E COMMERCE
e-Business stands for electronic business. It means conducting business through the internet through buying, selling, serving customers and collaborating with business partners. It was first used by International Business Machines, IBM in 1997 during their launch of a thematic campaign.
Increase in technological innovations has pushed major corporations to rethink their business strategies in terms of the internet through e-commerce because of its new cultures and capabilities. e-Commerce is used by organisations to buy and sell parts and supplies from other companies in the globe over the internet. Examples of organisations that use the internet very conveniently include Amazon.com that sells books. There is also direct selling, called e-retailing for any commodity ranging from computer software to hardware, as evidenced by Dell computers which reported internet sales in millions of dollars.
There are however disadvantages associated with e business such as lack of security, accessing the market portion that does not use internet, initial installation costs, maintaining up do date information, and losing the live customer touch by customer care. This has however been countered by building of securities in todays browsers, along with the numerous advantages of speed, convenience and reductions in operational costs. Computer security is done through the availability of digital certificates. According to Lowson and Burgess, 2003 p. 153 163, a firm can employ a number of operational strategies that can be customized to a particular situation to offer substantial benefits in driving best practices in e-Business. According to Carter, 2001 e commerce doesnt just stand for electronic commerce but evolving commerce as well, as the web opens a whole new market for goods and services. Mofazali, 2000, p. 6. So along the methods that were used to design traditional business systems there are new emerging methods of designing e-Business systems.
REPORT TO MANAGER
Proposal and Justification for an e-Business Strategy.
e-Business has many advantages as compared to the traditional way of doing business and are measurable as outlined as follows -
Convenience
Our customers and suppliers will be available on a 24 hour basis. This is the kind of flexibility that any business person or customer would value a flexibility that is not only based on time but space as well, as workers can conduct business from wherever they are and at their convenient time. For instance if customers could only access us for 10 hours a day, they can now do that for 24 hours a day.
Wonderful way of advertising
There is so much advertising opportunity on the internet in various sites where the public would discover a commodity or service they otherwise never thought of. Secondly advertising companies can reach us in large numbers and we will have the opportunity to choose the advertising company with which to work. If we previously spent 3000 dollars on advertising now it would only be the cost of establishing a hub.
Speed
Most of e-Business is done through information exchange by the click of a mouse. It is more useful for products such as software, music, movies, e-books, services and journals that are information intensive. The cycle time is drastically reduced online because business processes now become parallel and simultaneous rather than sequential. Electronic Funds Transfer, EFT facilitates these transactions even faster. For instance if it took up to 6 hours to make an order, receive and pay for an item, it would only take less than 5 minutes to fill in online details.
Global access
A global market is created through the internet as buyers and suppliers are able to access each other through the internet. Additionally, the buyers have the freedom to choose products and services from anywhere in the world. If we previously had 0.05 per cent market share in the whole world, we will now grow to 1 one per cent and steadily continue growing.
Movement towards a paperless society
This has been evidenced through the reduction of depending on paper work and red tape. It involves the whole processes ranging from sourcing to ordering and paying.
The Main Changes and How They Will Be Achieved.
There are factors to be considered before implementing an e-business strategy and these include -
substantial resource commitment in developing a new game plan
redefining product lines to make them on-line saleable
upgrading of the computer systems and coming up with websites
training personnel at all levels so that they can be acquainted to the internet
hiring new staff and working with external consultants and other service providers for technical expertise.
According to Reynolds and Mofazali, 2000, p. 104, the implementation of an e-Commerce website can give rise to many performances, scalability and integration problems that only time can solve. As much as these difficulties will be faced, and looked at in terms of heavy upgrading costs and equipment acquisitions, time and workforce and future uncertainties it finally pays off. To finally enjoy the fruits of moving to e-Business, it is very necessary to keep up with current technological innovations and changes. After an e-Business implementation the following benefits will accrue -
Development of a more cost-effective communicating and marketing strategy.
This is through the acquisition of a vital web presence in which case our customers will access us from wherever they want and at whatever time that they want.
Reaching of new markets world wide.
We will gain more customers whom we did not previously have. We will get new ideas and methods of promoting our products online, and this will allow us to reach our target market all over the world.
Reaching of local customers and prospects more effectively
More and more people are becoming comfortable using the internet and moving away from the traditional sources of advertising. Thus if our organisation has an aggressive web presence, we will make better business sense for our local customers. This gives a leeway for developing new markets further.
Cutting of advertising and marketing costs.
Online advertising is more efficient and less expensive than traditional advertising. It even reaches more people. We may argue that there is that population that has no access to internet but access to internet is something that is happening at an increasing rate. More people access the internet today than they did yesterday and more still will tomorrow. Secondly, sales training can be substituted for online seminars through training videos and tutorials as opposed to expensive hotel bookings for trainings.
Streamlining some processes
These include processes such as ordering through taking of online orders by implementing an online ordering system that allows one to do away with manual paper work or ordering through the phone. Secondly, our sales can be integrated with fulfillment of orders and delivery to customers thus speeding up the process.
Cutting of communication and telephone costs.
Our company will drastically reduce communication costs as well as paper letters, which would be totally eliminated. We will further implement live help where there will be a support or sales staff online on a 24 hour basis. Customers would be able to chat and get immediate assistance. We could also develop Voice Over Internet, VoIP which should completely change the face of services through the telephone.
Traditional business systems are still in use. However, they are not entirely appropriate for e-Business systems and so there is need for different development approaches for e-Business systems projects. There are however those systems that would still be useful for a successful transition from the traditional methods to the current e-Business. These methods encompass the three primary processes that are enhanced in any business whether traditional or electronic. There are as follows -
Production processes
They are processes whose objectives are to create goods and services that meet the customers needs and wants. They include sourcing, procurement, ordering systems, replenishing of stocks, processing of payments, electronic links with suppliers, and production control processes. Traditionally, these are done through paper work and sending of physical correspondence with the help of telephone calls. The formats for traditional documents can be used for creating online documents for e-Business.
Customer-focused processes
These include sales and marketing and promotional efforts, internet selling, purchase order processing and receiving and making of payments, as well as customer support. These types of processes may not necessarily help in the generation of e based processes for instance live chat is only possible through e-Business.
Internal management processes
These include services by employees, training, communication, recruiting video-conferencing, and recruiting. Through electronic applications information flow between production and sales forces is enhanced and helps improve sales force productivity. Other methods include workgroup communications and electronic publishing of internal business information are, which are also made more efficient. Previously these processes were done through physical meetings so as to co-ordinate as there were no electronic systems.
Harmon, Rosen, and Guttman, 2001 p. 68 shows how business models need to be revised and business processes redesigned through computer architecture. It is necessary to have systems for developing e-Business at a fast rate. Traditional business systems had methods for developing them and they may not be appropriate for current e-Business. It is therefore necessary to do a research and see if these systems can work just as well. According to Gerald, King and Datchek, 2002, p. 302, there is need to shift from the traditional company view to moving up to a higher level of the enterprise view. Electronic business poses significant challenges for organisations as it affects the market, competitors and many activities. Gottschalk, 2006, p. 39. so again this shows that there is a necessity to upgrade methods for developing business systems and especially of electronic nature.
It is easy to integrate traditional business systems to e-business systems and gradually adopt a fully operational e-Business system. Kalakota and Robinson, 2004 p. 187. However, there is need for an upgrade as previously mentioned by Gottschalk, 2006.
Research Question.
What is the necessity of developing new methods for e-business rather than using the same methods that were used for developing traditional business systems, and what are these methods.
Necessity for change and the new methods
E-business research is currently one of the most actively researched areas due to the rapid advancement in information technology. e-Business applications have however advanced beyond traditional business transactions and services. They have come up with other systems to cover customer relationship management, CRM which was previously not there. Lee, 2008, p. 47. There are fundamental business processes that create any business and they have to have a basis for even transition from traditional to modern e-Business. Information systems integrate and support organisation wide business processes and functions from marketing, manufacturing and even human resources. These are shown as -
Production processes
These include computer integrated manufacturing, CIM that automate many of the activities that are needed in manufacturing. e-Business is aimed at increasing response speed and reduce production costs. It then requires quantitative analysis methods to cover both physical and information flows within a production system. These methods need various techniques and modeling tools as opposed to traditional business systems that were based on observations and instant decisions as opposed to quantitative research.
Customer-focused processes
It is important to note that retailing through the web is most appropriate for well-defined products and services and that are widely known. There are processes that make customers active participants in the marketing process as opposed to traditional business where the sales and marketing team looked for the customers and persuaded them to buy. Through this system, customers are empowered as they trade in friction-free market. AS opposed to traditional methods, organizations wishing to tap into the online friction free market need to develop methods in which to approach customers and communicate their value propositions online. This then calls for online tools such as questionnaire and surveys that may not be supported by methods that developed traditional business.
Internal management processes
Carter 2001 points out that developing a successful e-Business system require combining a unique set of business development skills as well as computer science. These involve the traditional business processes as well as new ones. It is prudent to ensure that web strategies are linked to business strategies for internal management processes to succeed.
Damanpour and Damanpour, 2001 p. 16-33 further cite three critical success factors for e-Business. These include creating a consumer-centric strategy for customer processes, embracing outsourcing for improving performance in business processes and use information management to differentiate your products. They also mention how some companies deal with security on the internet and advise that a strategy must be developed to avoid reducing returns on investment, thus making e-Business an attractive strategy to do business.
Since every business is unique, it requires unique e-Business solutions. That is why it is prudent to look at the business orientation of a company before suggesting an e-Business strategy. Businesses range from advertising companies to suppliers of various goods and services. It is also important to note that the size of the business also matters so for those businesses that will not have in-house resources it would be recommended for them to outsource though finding an e-Business solution provider.
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