Supplier |
€ 5 |
Supplier |
€ 15 |
Accounting software |
System Storage / archiving Interface with bank |
Weekly reports Performance overviews |
Management |
|
Supplier
Supplier
Purchasing € 3 Own costs € 10 Profit € 10
€ 2
€ 23
|
Company
Purchasing € 30 Own costs € 22 Profit € 8
€ 60
|
Client
Purchasing € 75 Own costs € 20 Profit € 5
€ 100
|
Consumer |
Accountant audit
Reporting software
|
Audit Security
Overviews Analysis tools Alarms
Financial administration
Creditors positions Turnover per supplier
Turnover per customer Turnover per product
|
Purchasing
Marketing
|
Figure 5. Analysis of where the profits in a value network can be found
Drawing the value network also helps you to visualise smaller contributions to an end product. Not every business provides a product that the consumer can recognise. Accounting software for instance is untraceable, but the role of accounting software in a generic process such as ' financial administration ' can be visualised, including contributions from other suppliers and the results for the different departments and stakeholders( Figure 6).
Figure 6. Qualitative contributions in a value network
The objective of drawing a value network is to gain insight. This insight should lead to recognising the opportunity to structure a chain differently. It is by taking advantage of those opportunities that you can add value as a business. The supplier of accounting software may, for instance, also develop integrated reports if it emerges that these are important for the buyers of the financial administration.
Eastcom Systems
Eastcom Systems is a Singaporean company established in 1992, as a vendor providing productivity solutions to help customers manage their telecom expenditures. One of their main products was a call accounting solution to help companies to analyse their PABX telecom costs, e. g. by breaking down the call charges in terms of departments and employees and types of calls( internal, long-distance, etcetera). In 2007 the management decided that selling licenses only was not the way to stabilise revenue, which was declining due to competing services „ through the Internet cloud ‟. The company therefore chose to offer cost management services such as Telecom Expense
Management, targeting large companies like Fedex, Citibank and Standard Chartered Bank. Such companies generally have no overview of how much money is wasted or overspent on telecom costs. Eastcom ' s business model is to help these companies manage and reduce their telecom costs. For large global companies, telecom costs can reach as high as 1 or 2 % of their turnover. Eastcom Systems can supply its software products as licensed solutions or through a comprehensive service for companies wanting to outsource this part of their cost management. The core of the product is a business intelligence system with data mining
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