Introduction of E-Business Adoption for Conventional Businesses.
The next wave is coming and it will no doubt carry some to the promised land of success, while others drown in its wake. The internet as we know it is not a tsunami and e-commerce is no flash flood. Rather the web is a series of waves that continue to roll in, fundamentally changing the velocity and experience of business.
The first thing to realise about the internet is that you are out of control. I am not talking about the rate of change and all the confusing technologies. I am talking about the power in a relationship and the relationship between the business and its customers. In the old world you sold to customers but in the new world a customer buys from you. If the business understands this and takes it to heart, they will figure out how to win when the centre of power or action had shifted to the customer.
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More than ever before in the business world, competition is fierce. Continuous improvement is no longer merely an advantage, it is a requirement. Only those companies that evolve will survive, and evolution now happens in real time. The most successful corporations today are those that evolve through experimentations, they y make bold moves quickly, they aggressively seek feedback from all directions, and they reinvent and adjust constantly. The most successful corporations of tomorrow will refine this process and will strike a balance between staying focused on a vision for the future and unceasingly seeking new paths by which to realise it.
The path of e-business success is shared, and companies who win the internet economy can’t do it alone. In e-business this means that buyers and sellers alike must reap tangible benefits from their participation in online market places and web based commerce channels. In the early days of e-commerce, the focus was on the buyer. Indeed one of the most dramatic changes the internet has to date affected is transfer of power of buyers, in the form of information, choices, and value. The next wave though 1
Figure 14.12 and table 14.8 in Appendix 1 shows that there is a large variation in speed of service delivery by ISPS; so it is important that business view their sites performance in comparison to industry standards.
DEFINE MAIN ELEMENTS OF E-BUSINESS STRATEGY FOR SUCH BUSINESS
The rush to the Internet is the gold rush of the new century. Whether a company has already invested millions to implement an e-commerce presence or whether still devising the approach, most companies know they need an e- business strategy.
E-business is the best paradigm available to business since the advent of the PC, bringing previously unimaginable revenue and profitability as well as efficiencies in value chain management (inventory, production, product development, marketing, customer service and sales). The highly visible successes have been numerous.
Apply Fundamental Principles
The process of establishing an e-commerce business and building adoption around it is no different from establishing a new business in the traditional non- Internet world. The same principles apply. Following are the 10 basic principles for building an e-business strategy:
- Not all customers are created equal. "Not all customers are created equal, every customer matters." In reality, some customers matter more than others. The most valuable customers - i.e., those in "the sweet spot" - have the greatest need for the product or service and are, therefore, willing to pay more, close the deal faster and implement more quickly.
- The key to success is focus. Without focus, resources are wasted reaching the wrong audience or appealing to too few with a poorly developed message. Focus provides structure and perspective to any e-business endeavour. Focusing on the sweet spot allows companies to provide meaningful solutions, delivered with meaningful language, so more customers are likely to adopt.
- The market is already defined. Companies create categories, not markets. There are over 140,000 SIC codes each with its own language and strategic business issues. Within these SIC codes, there are departments (HR, IT, sales), business functions and job titles. Markets should be viewed as an aggregate group of buyers that share the same characteristics, have the same issues, respond to the same messaging and have the same purchasing needs.
- Market leaders select segments they can dominate and ultimately own. Siebel Systems' success is based on this premise. The ability to choose and focus on a segment is crucial to success. Siebel Systems started by targeting sales management. They have since expanded into related segments such as field service.
- All technology is complex and customers require more assistance to adopt new technology. Most people resist change. E-business is a new paradigm that changes the way people work and as with other technologies requires assistance. Providing the pre-sale education services (motivation, education, needs analysis, evaluation, and justification) that facilitate selection and post-sale implementation services (installation, customization, conversion, training, maintenance and support) that foster use are crucial to changing behaviour and increasing adoption.
Always on Time
Marked to Standard
Companies tend to ignore the service required for adoption. Yet, service is crucial to selection and use. For example, one well-known high-tech company recently found the primary difference between their best (most satisfied) and worst (most dissatisfied) accounts were the level of service that each account was buying. It is not surprising that the account that purchased the most service was the most satisfied.
- High touch is critical to changing behaviour. High touch, or active marketing, is an important mechanism for changing behaviour. Active marketing involves in-person interaction and gives users a chance to understand why they need to change their behaviour. Users can get their questions answered, so they are more likely to overcome any fears about the proposed solution.
- Those who define the playing field ultimately win. One of my favourite sayings is, "The best way to predict the future is to create it." The best way to create the future is by building and supporting the market ecosystem needed to reach the market. A market ecosystem consists of working relationships with all partners in the value chain who facilitate selection, purchase and use of a company's products and services. These relationships can define the playing field for adoption of a new technology or creation of a new category.
Partners can include other technology companies to create a complete solution, associations that provide education, instructors and trainers who lead courses and consultants who provide pre- and post-sale services.
- The market ecosystem is different for each product and its corresponding target or sweet spot. One size does not fit all, i.e., one market ecosystem does not reach all customers. The partners who understand and serve HR are different than those that focus on IT. Just as customers have different interests and strategic business issues, so do partners.
- The best way to dominate is through the associations that reach and influence the target segment(s). Associations consist of a group of people that share common interests and objectives. Through the association, they are able to network with their peers, exchange information, share ideas and receive education. There are over 100,000 associations, including the National Human Resources Association for HR executives and Society of Information Managers for IT executives.
- There needs to be a fit between the customer target, their issues, the message and vehicle. The customer target, the issues, the message and vehicle need to be aligned. It is important to understand the target segment's issues, tailor a message that addresses those issues and deliver the message through the vehicles that reach them.
The more things change, the more some things remain the same. The guiding principles for increasing adoption of e-commerce are the same as the guiding principles for increasing adoption of any technology. The more you follow these principles, the more quickly businesses will adopt your e-business strategy.
Various restructuring options available to such businesses
Before you move online you must accept that to a certain degree you will be siphoning current customers away from the real world store. In other words: be willing to cannibalise their business. If you commit to a strong online operation, its success will eventually more than compensate for the losses they experience in the bricks and mortar stores. The future of business is going to be played out on the internet.
When bricks and mortar stores move online, they will need to be aggressive and decisive and perhaps even a little ruthless. Once they go public they will be instantly affecting the way potential customers perceive their company. They must make sure when they open their doors for virtual business they are ready for consequences. There are various sources needed and by these sources companies can target a number of different segments via e-commerce (see Appendix 2).
To restructure bricks and mortar companies they must analyse their internet potential. This can be done by companies tailoring their website to their products, analysing their human resources and most importantly talking to their customers. With these they can have a good idea about the number of solid customers who are willing to buy their products online, they could create a survey, and with the data they can analyse how enthusiastic their clientele are about e-commerce. They can have a thorough understanding of the impact of the site on their company.
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Many online businesses lack the funds and manpower to successfully manage a busy website. Bricks and mortar stores often have the same problem, after all order tacking and fulfilment are complex processes. Luckily lots of people find salvation in hiring companies known as ‘turnkeys’ to do the work for them. Turnkeys are companies that accept and process orders, ship products and perform a variety of other services for retailers.
Restructuring will also be needed for their day to day operation, as no matter what site you build, even of its one page of simple text you want to hire at least one temporary information technology professional. As it would be a disadvantage if such companies spend precious time learning HTML when an expert can do a better job in a shorter amount of time. By hiring an IT person the company can benefit from a professional looking shopping site.
Parsons et al (1996) considered organisation restructuring from sell-side e-commerce perspective. The referred to stages in the growth of what they refer to as ‘digital marketing organisation’ this was organised in four steps.
Ad Hoc Activity- At this stage there is no formal organisation related to e-commerce and skills are dispersed around the organisation. The web site may not reflect the offline brand this can be seen in service organisations like libraries the only information that is stated on the website is their opening and closing times. Another problem with ad hoc activity is that the maintenance of the web site will be informal and errors may occur as information becomes out of date.
Focusing the effort- this stage entails efforts being made to introduce a controlling mechanism for internal marketing, which can be achieved by setting up a steering group that may include interested parties from marketing and it with legal experts.
Formalisation- at this stage the internet marketing will have achieved a critical mass and there will be a defined group or separate business units within the company to manage all digital marketing.
Institutionalising capability- involves formal grouping within the organisation, at this stage there are formal links created between digital marketing and a company’s core activities.
Steps leading to internet pure play
Quelch and Klein (1996), built-up a five-stage model which, referred to the development of sell-side e-commerce. For existing businesses like Tesco or Sainsbury’s the stages for development are:
- Image and product information
- Information collection
- Customer support and service
- Internal support and service
- Transactions this would make the customer base much easier and efficient to communicate.
The international benchmarking study (DTI 2000) has recognised a stage model based from their research results which focus on buy side applications. These stages can be organised in a ladder format from the development of moving up from below. (See Appendix 3)
Companies start off using e-mail to communicate internally and with suppliers which is Step 1, step 2 entails before moving to offering product information and availability checking step 3 would be going up by online ordering Step 4 is any online payments, Step 4 would be online progress tracking and finally when all these are achieved and the e-business is running in accordance these are stages are all integrated together which is Step 6.
The characteristics of a successful e-business system compared to conventional business
Successful e-Business also requires a new kind of commerce system that adapts to changing business conditions between one transaction and the next. The available information must be reinvented at each encounter, uniquely suited to the needs of the customer and the business situation.
In the Internet economy, the quality of the user experience is the key to successful competition. Like a physical store, products bring people in, but the environment, service, and overall satisfaction with the experience are what keep them coming back. On Amazon.com, for example, 60% of purchases are by repeat buyers. Why? Because of a simple, friendly purchasing interface and a system that tracks user interests and presents helpful suggestions and interesting information on each product.
The Internet affords the potential for true real-time interaction, for you to create a unique virtual environment for each user every time you are in contact. But achieving true eCommerce, doing business in a fundamentally different and more profitable way over the Web, takes more than slapping a Web site on top of client/server business systems with a few CGI interfaces or server pages. In the digital marketplace, change is the only constant. The available information must be reinvented at each encounter, uniquely suited to the needs of the customer and the business situation.
To achieve and sustain this kind of advantage, you need a new kind of commerce system that adapts to changing business conditions between one transaction and the next.
The overall architecture of an e-Business system is important, but proper abstractions achieved through object technology are the foundation of a flexible e-Business system. Correct separation of presentation, business logic, security functions, and content determines the flexibility of the system and the pace and effectiveness of e-Business processes. To deliver truly dynamic, real-time communication, these relationships must be established on a per-transaction basis, as each page is assembled for delivery to a user e-Business processes lend themselves to this kind of abstraction. Any Web Site can be realized as a composition of only three kinds of information elements:
The good news is that there is no more dilemma of how to stake a fast claim in the Internet economy without ravaging current resources to get there. With the right E-Business system and your own content, applications, and business knowledge, you can create a compelling Web environment for every stakeholder in your business. Your company can use the Web to compete like never before, to reinvent itself monthly or hourly.
For companies interested in e-business there are many suggestions that it they can implement to the running of the business. By leveraging their reputation and current marketing by including existing store name in the Web address; this can help consumers identify the organisation and with this they can prominently feature the online site in all advertising and in-store activities. Showing pictures of all products being sold.
The organisation can also improve its e-business by having a sign-in sheet right in the store so customers can leave their e-mail address; in order for the organisation to target its promotional offers by e-mail as well as face-to-face.
There needs to be a lot of contact between intermediaries firstly the organisation may need to contact the local media when launching a site; and then contact the media again with "human interest" story ideas, providing the list of customers who are happy with the service.
They can also develop partnerships with local corporations to offer online shopping from the office; and team up with local Internet Service Providers (ISPs).
Consumers are now able to access information on demand and seek out the products and services that interest them. Not only has technology changed the way consumers make their purchasing decisions, it has also revolutionised how companies market their products to consumers. The customers’ role has become so dominant that companies are shifting their focus from being marketing oriented to being market driven.
Some examples sources of value for consumers, can help organisations looking to go into e-business succeed these include: Emulating superior service through a user-friendly Web site; Being responsive to customers delivery time requirements; Enhancing the quality of products delivered with refrigerated delivery systems; and using innovative ideas to meet the needs of different customer groups, for example, special services for the aged and disabled.
Appendix - The Various sources needed and the number of different segments that can be targeted via e-commerce
- Moving to e-business, Leslie Wilcocks,2000
- E-Business Principles & Practice, Jennifer Rowley, 2002
- Mastering E-Business, Jonathan Groucutt, 2004
- E-commerce without tears, Naomi Langford, 2001
- E-volve or die.com, Mitchell Levy, 2001
- Business Information Systems, Paul Bocij and others