MIS Related Issues

ASOS.com & MIS RELATED ISSUES

‘‘Despite the spectacular dot-com bust a few years ago, the Internet has markedly changed the way we do business.” (Reynolds, 2004, 78)

Conducting business in the digital economy refers to the use of Web-based systems, on the Internet and other electronic networks, to accomplish some form of e-commerce. Networked computing is helping some companies excel and is helping others simply to survive. Generally, the collection of computing systems used by an organization is defined as Information Technology (IT). In the developed countries, almost all medium and large organizations use information technologies, including e-commerce, to support their operations. IT, in its narrow definition, refers to the technological side of an Information System (IS); it includes the hardware, software, databases, networks, etc. An IS collects, processes, stores, analyzes, and disseminates information for a specific purpose. It processes the inputs (data, instructions) by using IT and produces outputs (reports, calculations). It includes people, procedures, facilities and it operates within an environment.

MIS refers to the management of IS’s and it raises a lot of concerns, such as global, e-commerce, software system choices, ethical, social and operation strategy issues. (Turban et al, 2001)

The aim of this paper is to examine five selected MIS topics and analyze specifically one or two of the occurring issues of each topic; then, connect these issues to the ASOS.com enterprise.

The paper begins with a brief observation of the background of ASOS.com. Initially, the selected topics and issues, derived from relevant literature, will be described. Next, a discussion of whether each issue is a problem for ASOS.com or not is presented. Furthermore, a reflective paragraph follows. The paper ends with the conclusion section and the references.

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ASOS.com

Asos.com, is the UK’s largest online-only fashion and beauty store, attracting over one million visitors a week. Its name stands for ‘As Seen On Screen’ and it was chosen to show the brand’s intention, to supply the public with outfits similar to the styles of celebrities. Asos.com targets 16 to 34 year olds; it offers women’s fashion, menswear, accessories, jewelry and beauty products. It provides potential customers browsing its content, with a number of unique features. For example, individual catwalk model videos of most clothing items on the site, and a fashion blog, which is frequently updated with articles relating to celebrity and entertainment.

Asos.com is greatly admired for its large variety of fashion and beauty goods and for the speed at which it keeps up with the latest fashion trends. (http://www.asos.com/)

Asos.com’s headquarters are located in Camden Town, in North London. The company was launched by Nick Robertson in 2000. Since then, the online company has seen significant growth. Over Christmas season of 2008, it reported a 100% increase in sales and for the financial year ending 31 March 2009, it reported a revenue of £165,395,000.

Asos.com is being run by a board of three directors and two non-executive directors.

It is a PLC, quoted on the AIM (Alternative Investment Market) part of the London Stock Exchange. AIM is not as strict in its rules as the main market; it therefore, helps smaller companies to raise capital through the sale of shares.

Asos.com chose to use the web channel, since researches have shown that online sales have been increasing faster than any other sector. It has targeted young people, for these represent around 60% of online shoppers. To attract them, it offers a diverse range of brands and products. Above all, it offers a pleasurable shopping experience, by ensuring that the website provides much more than a customer would expect from a shop. The site, also, provides more choices, competitive prices, new styles and, above all, convenience.

While growing, Asos.com has developed a more complex structure. It has worked hard to keep up with changes in technology. The website is being kept up-to-date by constantly adding new products and product lines.

Moreover, Asos.com uses other communication channels to drive growth. These include a monthly magazine of 116 pages and an e-mail newsletter that is being sent to 1.8 million users each week. In addition, it distributes PR pieces in other publications and encourages word-of-mouth recommendation. (http://www.asos.com/)

GLOBAL MIS/RISKS

Designing websites for a global audience

The designing of successful web-sites that present information about products and services is a relatively recent occupation, which introduced new issues and challenges that designers were called to face.

It is well-known that some web-sites seem to be more efficient than others. They are more often visited and more purchases occur. Very little is reported in the literature on web design and the evaluation of the factors that formulate a successful web-site. However, many studies have been made, in order to empirically test the features, often mentioned by trade journals and vendors, as being critical to design a successful web site.

The roles of a web-site are many and important; some of them are: marketing research, marketing tool, public relation machine and means of payment. Web sites are basically an interface between the costumer and the firm.

The web sites are being designed in order to facilitate organizations, to carry out business’ activities by using Internet technology. On their web sites, each organization promotes and sells its products or services, provides catalogs, technical support and obtains useful feedback from its consumers. (Udo and Marquis, 2001/2)

According to Udo and Marquis, there are eight factors that contribute to the design of an effective web site:

* Download Time (response time)

* Navigation

* Graphics Usage

* Interactivity

* Cohesion

* Consistency

* Use of Frames

* Amount of Advertisements

(Udo and Marquis, 2001/2)

According to Tilson, R. principles like simplicity, satisfaction (feedback) and versatility (flexibility) are also very important in designing e-commerce sites.

In fact, Tilson describes eight factors, with which the designer achieves the following:

* Simplicity: doesn’t compromise usability for function.

* Support: user is in control with proactive assistance.

* Obviousness: makes objects and their controls visible and intuitive.

* Encouragement: makes actions predictable and reversible.

* Satisfaction (feedback): creates a feeling of progress and achievement.

* Accessibility: makes all objects accessible at all times.

* Versatility (flexibility): supports alternate interaction techniques.

* Personalization: allows users to customize.

(Tilson et al, 1998)

Asos.com has very successfully designed its website for a global audience.

As already mentioned, the website offers to potential customers a large variety of unique features, such as catwalk videos, a fashion blog, a diverse range of brands and products, a pleasurable shopping experience, competitive prices, new styles and convenience, in order to attract more users and set itself apart from other similar websites. The company tries to keep up with changes in technology by frequently updating the website, which is also kept up-to-date by constantly adding new products and product lines, according to the latest fashion trends.

Its global success has been recognized through many awards such as:

% Sep 2002: E-commerce awards – Highly commended

% Feb 2005: More Magazine Fashion Awards – Most Addictive Online Shopping

% Oct 2008: Aim Awards – Company of the Year

% Nov 2008: Company High Street Awards – Best Online Shopping

% Mar 2009: Cosmopolitan Online Fashion Awards – Best Online Retailer

(http://www.asos.com/)

E-COMMERCE AND ITS ISSUES

“Electronic commerce is taking off both in terms of the number of users shopping, as well as, the total amount of people, who are spending via Internet based transactions”.

(Tilson et al, 1998)

E-commerce is gaining importance rapidly, in today’s business environment. The practice of e-commerce has been in existence since 1965 and has attracted the interest of many pundits. Most companies accepted and adopted the e-commerce technology faster than any other technology in the history of mankind. The reason is that the benefits are plenty; by creating a web site they can be seen all around the world, reach out to new customers, have lower transaction costs, meet their customers’ expectations and needs, provide new services and products and therefore, remain competitive.

(Khan, 2008)

E-commerce presents enormous opportunities for both consumers and businesses in the world. The self-service enabled by it, allows consumers to conduct a wide-range of activities. They can access thousands of online sites and purchase anything, from groceries to books, cars, credit-cards and loans. As Mark Hurst stated: “It’s ease of use, it’s ease of use. Why doesn’t the industry get that?” (Andrews, 1998)

Legal and Ethical issues in E-Business

Internet technology has posed new challenges for the protection of individual privacy.

Computer information, regarding Internet users, is generated every day through credit card purchases, telephone calls, magazine subscriptions, video rentals, mail-order purchases, banking records and local/state/federal government records. If this information is put together and minded properly, it could reveal a user’s credit information, driving habits, tastes, associations, political interests and much more.

It is possible to record many online activities, including which websites a user has visited, which newsgroups or files he has accessed and what items he has purchased over the Web. Some organizations use this information to better target their offerings. Others monitor the Internet usage of their employees to see how they are using company network resources.

A new data analysis technology called NORA (non-obvious-relationship-awareness) offers even more powerful profiling capabilities to the government and the private sector. NORA can take information about people from sources like employment applications, telephone records, customer listings and ‘wanted’ lists, and correlate relationships to find obscure hidden connections that might help identify criminals or terrorists.

Cookies are another noteworthy issue. Cookies are tiny files deposited on a computer hard drive, when a user visits certain websites. Cookies identify the visitor’s Web-browser software and track visits to the website. When the visitor returns to the site, the website software will search the visitor’s computer, find the cookie and know what that person has done in the past. Then the site can customize its contents for each visitor’s interests.

There are several more ethical/legal concerns occurring from the use of IT. For example, another issue is the protection of intellectual property such as software, digital books, digital music, or digitized video. It is extremely difficult to protect intellectual property, when it can so easily be copied and distributed. In addition, there is the matter of the ‘spam’ messages and the computer theft/fraud (stealing personal credit card information). (Laudon and Laudon, 2005)

Asos.com guarantees privacy and security over credit card purchases for the website visitors. There have been strong movements from the political view to protect the Web users’ privacy and security. Additionally, the online industry has preferred self-regulation to privacy legislation for protecting consumers. In 1998, the online industry formed the Online Privacy Alliance to encourage self-regulation to develop a set of privacy guidelines for its members. The group promotes the use of online seals, like TRUSTe, certifying websites adhering to certain privacy principles. There has also been created an additional industry association called Network Advertising Initiative (NAI) to develop its own privacy policies to help consumers opt out of advertising network programs and provide consumers redress from abuses.

On top of the legislation, new technologies are available to protect user privacy during interactions with websites. Many of these tools are used for encrypting e-mail, making surfing and e-mail activities appear anonymous, preventing client computers from accepting cookies etc. Asos.com plans to use such activities in the short-run, to ensure its visitors privacy. (Laudon and Laudon, 2005)

SOFTWARE SYSTEM CHOICES

To buy off-the-shelf packages or develop from scratch

The acquisition of new software and hardware can bring dramatic applications that will change an organization. Managers must be prepared to make risky acquisitions that will have a significant impact on the firm. There has been some movement towards outsourcing and strategic alliances to reduce the time required to develop vital applications. Buying instead of making is one strategy to bring change more quickly in the firm. However, the purchase decision is one that usually warrants advice from systems professionals. Software can be bought from a large number of companies. Manufacturers of large computers often sell proprietary software for them, especially operating systems. Companies like Computer Associates sell a great deal of software for large-scale computers.

The main attraction of buying of-the-shelf packages is to avoid having to develop a custom system. Custom programming is expensive and time-consuming; therefore, when a package is available, it should be considered.

The major advantage of using a package is cost savings. The package developer expects to sell a number of packages to recover the investment in developing it. The cost is thus amortized over a number of users. The cost to the developer though is usually higher than the development of a single application would be, since the package must be general enough to be used by a number of customers. This increased generality makes the package larger, more complex and often less efficient to operate than an application specifically developed for a single application. (Henry and Lucas, 2000)

The ‘make or buy’ decision is always a difficult one for management. The availability of new technologies in the marketplace and a movement by firms to get back to their core competencies, have led many companies to select the ‘buy’ option.

Because of the high cost and long time required to develop software, most managers look first at whether they can buy existing software and modify it, if necessary, to avoid programming an application from scratch. (Henry and Lucas, 2000)

(Henry and Lucas, 2000)

Asos.com’s managers had to face all these difficulties in order to make a decision of whether to develop their own custom system or buy existing software and modify it, according to their needs. They could have depended upon outsourcing to develop and operate their applications, or choose to retain part of their IT functions and to partially outsource some activities, which I believe would be the best decision for the company. Unfortunately, there isn’t much information in the Asos.com website of how the organization’s software systems were developed.

ETHICS / SOCIAL ISSUES

Information ethics relates to standards of right and wrong in information processing practices. Organizations must deal with ethical issues relating to their employees, customers and suppliers. Ethical issues are of high importance, for they have the power to damage the image of an organization and to destroy the morale of the employees.

Ethics is a complicated area, since ethical issues are not cut-and-tried; they vary between people, cultures and countries. What may be regarded as ethical by one person may be regarded as unethical by another. (Turban et al, 2001)

Displacement of employees with Information Technology

IT offers many benefits to the organizations. A key benefit of IT is for example, the reengineering of work; it provides operations with many benefits such as elimination of production waste and reduction of operating costs. On the other hand, redesigning business processes could cause millions of employees to lose their jobs.

As Rifkin (1993) said:

‘‘We will create a society run by a small high-tech elite of corporate professionals […] in a nation of the permanently unemployed. ” (Laudon and Laudon, 2005)

Some argue that relieving bright, educated workers from reengineered jobs will result in their replacement to better jobs in fast-growth industries. However this does not apply to unskilled, blue-collar workers and less well-educated, old managers.

Consequently, IT has created new ethical dilemmas, in which one set of interests is pitted against another. For example, many of the large telephone companies in the USA are using IT to reduce the sizes of their workforces. Voice recognition software reduces the need for human operators by enabling computers to recognize a customer’s responses to a series of computerized questions. Competing values at work are, therefore, developed and groups are lined on either side of a debate. Companies argue that displacing employees with IT is ethical, since they have the right to use IS’s to increase their productivity and reduce the size of their workforce, in order to lower expenses and remain in business. The employees that are being displaced argue that their employers have responsibilities against their welfare and that their displacement with IT is unethical. (Laudon and Laudon, 2005)

Asos.com, as an online corporation, occupies much less personnel than traditional fashion and beauty industries. The company hires high-educated, IT experts to run the operating software and keep the company’s website updated with the most innovative features. Displacement of employees with IT is not an issue for Asos.com, although, the latest movement of businesses moving into the digital economy, could be an issue for less and less workers are needed.

STRATEGY AND IS / INITIATIVES

‘‘Competitive Advantage is at the core of a firm’s success or failure.” (Turban et al, 2001)

Ensure continued, powerful Competitive Advantage

Computer-based IS’s have been enhancing competitiveness and creating strategic advantage for several decades.

A competitive strategy is defined as a broad-based formula for how a business is going to compete, what its goals should be and what plans or policies will be required to carry out those goals. Through its competitive strategy, an organization seeks a competitive advantage in an industry.

A Competitive Advantage represents an advantage over competitors in some measure such as cost, quality, or speed. A strategic IS can assist an organization to gain a competitive advantage through contribution to its strategic goals and the ability to considerably increase performance and productivity. (Turban et al, 2001)

M. Porter’s competitive forces model is the most popular framework for analyzing competitiveness. It is used to develop strategies for organizations, with the purpose of increasing their competitive edge. Porter’s model identifies five major forces that could endanger an organization’s position in a given industry.

These forces are:

1. The threat of entry of new competitors

2. The bargaining power of suppliers

3. The bargaining power of customers

4. The threat of substitute products or services

5. The rivalry among existing firms in the industry (Turban et al, 2001)

Asos.com is an online-only corporation; this fact alone provides the company with a

strong competitive advantage over its (traditional-clothing-stores) competitors. Asos.com possesses a competitive advantage, mainly, in a matter of cost/expenses, since it doesn’t own stores and doesn’t occupy vendors and other kinds of staff (cleaning staff, security, etc.) For Asos.com, Internet technologies offer very powerful tools that can increase success through traditional sources of competitive advantage. For example, apart from low cost, Asos.com has an excellent customer service and superior supply chain management. Low costs contribute to more advantages such as competitive prices and supreme quality for the company’s products.

Consider and Decide IT Strategy: be a leader, a follower or an experimenter

Strategic management refers to the conduct of drafting, implementing and evaluating cross-functional decisions that will enable an organization to achieve its long-term objectives.

IT contributes to strategic management in many ways. For example, it can contribute through innovative applications, competitive weapons, changes in processes, links with business partners, cost reductions, relationships with suppliers and customers, new products and competitive intelligence.

Porter’s model identifies the forces that influence competitive advantage in the marketplace. Managers are interested in the development of a strategy that aims to establish a profitable and sustainable position against these five forces. To accomplish this, a company needs to develop a strategy of performing activities differently from a competitor.

There are many different strategies that managers can choose, according to which copes best with their operation. Some of them are the following:

Cost Leadership Strategy: Produce products at the lowest cost in the industry. A firm achieves cost-leadership in its industry by thrifty buying practices, efficient business processes, forcing up the prices paid by competitors and helping customers/suppliers reduce their costs.

Differentiation Strategy: Offer different products, services, or product features. By offering different-better products companies can charge higher prices, sell more, or both.

Niche Strategy: Select a narrow-scope segment (niche market) and be the best in quality, speed or cost in that market.

Innovation Strategy: Introduce new products and services, put new features in existing ones, or develop new ways to produce them.

There are many other strategies such as Growth, Alliance, Operational Effectiveness, Time Strategy, etc. (Turban et al, 2001)

Asos.com has tried to implement Niche strategies. It has chosen a relatively small

market segment (it targets consumers aged 16 to 34) in the clothing/fashion and beauty industry and it has tried to be the best in cost, quality, and speed of the deliveries (same day delivery service through the use of MetaPack delivery management software and CitySprint’s SameDay Courier solution). Given that it is an online enterprise, and it can therefore keep expenses low, it demonstrates very competitive prices and a very wide range of products and brands. It also maintains high standards of quality for its products. (http://www.asos.com/)

REFLECTIVE PARAGRAPH

I believe that the main lesson learnt here is that the use of IT has many benefits, but also many drawbacks. IT and the use of information systems can bring rapid change to organizations, enhance productivity and reduce costs. A firm established on the World Wide Web has countless advantages, which is why most medium and large organizations and even small ones create a website. In contrast, numerous concerns derive from the exploit of IT. Global, software system choices, e-commerce, strategy and IS initiatives, and ethical, social and political, are only some of the subjects that raise a great deal of issues. However, there are many options to be considered for the use of IT and most of the matters can be resolved.

CONCLUSION

To conclude, a brief observation of the background of ASOS.com has been given. The five selected MIS topics have been examined and the occurring issues have been analyzed. Moreover, a discussion of whether each described issue is a problem or not for ASOS.com has been presented. Finally, my reflective thoughts have been outlined, in the reflective paragraph.

Last of all, mentioning that in the 21st century we find ourselves living in the age of computerization, is essential. There is plenty room for future development of IT and IS. Information and Communication Technologies for Development, for example, refers to the application of Information and Communication Technologies within the field of socioeconomic development or international development and its concept is intimately associated with applications in the developing nations. It is concerned with the direct application of IT approaches to poverty reduction. Information and communication technologies can be applied either in a direct (their use directly benefits the disadvantaged population) or in an indirect sense (facilitates the improvement of general socio-economic conditions). In many indigent regions of the world, legislative and political measures are required to facilitate or enable application of information and communication technologies.

References

Andrews, W. (1998) “At Far Too Many Sites ‘Buyer Be Lost’ Applies”, Internet World, Vol. 98, Issue 6

Henry, C. and Lucas, Jr. (2000) Information Technology for Management, McGraw-Hill, 7th edition, Ch. 15-17

Khan, K. M. (2008) Managing Web Service Quality: Measuring Outcomes and Effectiveness, Information Science Reference, Ch. 1,3

Laudon, K. and Laudon, J. (2005) Management Information Systems: Managing the Digital Firm, Prentice Hall, 9th edition, Ch. 5

Reynolds, Janice (2004) The Complete E-commerce Book: Design, Build and Maintain a Successful Web-Based Business, CMP, 2nd edition, p.76-79

Tilson, R., Dong, J., Martins, S. and Kieke, E. (1998) ‘Factors and Principles Affecting the Usability of Four E-commerce Sites’, Proc. Of the 4th Conference on Human Factors and the Web

Turban, E., McLean, E., Wetherbe, J. (2001) Information Technology for Management: Transforming Business in the Digital Economy, Wiley, 3rd edition, Ch. 1, 2

Udo, Godwin J. and Marquis, Gerald P. (2001/2), ‘Factors Affecting E-commerce Web Site Effectiveness’, Journal of Computer Information Systems, Vol. 42, Issue 2, 10-17

The ASOS.com web-site: http://www.asos.com/