E-Business and E-Commerce in Debenhams - Case Study Example

E-business and E-commerce in Debenhams You are to compile a report on the use of e-Business and e-Commerce in an organisation and the organisation is Debenhams. For the purposes of this assignment you are expected to produce a report from your investigation of the use of, or lack of use of e-business and e-commerce within your organisation. e-Business refers to uses of digital technology to support and implement business processes e-Commerce refers to business transactions made between the business, its customers, suppliers and other agencies including Government through the digital Internet. Specific content: 1. Carry out an audit of the uses of e-Business in the company. This should include: a. Means of capturing information for use in e-business processes i. e.g. Website, call centre, switchboard, IPOS, loyalty card b. Internal databases used by type and/or business function - Human Resources, financial, estates, inventory, supply chain, marketing, etc c. Telecommunication infrastructure used. i.e. How many networks LAN. WAN other, Internet Protocols on standard broadband /analogue networks. The main suppliers of infrastructure, e.g. BT , Cisco. d. The role of digital information in informing business decision making e. The use of government agencies that promote e-business and e-commerce. 2. Using the knowledge you have gained from this module, supported by further research of your own, carry out a critical analysis of the organisation's use of e-Commerce and its current and future role in the organisation. a. Examine the use of internet technologies (intranet and world wide web) in the organisation b. Examine the role of e-Commerce in the organisation as a means of gathering information to support business transactions c. Consider and form a view on how the organisation can and does make use of e-Commerce d. Examine if the company has taken advantage of government support and advice e. Consider and form a view on how e-Commerce will affect the business into the future Report Question 1 Company overview Debenhams is a department store; it was first established in 1778 in West End - London. The performance of the firm has been significant - presenting indications of continuous growth through the decades - a fact that led to its entrance in the London Stock Exchange. The firm has approximately 153 stores across Britain; the number of its employees has been estimated to 21,500. The last 8 months the firm's profitability was reduced under the influence of the global financial crisis; however, signs of recovery of the firm's performance have been identified - see also the performance of the firm's shares for 2008 and 2009 in Figure 1 - Appendix. Characteristics of corporate website In general, the website has the structure of a B2C (business to customer) system, i.e. a system used for the selling of products/ services to the website's visitors (customers). The information included is available to the website's visitors - the communication with customers seems to be the priority for the system's developers. The characteristics of the corporate website could be summarized as follows: the entrance and navigation in the specific website is quite easy - the material included has been appropriately categorized, in terms of speed the website can be characterized as extremely effective, images are used as possible to highlight the content - especially regarding the products available, communication with the customers is highly supported - telephone numbers are available for all organisational departments One of the most important advantages of the firm's website is the fact that the information provided covers a wide range of issues including the firm's products and services - those currently available to the public, the existing vacancies in various organisational departments - including the terms of employment in the firm, the firm's financial performance, the firm's environmental policies, the methods of payment available for online orders of products/ services and the firm's culture and mission. SWOT analysis a. Strengths The firm's website has significant advantages compared to the websites of competitors: the speed of the website is quite satisfactory, images are used in all pages to illustrate the firm's products/ services, there are many options of payment available and the security of customer's data is adequate - compared to the websites of competitors. b. Weaknesses The following weaknesses can be identified in the firm's websites: no reference is made to the firm's suppliers, there is no reference to the firm's IS provider or the firm supervising the corporate website - if any, it is not clear how a customer can be compensated in case of the website's failure. c. Opportunities Internet is used worldwide as a marketing tool; the number of visitors in commercial websites is continuously increased competitors would seek for cooperation with the specific firm - in case that they would not be able to survive in the market in the long term d. Threats the investments made to corporate websites are not always returned competitors have developed websites with similar advantages visitors in websites are not always expected to buy a product/ service Up today, the firm's managers have tried to keep the firm's performance almost intact from the international crisis; in the feature the ability of the firm to face the threats developed would be evaluated in accordance with the criteria - social and commercial - developed by then. 1. Means of capturing information for use in e-business processes The use of business tools by modern organisations is necessary in order for the organisational operations to be completed on time. In accordance with Wu et al. (2003, 245) 'across industries, firms have adopted e-business initiatives to better manage their internal business processes as well as their interfaces with the environment'. However, when are applied in practice, e-business tools can be proved to be quite demanding - requiring continuous monitoring and updating. In the firm under discussion, the e-business tools used for the development of the various business activities are: the website, the firm's telecommunication network, the organisational database and all the IT systems used in the completion of organisational tasks. E-business processes are also used in Debenhams in order to capture information - see the 'log - in' feature available to customers, a feature requires the provision of personal data of the customers. Through the website the firm's employees are able to capture the information required for the development of the firm's activities. In the website the numbers of the call centre and the particular departments of the firm - in accordance with the categories of the products - are clearly stated. Furthermore, the loyalty card is used by the firm as an additional tool for capturing information. 2. Internal databases used by type and/or business function Through the firm's website a series of organisational activities are performed: the 'jobs' section presents current vacancies in the firm as well as the procedure of hiring (HRM function); the firm's products/ services have been categorized (per type) and can be easily retrieved through searching in the firm's database - availability of products/ services can be identified using this feature (inventory function). An additional database is used for storing the personal data of the firm's customers (in the firm, this database has been named as personal data bank). The data related with the firm's stakeholders (suppliers, shareholders and so on) are kept separately - they are not accessible through the website. The firm's financial data are stored in a separate database - also appropriate protected; however, information on the firm's financial performance is available to the public - the firm's financial statements, i.e. those published in accordance with the law - can be viewed through the website. All firms that operate online follow the ethics and the standards set by the international and the local market (Resnick et al., 2004). On the other hand, the architecture of an organisational website cannot guarantee its effectiveness; it could only show the firm's potential to operate online under specific terms and offer to its customers a high level of support in all their transactions with the firm. 3. Telecommunication infrastructure used The choice on the IT systems used by a particular organisation belongs primarily to the IT planners; those will decide on the most appropriate technologies required regarding the firm's communication needs - both in the internal and the external organisational environment. The firm's website responds quickly to the visitor's demands; the speed from one page to another is high showing that the organisational network is tuned to work effectively both in broadband and in analogue networks. The name of the firm's suppliers - referring to the telecommunication - is not clearly stated. The structure of the firm's website is a typical one but its features are easily accessible - the speed of access and the presentation of data are quite satisfactory. This fact can be expected to have a significant influence on the effectiveness of the firm's website. The quality of intranet is highly appreciated by customers as it is also proved in the research made by Leow et al. (2000) where the views of managers of retail banks in UK were captured and it was revealed that 'the respondents are very positive (80%) about using the intranet as an ideal platform for all their information systems and only 20% feel its utility is exaggerated' (Leow et al., 2000, 135, see also Alvarez et al., 2007). The information gathered through the above described network - especially through the log-in feature available to customers through the firm's website - is further used for the development and the update of the firm's IT systems but also for the update of its products/ services - if required. The name of the firm's network provider is not available through the website. In a report published on 2002 it is noticed that Debenhams has chosen to install the DataCore Software for the store management requirements (Business Wire, 2002). In the past, the firm did not have a server; rather, servers of servers' providers supported the firm's website; as an example the firm uses the server of the DataMirror Corporation for storing and processing the wedding lists. In 2006 the firm installed the NPS (Netezza Performance Server) through which the capturing, process, exchange and storage of data across the organisation are expected to be improved (Netezza, online report, 2006). 4. The role of digital information in informing business decision making The use of advanced IT systems by modern firms is being promoted in all markets around the world; in the literature but also in the empirical research the level of technology used by a particular organisation has been found to be related with the performance of this organisation - either in the short or the long term. In most cases, the evaluation of the effectiveness of IT systems used in a business environment is a challenging task; technology - in all of its forms - may not affect the business activities at the level expected especially if the relevant initiatives are not carefully planned and monitored. In Debenhams, technology has been used in all parts of the business activity; the online presence of the firm is significant offering to its clients the ability to choose among the firm's products but also to be informed on issues that are of high interest for them - for example how to estimate their size or how to arrange the delivery of the chosen goods to their address. As noticed above, the firm uses a series of different databases in order to store data: the database containing employee information - this one will be used by the firm's HR managers to decide on the HR policies required - the database containing information on customers - this database is used by the firm's marketers - and the database including information on the firm's products/ services - this database can be accessed by customers and is used by them when having to decide on their orders - or just to review specific products/ services. 5. The use of government agencies that promote e-business and e-commerce. The use of e-business and e-commerce is highly promoted by the British government. Relevant agencies have been developed supporting the efforts of entrepreneurs across the country to update the technology used in their firms and adopt appropriate e-business or e-commerce schemes. An indicative example is the Radiocommunications Agency, the Directgov directory - which provides information to citizens on a wide range of issues including the e-business and e-commerce schemes available to firms in Britain. The Office of Government Commerce (OGC) also provides valuable information to entrepreneurs that are interested in updating the IT systems of their firm - potentials for funding of these schemes are also identified by the consultants of this agency. In any case, the adoption of a specific e-business or e-commerce scheme should follow the law related with the specific activity ensuring that the material promoted to the public responds to the products'/ services' actual characteristics and potentials. The promotion of e-commerce was recently reviewed by the British government; a relevant government report named 'interim Digital Britain report' was announced by the communication minister - Lord Carter. The publication of this report - which is considered to be a blueprint for the development of digital systems by the British enterprises - was welcomed by enterprises in Britain; in this context it is noticed that 'the report presents a 22-point action plan outlining the government's plans for the UK's digital transformation, which will include the upgrading and modernising of all wired, wireless and broadband infrastructure' (Computing, 29/1/2009, online report). Debenhams - as all other firms in Britain - are expected to be significantly benefited from the above report. Question 2 1. Examine the use of internet technologies (intranet and world wide web) in the organisation The effects of e-business tools on the organisational performance cannot be estimated with accuracy in advance. Using data related with four different industrial sectors Wu et al. (2003) came to the conclusion that 'while the communication and internal administration aspects of e-business positively affect performance outcomes, the more high-profile activities related to online order taking and e-procurement do not' (Wu et al., 2003, 245). In Debenhams, the use of internet networks - both internal and external -can be evaluated using specific criteria. Both these networks are easily accessible by the customers or their users - referring to the part of the firm's network that is accessible only to its employees; these networks are used for two different functions: communication and selling. Communication can have many different interested parties - customers, suppliers, shareholders, management team, employees at lower levels of the hierarchy or the state (governmental authorities that have to check the progress of the firm's activities). On the other hand, selling refers only to the promotion of the firm's products in the global and local market; selling involves in employees in the customer service department and the clients; it also involves - indirectly though - the management team and the shareholders. Potential customers can choose to log in - entering their data to the firm's personal data bank - and have quicker access to the products/ services available. Offers provided as part of the firm's marketing policies are also appropriately promoted in the corporate website - registered customers - as explained above - can have a premium right on existing offers - other benefits might also be available to the firm's registered customers who have the privilege to be informed first for the firm's offers on specific products/ services. 2. Examine the role of e-Commerce in the organisation as a means of gathering information to support business transactions The role of e-Commerce as a tool for gathering information can be evaluated using different criteria. In accordance with Arbore et al. (2006, 83) 'specific ICT organisational strategies - namely the outsourcing decisions - proved to be an important mitigating factor for size and location-based broadband disadvantages'. On the other hand, Karavdic et al. (2005) stated that the role of e-commerce on various organisational tasks cannot be evaluated using only relevant theories - e-commerce is a concept that is applicable in practice. It cannot be limited in theory. Regarding specifically the potential ability of a firm to gather valuable information through the e-commerce it can be noticed that such a target can be set but it requires appropriate planning. A firm can include in its website appropriate features that will operate as tools for gathering information that is necessary for the various business activities (e.g. feature for log-in - as in Debenhams - feature for the conduction of survey and so on). Through its website - on which the firm's e-commerce scheme is based - the firm can gather valuable information on the market trends and the customer preferences and characteristics. This type of information can be retrieved through: the forms completed by the customers when subscribed in the firm's database (log-in feature); the order forms completed by the customers (referring to the order of specific products/ services) and the forms related with the customer services department of the firm. 3. Consider and form a view on how the organisation can and does make use of e-Commerce In order to understand the firm's potentials on e-commerce it would be necessary to refer primarily to the characteristics of this concept. In accordance with Rosenbaum (2000, 161) 'electronic commerce (e-commerce) is an activity which takes place in a social context called the 'digital information environment'. In another study it is made clear that 'three firm capabilities are critical for superior firm performance in e-commerce: information technology capability, strategic flexibility, and trust-building capability' (Saini et al., 2005, 360). In accordance with the above, the firm could expand the potentials of exiting e-commerce scheme focusing in the development of trust between employees and customers but also in the increase of the website's flexibility - features could be added addressing significant teams/ individuals, like the funs of a football team, the children of local schools and so on. 4. Examine if the company has taken advantage of government support and advice The firm's mission is developed in accordance with the local market ethics. On the other hand, there are particular provisions on the promotion of green activities - i.e. activities related with the protection of the environment. The firm seems to have aligned its strategies with the government's view on environmental issues; in employment issues also a similar assumption can be made. As for the use of the government support, this is a rather difficult issue to be identified. There is no clear reference to specific governmental schemes in which the firm participates. It should be noticed at this point that citizens are very likely to be influenced by the government's suggestions on a particular firm (see also Thomas et al., 2005). The alignment of the firm's policies and mission with the government's principles and suggestions is quite important leading to the increase of the firm's credibility in the market. 5. Consider and form a view on how e-Commerce will affect the business into the future The establishment of e-commerce schemes in modern firms is a risky initiative; the cost involved can be significant while the actual benefits may be differentiated from those expected. Malik (2003) noticed that 'successful business transformation has proven to be a complex issue' (Malik, 2003, 153). Taking into account the rate of development of e-commerce initiatives in organisations worldwide, we could expect that e-commerce would continue to affect the firm's profitability in the future - maybe at higher level that currently does. In order for e-commerce to continue to offer benefits to Debenhams it is necessary that the systems involved in the specific schemes are continuously reviewed and updated; existing systems would be continue to be effective but after a while they should be update - in accordance with the progress in technology and the customer trends worldwide. In any case, the value of e-commerce scheme on Debenhams cannot be denied. Debenhams is a firm well established in the British retail industry; the online presence is therefore considered as absolutely necessary - even if the investment required for the monitoring and the update of IT systems used in this scheme can be significant. In accordance with Chadwick (2003, 443) 'contemporary digital information communication technologies (ICTs) facilitate new forms of e-government-enabled public sector policy making that enshrine some of the important norms and practices of e-democracy'. Information technology is not only a tool for the development of specific activities; is also a tool of communication promoting the social ethics and culture within a particular society. Debenhams should continue supporting its e-commerce features not only for the improvement of its performance but also for keeping high the level of communication with its clients - a factor that can influence even in the long term the stability of the firm in the particular market. In any case, e-commerce is expected to have greater value for the firm's activities - as in all firms in Britain - after the introduction of the 'interim Digital Britain report' by the communications minister of Britain in January 2009. Recommendations The use of e-commerce and e-business in Debenhams has been used in order to support the improvement of the firm's performance under the pressure of the competition in the British retail market. Despite the fact that both these strategic schemes have been proved to offer a significant support to the firm's operations, there are still a few issues that need to be appropriately addressed by the firm's managers: a) the firm should not rely too much on these schemes for the development of its performance - alternative plans, like the investment on the international market and the arrangement of seminars for the training of the firm's employees should be developed; b) the arrangement of strategic alliances would also be valuable leading to the increase of the capital available for the development of the firm's strategic plans; c) the review of the firm's supply management policies could lead to the limitation of the firm's outputs; d) the participation of the firm's shareholders in the development of strategic decisions would be supported and promoted and e) the increase of investment on innovative IT systems would be decided - apart from the development of the firm's server in 2006 - in long term the survival of the firm will be strongly depended on its ability to effectively respond to the customers' preferences and the market trends - which seem to be highly influenced by the online presence of firms in all industrial sectors. 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Journal of the Academy of Marketing Science, Vol. 31, No. 4, 425-447 Online sources Debenhams, 2009, available from http://www.debenhams.com/ and http://www.debenhamsplc.com/deb/ir/ Business Wire (2002) Debenhams Selects DataCore's SANsymphony. http://www.allbusiness.com/technology/software-services-applications-network-software/5977693-1.html Business Wire (2001) DataMirror Helps Debenhams Gear Up For Busiest Wedding Season Yet, http://findarticles.com/p/articles/mi_m0EIN/is_2001_July_16/ai_76545650 Computing (2009) Government lays out Digital Britain proposals, http://www.computing.co.uk/computing/news/2235383/digital-britain-report Netezza (2006) DEBENHAMS ACCELERATES BUSINESS INTELLIGENCE PROCESSES WITH NETEZZA, available from http://www.netezza.com/releases/2006/release013106.htm Appendix Figure 1 - Chart of Debenham's share price (2008 onwards), source http://www.debenhamsplc.com/deb/ir/shareinfo/serverchart/ Read More