Unit 3 E-Business Systems

 

E-business takes into account the use of the internet, technologies and forms of electronic communication to assist in business activities. E-business systems allow businesses to stay informed with up-to-date information and be more competitive in their respective markets through tools such as transaction processing systems or business applications.  E-business systems can encompass any part of the organization.  These systems can include human resources, marketing, production, and logistics among other functions.  Considering their depth of functionality, it is easy to understand that E-business systems can easily permeate through the value chain of activities for the benefit of the organization.

E-business systems are created to help businesses to be more competitive.  In our world of constantly developing technology, almost all companies utilize some type of E-business system to attempt to gain a competitive advantage or in some cases just to keep up with the competition. One example of a company that successfully used e-business systems earlier on was Intel.  It helped them in terms of operational efficiency and strategic positioning.  They automated their order management and information delivery system.  Intel built online relationships with customers and customized these relationships based on the type of customer.  These steps have contributed to the success and long lasting reputation of Intel. Another example would of an E-business system would be a leader in transaction processing on-line, Paypal. Paypal claimed a 91 per cent market share of the online payments market but their strangle hold on the market has decreased considerably due to increased competition. Paypal is considered one of the original online payment processing companies but in some ways it has hurt the business. Due to a lack of early competition, Paypal suffered from stagnancy while other competitors created a product that was easier to understand and use. These substitutes found a competitive advantage and have used it to take their own share of the market. PayPal’s brand name remains its largest asset and the company will need to hold onto and draw more customers with their security efforts. They are known to be one of the safest online payment processing businesses and they will need to retain that quality in the consumer’s eyes.

According to Michael Porter, businesses can have a low cost strategy, differentiation strategy, combination or niche strategy. With any of these strategies, it is possible to include e-business systems.  For example, Walmart has a low cost strategy and they have a continuous inventory allows the consumer to specify what they want in their laptop and their online system ensures that that takes places smoothly. Another benefit to having an E-business systems is that it allows employees to have up-to-date information. Information like real time inventory levels is pertinent to sales representatives that are out in the field trying to make sales for the company.  If a sales representative has out-of-date inventory level information and ends up making a sale for a product that is out of stock, then the order will have to be changed or cancelled.  For example, adidas America, an athletic apparel company, saw inefficiencies with their sales force knowing inventory levels while making sales calls.  The common practice was prior to a sales meeting; a sales representative would check inventory levels at the warehouse. When they made the sale, they would return to the office to place the order only to find out that the product would be out of stock. The order would then be lost or the order would have to be changed.  Nevertheless, customers would be inconvenienced when they found out that adidas America could not fill their order as promised.  In order to overcome this problem adidas America implemented Atlas2Go, a salesforce automation application. This application allows sales representatives to use their mobile devices in order to access real time inventory levels through the internet.  Since the sales representatives were able to access up-to-date information it eliminated change orders or cancellations.  The application only cost $10,000 and adidas America was able to pay for the application after one order.

Looking over some examples, it is obvious that organizations have been able to take advantage of E-business systems all over the world. From companies like Adidas, Paypal, and Wal-Mart, all of these businesses were able to use E-business systems as a competitive advantage in their respective industries. The use of E-business systems has become a requirement in this generation from the largest corporations to the smallest mom and pop businesses.

 

References:

Alsalloum, O., (2011). Achieving Competitive Advantage with Information Systems. Slideshare. Retrieved from: http://www.slideshare.net/DrOthmanAlsalloum/achieving-competitive-advantage-with-information-systems

Asay, M., (2012). PayPal is bleeding market share and it’s all e-bay’s fault. The Register. Retrieved from: http://www.theregister.co.uk/2012/07/18/ebay_paypal/

O’Brien, J. A., & Marakas, G.M. (2011). Management Information Systems 10th Edition. McGraw-Hill/Irwin. 272-290.

Phan D. (2003).  E-business development for competitive advantages: A case study, Information         and Management, 40:581-590.

Unit 2 - Business Intelligence

Business intelligence (BI) moves past raw data.  It is a collection of decision support technologies for the organization with the purpose of making more informed decisions.  It allows for businesses to analyze their raw data and use it to make improved decisions which achieve strategic goals.  It is incredibly helpful to businesses because the organization can have a much deeper understanding of the customer. BI systems will not only aid in the ease of tracking a customer’s dollar purchases but will also track other things like what types of items the customer usually purchases and what they might purchase in the future. BI used to be limited to select groups that had the financial capital to afford it. Now that the cost of acquiring and storing large amounts of data has decreased, many businesses have been taking advantage of the benefits that BI systems provide.

Benefits

If used correctly, BI can save money by allowing a company to effectively meet its customer’s needs. The business is able to not only identify what the customer wants but how often the customer will want it. It can also help with other aspects of the company such as logistics. Companies can truly see what is going on with the company.  For example, Pfizer uses an Informix Corp.'s ETL tool, Ardent Datastage, to create a distributed database that allows it to see and evaluate sales and product trends (McGeever, 2000).  The access to this information is almost immediate and it allows for quick adjustments to solve problems identified in the data (McGeever, 2000).  With BI, traditional and non-traditional sources of data can be used.  For example, Dallas Teachers Credit Union (DTCU) was able to use geographical data analysis to increase its customer base of potential clients by identifying areas that would likely need the services of a credit union. (McGeever, 2000). 

Another benefit of BI is the ability to create ad-hoc reporting (LogiAnalystics, 2013). “Ad-hoc reporting is a model of BI in which reports are built and distributed by nontechnical end-users” (LogiAnalystics, 2013). While running a company there are many times when answers to questions like, “why have orders dropped from last year versus current year” or “what is our average selling price for XYZ product for ABC customer?” need to be derived quickly.  BI assists companies answer questions like these and give insight as to how to improve business operations as well as the company’s bottom line (LogiAnalystics, 2013).

Costs

Business intelligence is very expensive and high risk.  A single report may cost the business upwards of $20,000 (Standen, 2010) According to Deloitte, some companies actually see BI as a threat to their business (6 Real Life Examples of Successful Business Intelligence Systems, 2014).  To have a successful BI system, the right applications and technologies will need to be utilized. Teams have to be formed and employees are taken away from their primary work load in order to help identify the scope of the BI project, its primary purpose, needs of the end-users, and test the reports for accuracy. Since employees are taken away from their primary responsibilities the company is losing efficiency from their employees to work on business operations (Linthicum, 2013).

Cultural issues

In developed countries, one can easily see the value of BI.  In less developed countries, where some companies are still using paper and pen to record information, it is much more difficult to see the use of these systems. An example would be in Jamaica where sometimes simple data records are not even up to date.  In local law enforcement, some Jamaican citizens are on the roads with as many as thirty citations due to the lack of an adequate data system to keep track of traffic violations. At the Jamaican department of motor vehicles, it is also difficult to understand the archaic ways the organization. The customer is still expected to complete the paperwork by hand and the desk clerk then inputs this information into a computer. This would be an excellent starting point to use a BI system but the culture is just behind the technology curve. To make things more automated and then to move towards BI in Jamaica, the mindset has to change and people will have to be trained.  At the same time, people will be hesitant since they know that technology means a possibility of less human labor is needed.  It will be difficult culturally to move towards BI in environments where simple things like using an ATM machine or paying with debit cards are looked at with suspicion by some citizens.

Implementation issues

It is difficult to get companies to adopt BI.  Creating business intelligence systems does not necessarily mean that they will be utilized.(Tichenor, 2013).  To try to increase adoption, the business should involve employees in every stage of the business intelligence process (Tichenor, 2013).  One example is involving research conducted concerning the adoption of BI systems in Taiwan. It was found that for a BI system to really be effective, the system needs to provide convenient and flexible functions for all users. There should be a transparency of information.  Employees should feel a sense of empowerment and ownership.

It is not easy to justify the expenses of BI to employees.  It is very expensive and may not at first work as expected (Tichenor, 2013).  It is also a process that can take quite a long time to install, build, and deploy. For some larger BI systems, it can take as long as six months. A lack of acceptance by the end user is an issue that can actually cause an increased workload which is the exact opposite of its intended purpose. A way to overcome this is to show how it has worked and how it has improved the organization and thus is beneficial to the organization (Tichenor, 2013). Ensuring that employees can visually see the improvements due to business intelligence is important and can ultimately motivate employees to effectively use the tools developed for the organization’s success.

References:

6 Real Life Examples of Successful Business Intelligence Systems. (2014, June 17). Retrieved from Matillon: http://www.matillion.com/insight/6-real-life-examples-of-successful-business-intelligence-systems/

Chaudhuri, S., Dayal, V., Narasayya, V., (2011). An Overview of Business Intelligence Technology. Communications of the ACM, 54(8), 88-98..

Hou, C., (2014). User Acceptance of Business Intelligence Systems in Taiwan’s Electronic Industry. Social Behavior and Personality, 42(4), 583-596.

Linthicum, D. (2013, August 20). The true cost of integration in the world of BI. Retrieved from http://tdwi.org/Articles/2013/08/20/True-Cost-of-Integration.aspx?Page=1

McGeever, C. (2000, June 24). Business Intelligence. Retrieved from http://www.computerworld.com/s/article/47371/Business_Intelligence?taxonomyId=120&pageNumber=2

N.a. “BI Encyclopedia: Ad-hoc Reporting.” LogiAnalytics. 2013. June 22, 2014.  Retrieved from http://www.logianalytics.com/bi-encyclopedia/ad-hoc-reporting>

Standen, J. (2010, February 8). Estimating the cost of Business Intelligence. Retrieved from http://www.datamartist.com/estimating-the-cost-of-business-intelligence

Tichenor, M. (2013, Septemeber 12). 4 BI Implementation Challenges and How to Overcome Them Retrieved from http://www.logianalytics.com/blog/4-bi-implementation-challenges-and-how-overcome-them

Zeng, L., Ling, L., Duan, L., (2012). Business Intelligence in Business Computing Environment. Information Technology Management, 13, 297-310