Group 10 – Technology of the Week – De Belastingdienst & wehkamp.nl
Dear Blog Reader,
Our Technology of the Week Project is focused on Digital Transformation and Business Models. We have critically evaluated the digital transformations at De Belastingdienst and wehkamp.nl.
De Belastingdienst is a Dutch organization that operates within the authority of the Dutch Ministry of Finance. Their goal is not maximizing profit but securing tax collection from companies and individuals. As of 2012, De Belastingdienst introduced AGS (AanGifteSysteem) to file customs tax declarations, replacing the 25-year-old system ‘Sagitta’. With this new online system De Belastingdienst got rid of the renowned blue envelopes, where customers had to fill out the forms provided in the envelopes manually. Subsequently employees of De Belastingdienst had to digitize all data provided.
This transformation towards AGS has, among others, had the following positive implications for De Belastingdienst.:
- Reduction in response time for both customer and De Belastingdienst
- Reduction in human errors
- Rise in security level
- Government-wide access
- Lower personnel/administrative costs
The transformation however has also brought along several downsides, being:
- Large initial costs of software/hardware development and employee training
- Costly capacity inefficiencies
- Threat of system breakdowns and hackers
- Challenging for non-IT savvy customers
wehkamp.nl transformed its business model using an offline catalogue towards an online webshop. wehkamp.nl’s main reason for this transformation was their view on the changing needs of consumers. The way of browsing through a catalogue and ordering via mail, was perceived as out-dated and cumbersome. wehkamp.nl started as an experiment, yet quickly became their main investment. The digitalization of their systems enabled wehkamp.nl to retain their position as best and most personalized warehouse in fashion, electronics and furniture in the Netherlands.
For wehkamp.nl the transformation has had the following positive implications:
- Long Tail of products can be offered
- Customized marketing
- Value Co-Creation due to ‘customer community’
However, wehkamp.nl’s new online business model also has downsides:
- Possibility of system breakdowns
- Loss of customers not into IT
wehkamp.nl today finds itself in a market with many more substitutes. Also the e-commerce market faces higher threats of new entrants. wehkamp.nl also faces more rivalry as business models can easily be copied. Competition will then merely be on price. Bargaining power of buyers has also increased, due to increased comparability. On the other hand the bargaining power of suppliers has reduced for the same reason.
We have found that both De Belastingdienst and wehkamp.nl feel satisfied with their digital transformations. A major difference between these two organizations lies in their goals and industry position. Where De Belastingdienst is operating as a monopolist within its own industry, wehkamp.nl is operating in the competitive online fashion, electronics and furniture industry. By introducing AGS De Belastingdienst introduced a new procedure for all their customers that by law are required to use this system. However, wehkamp.nl has found that the transformation has radically changed the way of doing business. Focus has shifted towards value co-creation and tailored offerings.
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