at their own
convenience.
3. Improved interface controls and effects allow viewing different products at the same page.
4. Auto completion of data – for e.g. entering zip code for state and city information.
5. Partial data submission – which does not compel user to complete entry in order to move to
another transaction.
6. Mashups – For e.g. locating the store with maps.
7. Outbound messaging – Building communities to accumulate news and ideas on products
and services.
8. Inbound messaging – Building communities to source ideas and getting feedback from
customers on new products and errors etc.

Stage 2: Value Chain Integration

A value chain is the series of activities that add value to the product provided by business.
The success of value chain depends on the cost leadership, differentiation, focus, innovation,
growth, and business alliances. Value chain integration is using e-business in order to
integrate the operations of the company, customers and suppliers. The companies use the
internet for implementation of e-SCM and e-CRM. A simple value chain of any company
would consist of product planning, procurement, manufacturing, order fulfillment, and service
and support. A highly integrated value chain creates greater value for the end customer by
delivering products and services more efficiently and effectively to the end customer. Value
chain integration is about agility, speed and visibility. The pressure on the efficiency of
supply chain is mounting because of short product life cycles. In order to adapt to the changes
and improve the efficiency of the supply chain, the companies have shifted their focus on
collaborative planning and forecasting. This has lead to the adoption of outsourcing and
partnership in order to improve the efficiency and compress the cycle time. The collaboration
has lead the companies to form an extraprise. The business models and strategies are planned
collaboratively within extraprise. The two important aspects with formation of extraprise are –
firstly, a well-tuned integrated information system and secondly trust and honesty. An
efficient ERP solution integrates company’s operation seamlessly to that of its partners,
suppliers and customers. With extraprise, each partner contributes skills, market access,
products, and ideas that is used to create a joint product. The collaborating companies market
to a common set of customers. These relationship brings value to both parties.

Web 2.0 and Value Chain Integration

The two main services provided by Web 2.0 technology to it users are – the interactivity and
personalization. From a business perspective, it is about passing on authority, empowering the
work force and linking and bringing the organizations together. Extraprise is about working
collectively towards a single goal. While Web 2.0 technology helps in communication and
gathering of information online, the mashups help in aggregating and analyzing the
information captured and provide an understanding of what the information means. There are
different types of mashups like consumer mashups, and business mashups. Mashups simplify
the process of retrieving data from multiple web sources by partially automating the process
and the data can be reused for another purpose. Mashup allows for rapid development of RIA
(rich internet applications). With its user friendly interfaces, it allows user to develop and
share highly customizable views of data both internally as well as externally without having a
technical expertise. Mashups generally provide a single platform to analyze, filter, and share
the live data across. The connectivity of web to the strongly integrated ERP solutions will
allow the customers and suppliers to access the real time information which proves quite
beneficial in the business perspective.

Stage 3: Industry Transformation

In industry transformation, the companies change the strategies, organization, processes, and
systems to achieve competitive advantage. The companies that are planning to create industry
transformation business model are aligning their strategies with the core competencies and
outsourcing the noncore area of the business. The value network management process helps
the companies to decide on noncore competency and outsourcing. Outsourcing has lead to the
emergence of ASP (application service providers). Application outsourcing refers to
deploying applications over the internet rather than installing them locally. They offer access
to applications and related services on a rental basis via the internet. The e-partnerships and
outsourcing is getting the companies closer and with the linking of their internal processes
through the internet, new markets, new customers, new opportunities are created.

Web 2.0 and Industry Transformation

An example of Web 2.0 and industry transformation.

SITA Air Transports

The company accesses and shares information via the internet from televisions, laptops,
mobile phones and personal digital assets from any corner of the world. Consumer choices are
driving new technologies. There are 3.3 billion users of mobile phones and 1.4 billion people
use the internet. New generation consumers are digital-savvy.
Travel 2.0
The innovations in the ATI is driven by the digital-savvy consumers. According to them 90%
of the consumers carry mobile phones while they travel and they expect the information
relevant to the journey be made available to them via mobile phones.
Travel 2.0 empowers the consumers by delivering the fare search engines, location tracking,
user-generated content, and geo tagging. Future digital advancements by them include
wireless broadband such 3G and wiMax which will allow internet usage while flying,
powerful mobile devices like Apple’s iphone and Google’s Android platform – again will
allow usage on and above the ground, a mobile web that converges with customer
applications, rich mobile interactive environment, context-aware applications combining
personal preferences and social networks and with all these innovations they are looking
forward to timeliness, increased turnaround, and increased safety.

SITA Air Transports is driving industry transformation via collaboration and new IT
products.

Stage 4: Convergence

Industrial convergence can be defined as converging of two or several hitherto separate

industries. Convergence is a function of e-business but it also is a function of industry
deregulation, globalization, changing customer demands, and increasing competition. Some
factors should be managed in order to realize convergence which include alliances and
partnerships, customer relationships, customer information, corporate brand, facilitating
technology, innovation, and regulatory environment. The innovative technologies are
undoubtedly one of the most important drivers of industrial convergence but a number of other
factors like regulation, standards, business model innovation and industry channel structure.

Web 2.0 and Convergence

Convergence of Web 2.0 and SOA Concepts:

The philosophies of Web 2.0 and SOA cater different user needs. In the recent times, the
researchers are trying to prove the greater potential as a result of combining these two
technologies. One of the example of convergence of these two philosophies is IoS – Internet
of Services. User friendly web based interfaces has lead to the total transformation as far as
the users are concerned.

Table 1: Features of Web 2.0 and SOA concepts:

Web 2.0 SOA (Service Oriented Architecture)
Communities that aim to bring together their SOAs are about the cross-organizational
users by means of common purpose such as integration of services. The organizations are
social networking and knowledge sharing. enabled to setup loosely coupled business
transaction with other companies in order to
automate the business transactions.
Tools and platforms that allows its users to SOA facilitates interorganizational integration
create and share the contents with vast of distinct services. It acts as a central
audience. Mashup platforms that allows user integration layer (EBS – Enterprise Bus
to pick functionalities or contents from System).
different sources, allows to mix it with other
resources and exposes it for further reuse.
Online collaboration tool support – users can SOA based application development reduces
work online – share online – some of the development time because of the reusable
examples are Huddle workspace, online application building blocks.
brainstorming etc.
 Financial Flow

Figure 1: Internet of Services (IoS) Basic Architecture

The figure shows the basic architecture of (IoS) which is a combination of technologies and
principles from both Web 2.0 and SOA. It allows for resource access via web registered in
platforms and that can be searched, tagged, and mashed up according the requirements of the
users. The host services are provided by arbitrary stakeholders. The channels like PCs and
mobile phones can be leveraged in order to use the platforms. The services provided like
interoperability services allow the organizations carry out real-time business-to-business
transactions. The interconnection between the presentation-layer focused web applications to
the internal SOA implementation would be of great value to the enterprises as this would help
their services to reach the web for further use by customers and trading partners. The
technologies are changing and are focused on empowering the users to collaborate and
integrate the different set of applications available on the internet. The major aim of such
platforms for creating enterprise mashups is to provide businesses with speed, flexibility and
agility. The web 2.0 and SOA unification provides the techniques and design principles that
strongly facilitates the active consumption of web-based resources with its user-friendly
interfaces.

3. Web 2.0 Collaborative Business Model

The business models are about business configurations, value proposition and revenue model.
In this digital-savvy generation, web is playing a major role in change and affects the nature of
the business in many ways. Web 2.0 technology has played a major role in bringing the
people, process, and technology together. The e-business concept has brought the businesses
together through partnerships. The major aim of businesses in the present era is working
collaboratively with similar goals of profitability and timeliness.

The MCM business model is one of the web 2.0 collaborative business model.
Societal Environment
Flow of Goods and Services

Figure 2: Institute of Media Communication Management Business Model Framework

The elements of the MCM Business Model:

1. The Social Environment is about the outside influences on the business model like legal,
cultural, ethical, and the competition in the market.
2. The Features of specific medium is about the transaction and interaction over a specific
medium. (Blogs, communities, etc.)
3. The Potential Customers is about the target customers and the expected value addition.
4. The Value chain is the involved people vital in the production and delivery of products or
services.
5. The Features of Specific product is about the design and service experienced by the
customers.
6. The Financial Flow is about the revenue generation.
7. The Flow of Goods and Services is about the processes within the company.

The above business model is about maximizing the collective intelligence through interactive
exchange of information. Some of the examples for the above business model would include
e-Bay’s user recommendation system and Amazon’s reviewing system.

4. Conclusion

With the Web 2.0 technology, the businesses are changing. The customer are able to make
themselves heard and at the same time able to interact on a many-to-many scale rather than
one-to-one or one-to-many. The Web 2.0 technology has played a major role in the successes
of Amazon and e-Bay. The commercialization of the Web 2.0 offering is still in its initial
phases. Though there are a lot of benefits achieved by the businesses with the Web 2.0
technology, but ‘HOW’ of maximum utilization with gathered information is not yet answered
completely.

5. References

 Kalakota, Ravi & Robinson, Marcia, c2001, e-Business 2.0 Roadmap for Success, Addison-
Wesley, New Jersey, USA
 Norris, Grant; Hurely, James; Hartely, Kenneth; Dunleavy, John; Balls John, c2000, E-
Business and ERP – Transforming the Enterprise, John Wiley and Sons, Canada

 Schroth, Christoph & Janner Till, 2007, Web 2.0 and SOA: Converging concepts enabling the
Internet of Services, IEEE Computer Society, 1520-9202

 Price Water Coopers, 2008, Technology Forecast – A quarterly Journal summer 2008 viewed
on October 25, 2009, http://www.pwc.com

 SITA Aero, 2009, Delivering Industry Transformation Throught IT, viewed on October 29,
2009, http://www.sita.aero/content

 Dion Hinchcliffe , 2006, ‘Creating Real Business Value with Web 2.0’, 22 Feburary,
Enterprise Web 2.0, viewed on 27 October, http://blogs.zdnet.com/Hinchcliffe

 Pettey, Christey, 2008, ‘Nine AJAX based tools to improve performance’ viewed on October
22, 2009, http://www.gartner.com