How Critical is Planning and Modelling in Delivering a Potentially Successful E-Business - Essay Example

Looking back thirty years ago, it would have been difficult to imagine that one day, people would be able to run their businesses successfully through a small box: namely, computers. Beforehand, the concept of running a business which was successful had to be handled with care. People would get up early in the morning and get dressed accordingly and set out for the day meeting their clients and traders, and the better half of the day would be spent dealing and bringing ones equipment in to the shops. But today, in the 21st century, times have changed; now, even young people are getting in to businesses, and all is from the comfort of one’s home or office. Now, people dress up casually; gone are the days of shiny shoes and ties. Today, even dressed in jeans and a t-shirt, one can run a successful business online, and a 24-year-old today can very well be a chairman of their own company. One may ask how it is possible to explain this phenomenon. It’s called e-business. The letter “e” in the word stands for electronic, and it’s a business run on computers through the internet and has web pages attached to it. This phrase can be described as the usage of information and communication technologies (ICT). This is like a support holder for all the activities which are related to the businesses. The most important activity or a supporter of any business is purely dependent upon commerce, which is the taking and giving of any services or products which happen to lie between groups or individuals or, in our case, businesses. Now, the function of the e-commerce is to use the ICT to allow the relationships of the businesses with groups or with other businesses to grow. The first time that e-business came into being was because of the marketing and internet teams of IBM in the year 1996. This was according to the former chairman of IBM, Louis Gerstner. The e-business basically gives leverage to various companies to connect their internal and external information with more ease and flexibility, and it also allows a good platform to be able to work more intimately with partners and suppliers which, as a result, allows them to have a better rapport with their customers. The process which is involved in e-business is comprised of the value chain, buying of electronics, and managing the supply chain. The orders which get placed should be processed electronically, and customer services should be handled and a very good co-operation should exist between the business partners. The way that this business is conducted is usually by the internet, web, extranets, intranets or maybe by the combination of both (Biondo Communications, n.d.). But getting to the new forms of e-businesses which are creating havoc in the net industry consists of web 2.0 applications in which one includes RSS , blogging, instant messaging, digital TV, pod casting and mobile marketing; today many new devices have also been introduced to keep up with the e-marketing (Chaffey, 2002). There are also certain terms which are included in using e-business namely (International Economic Development Council, 2009). These entities and terms work in four basic categories: business towards business, business towards consumer, government towards consumer, and government towards business. There are many advantages of opening this kind of business, as well as disadvantages. They allow to have easy communication amongst the buyer and the seller as well as providing the marketing skills to be more polished. But the downside is that it has to be operational 24/7 in order to cater to all, because due to this, more coverage is available on research. And, it also allows the chance to take in new business models. and better the customer support system if needed. Having talked about e-business, it is essential to know how important planning and modeling are, in order to make sure that the new venture on which we are embarking will be successful. So as to achieve this, we need to pre-plan extensively. In order to start an e-business, it is important to have a plan. But what exactly is a plan? One way of looking at it is as a road map, which is like a guide for ones development and operation of the business. An example of this would be that one never sets on travelling without thinking of a destination, just exactly like that way a plan is essential to run a business. Goals and targets need to be set. If we take a business plan as something of a document which is written that gives a very good outlook in the sense that the company is goal oriented, it is basically known as document which is used to show to the investors, or to the future managers. Where a business plan is of a special type, it’s called a business case; it is something which gives a meaning to a new project. This goes in a company, meaning to legalize a particular investment namely of funds and the people who are watching happen to be the company’s head and managers who are senior (e-Business Plan Tutorial, 2009). One may ask why it is absolutely imperative to create business plans. Firstly, it is necessary because in order to run a business, it is essential to have this plan. When starting any business one needs funding from various organizations. Now, these funds can be from a bank or a financial market or a future business partner. In case a new person who is venturing in to his own business needs to have a plan otherwise no one will take him seriously. The second reason why a plan is important, is to acquire other resources. By this, I mean that it isn’t always so that only banks want to see it but also it can be landlords who want to see before entering in to a new relationship with someone regarding a business. Another associated reason is that if one is setting out on a new business venture and wants the members to join in, and all of a sudden they ask for a business plan and one doesn’t have one, then it becomes very odd. Therefore, it’s better to be safe then sorry. To make sure that ones business is run properly, it is best to write down the points in order to manage the business plan better. Business plans are vital for forecasting future balance sheets. A plan also allows one to have a real approach to ones business, writing everything down also allows one to avoid any problems. Also when writing a plan it saves one from making mistakes. For example if the plan on paper makes no sense then it is very difficult for it to mature, and I completely understand and agree with having a plan before starting a e-business, it certainly saves a lot of hassle and money and with a plan in hand. It gives a very mature look and it seems that the young businessman knows what he’s talking about. It also shows that the young business person has his/her assets in order. The same rules apply to normal business as well, but in e-business, the internet is so vast one has to recognize and include the capabilities of the net, as the inter net is global. So in the plan one has to consider the payment options as well for example to show the price range in US dollars or the local currency. Because the internet is on for 24/7, so the plan must include this difference in web hosting and customer service. There are also companies who offer products and services for planning, such as client centered web services to improve customer service. Having discussed the planning aspect of the e-business and how important it is for the success of the business, we know need to discuss the e-business model. Let us see how we can elucidate this model. It is a model which gives across the impression of the company as to how it operates, but what is it its availability? In terms of the services or the products, how will it be able to gain the profits required and, does it have the potential to adapt to newer technologies appearing in the market markets (Burke, 2009)? E-business model The e-business model describes the rationale of the business, what is it that it wants to achieve, what is the motivation behind it or even how does it expect to gain the revenues back? Market analysis is the key to insure that ones concept is accurate and successful, because the market analysis makes sure to tell what customers like to buy and at what costs will they be able to afford. (Burke, 2009). In the concept, what is important to know is that there has to be the concept of goals and objectives. These objectives should be based on the goals assigned ,so it makes it easier for the new businessperson to set up a successful business. Then, in this, there are corporate strategies that guide how to implement the business strategies. Intensive market research should be conducted in order to decide on the concept so the proper feedback is received. Price is also an important part of the e-business concept and it should be based on market research, the way the price is set is according to the competition of the price and it should directly affect the market share. It is essential that the price provides genuine worth to the customer so as to make sure that the customer is satisfied with the purchase of the product or service (Burke, 2009). Value Proposition When this occurs, the attempts to offer better value than competitors so that the buyer will benefit most with this product (Burke, 2009). There are certain restrictions which one has to be concerned with like the price level should be reduced, there should be improved services, such as the ‘I click” checkout. Then the products should lead to an increase in production. The main advantage of this value preposition is to focus on the well-being of the customers. There has to be Operations which happens to be on Web and it is done in a way to increase the partners in the form of a supply chain. Another word value of chain describes a line of reasoning set of steps, which could also happen to be processes involving businesses. For example, in design or production or even sales, if we look at another company which makes things, it delivers value. The model of value chain aims at an overall efficiency and lowering of cost by enhancing and lowering the value of each process involving process. Each step involved is independent, and can be given out on loan to another company. As a result, the value chain becomes a supply chain where a company utilizes the inputs and activities of other companies in its process of manufacture (Burke, 2009). Source of Revenue The revenue source is wholly based on the business models used, as many revenue sources are easily available to have an e-business, and businesses which are on line will have three of these sources. Some of the sources of these revenues are usage of fees, sales commissions, licensing, agent commissions, affiliation ad advertising. Resource and Capabilities Resources are sometimes known as its requirements, for example employees with certain skills are needed to perform activities correctly and efficiently. The business concept contains business processes in the form of design and sales (Burke, 2009). Activities drive the need for resources there are some examples which show that these websites contain the planning and modeling in them. For example, there is a website such as cyber gold, which has a copyright for pay-per-view ads. By this I mean that the customer is able to enjoy clicking on the ads. Then, there is a thing called as open market, which has a copyright of electronic shopping carts. When one pays with credit cards, they use the socket layer which is secure (Burke, 2009). Then, there is sightsound.com which has a copyright for trading digital stuff; for example, downloading pictures on the net. There are number of companies which have internet business models, if the patents are easy licensed at rates which are affordable then the future of e-businesses is very bright. At the same time it is important to have employees working for you which are properly qualified in order for the company to grow well. In short, a business model includes a full description of the functions of the company as well as its adaptability to newer markets and technology. It is important that all of the above four components mentioned are included in the model and plan. Without a plan or even a model, it becomes impossible to be able to run a business to its full capacity especially with such a large competition. I will also state the names of the websites which are extremely successful, and have followed the plan and model mentioned above. They are boximan.com, letsbuyit.com, silicon.com, moreover.com, beenz.com, blackstar.com, blockbuster.co.uk, virgin.net and jungle.com. Besides these, there are other plenty of e-businesses which are doing very well, these days with the recession in the increase, and work being done through the net is far more successful. Some people might say that it is a lazy form of work, just sitting in front of the computer all day and not meeting anyone but just talking through the web. But this concept is wrong, this is highly effective as through the internet one is connected to the millions of people scattered all over the world. The most popular e-business is comprised of buying and selling of mobiles or electronics, writing or translations. At the end, I would like to comment that not just e-business, but any other form of business, too, needs planning and models in order to ensure success. With such a raise in newer and newer people opening e-businesses, it is important that one does their homework from before to make sure that ones new venture is a huge success from the onset. Bibliography Biondo Communications (2009). ‘E-Business / E-Commerce Applications’ Available at: http://www.biondocomm.com/sol-ebusiness-ecommerce.asp Burke, J. E. (2009). The E-Business Model. Available at: http://www.prudens.com/patens/ebusiness/busmodel.html Chaffey, D. (2001). E-Business and E-Commerce Management: Strategy, Implementation and Practice (Paperback). New York: Financial Times Press/Prentice Hall. ‘Fundamentals of e-Business Planning’ (2009). Available: http://myphliputil.pearsoncmg.com/student/bp_turban_introec_1/PlanFund.html [ ‘International Economic Development Council’ (2009). Economic Development Reference Guide. Available at: http://www.iedconline.org/?p=Guide_Ecommerce Read More