Digital Business Management: Critical Evaluation of Lloyds Bank Website - Coursework Example

Digital Business Management: Critical Evaluation of Lloyds Bank Website Introduction Since the inception of ICT as well as ICT technologies, a lot of changes have been noted on the business scene. First of all, a lot of businesses (companies) have developed an online presence where they seek to showcase their products and/ or services to their consumers through the use of a digital system such as the website. Moreover, a lot of businesses that conducted traditional commerce have now implemented the use of e-commerce dynamic websites which have with themselves a lot of benefits. With that mentioned, here are some of the benefits that businesses such as Lloyds Bank can attain/ have already attained with the implementation of digital systems. Benefits of implementing digital systems: As noted by Phan (N.d), e-commerce digital systems are the way forward for each and every business unit. Despite change being a strategic step that a majority of businesses either decline to implement (Shaw, 2011) or take time to adopt, it is essential that business units should do critical research and analysis and then plan (Buckley, 2013) on how ICT within their business can help them to gear towards a sustainable future. As such, the following are some of the benefits that a business encounters once they implement digital systems. Increased user audience and market sales: Phan (N.d) conducted a case study for Intel and realized that their e-commerce system had massively helped the company to increase sales over a period of time. When compared to Lloyds Bank (2014), it is without doubt that their existence from the year 1765 to date has been attributed by the fact that through the years they have been constantly shifting the way they conduct their business operations with regard to market and technological trends. As such, through the years the company has managed to gather a larger market audience with the integration of ICT in their banking operations. This in turn translates to an increase in sales of their banking services to potential consumers. It is cheaper than print media: Digital systems are way cheaper as compared to the traditional print media channels. The Lloyds Bank has indeed taken advantage of this aspect since they get to advertise their banking services online to their consumers 24/7 everyday. Bricks and Mortar presence: This refers to the physical location of a business. The business can incorporate a dummy physical map that leads consumers to their company location. Lloyds Bank has a link by the name of “Detailed Branch Finder” which helps their consumers to perform a quick search of nearby branches and visit those branches in case they have important queries. Convenience for the consumer: The consumer doesn’t need to physically travel to the bank’s offices to get detailed banking information. Additional revenue channel: Lloyds Bank has indeed maintained their online presence since by no doubt they get extra revenue from it. Enable social communication (efficient customer service): This is one aspect that has promoted a lot of businesses to greater heights and Lloyds Bank has not been left out. Apparently Lloyds Bank has implemented a number social media presence such as: FaceBook, YouTube and Twitter from which they can interact actively and in real time with their consumers. This can be a great channel to communicate to their customers about their banking services as well as respond to consumer queries. Despite these benefits, digital information systems now bring stiff competition between companies. For a company to make it through, they have to offer value added benefits to their products or services. Lloyds Bank has taken this aspect into consideration and that is why they have offered value added services to their consumers such as their commission free currency to travel insurance (Lloyds Bank, 2014). How has Lloyds Bank implemented digital information systems? Lloyds Bank has implemented digital information systems in the following ways: ATM banking systems: The bank has ATM information systems whose core aim is to monitor consumer transactions between the different ATM’s, the core banking systems and with other banks. As such, consumers can gain access to their accounts at their different cash points. Mobile banking and Mobile app systems: Banking and Internet technology has enabled the rise of mobile banking and mobile banking apps that consumers can use to gain access to their different accounts with ease and at their own convenience. As such, Lloyds Bank has a mobile banking site which offers easy and quick banking on devices such as smart phones. The benefit of this option is that consumers do not need to make any downloads. Moreover, the bank also has a mobile banking app that also serves the same purpose; however, this has to be downloaded from the banks website. Mobile banking internet security systems: Banking systems need a lot of security from hackers or individuals who may want to steal the data or information for their own gain. As such, Lloyds Bank has implemented mobile banking security systems whose core aim is to help protect consumers from fraud while they do their transactions through their mobile devices or the internet. Internet banking systems: Internet banking has enabled their consumers to take advantage of the benefits that the Internet brings along. As such, consumers can be in a very comfortable position to check their accounts progress, balances, loans, transactions and also move money from one account to another. It is also worthy to note that their Internet banking systems have been linked (integrated) to their mobile banking systems such that consumers can gain access to Internet banking from their mobile gadgets and in a mobile friendly view. Social networking: Lloyds Bank has implemented a number of communication systems whose main aim is to improve and provide better customer service to their consumers. As noted by Lam et al. (2004), customer service is everything to a business, as such; Lloyds Bank has a “Contact Us” page; Emergency lines; a Twitter link; FaceBook link; YouTube link for their consumers to contact them at any time when in need. Credit Card/ Debit Card systems: Credit and Debit card systems have enabled the undertaking of transactions to be very easy. Since the bank provides this service, their consumers can be able to have access to their account wherever they are and at any time for a whole lot of services such as payments online, buying goods etc. Interbank networking: Interbank networking allows for different individuals to send or receive money from other banking institutions. As such, Lloyds Bank has integrated this module with their bank’s accounting systems to allow for swift money transfer from different banks. Information delivery systems: Lloyds Bank has implemented a number of customized information delivery systems. The first is the “Text Alerts” system which allows the consumer to get text alerts based on their credit card usage, transactions and accounts balance. Moreover, the bank also delivers customized information that has been tailored to their consumer’s businesses such as: Agriculture; education; franchising; health care; manufacturing. Self inquiry facility: As noted by Ghaziri (1998), the self service allows for consumers to log into the banks website and be able to check their accounts finances. Lloyds Bank has a website functionality that enables their consumers to login to their website so as to check their accounts balances as well as transactions. In addition, consumers can also request for a new Pin, replace their smart cards, order cheques and certificates of interest. Implementation of management information systems: These systems help the bank to manage their internal operations effectively and efficiently. In addition, MIS assist the bank to generate reports and also produce periodic returns. Evaluation of Lloyds Bank business model and their online value proposition As noted by Osterwalder et al. (2005), “A business model is a conceptual tool containing a set of objects, concepts and their relationships with the objective to express the business logic of a specific firm. Therefore we must consider which concepts and relationships allow a simplified description and representation of what value is provided to customers, how this is done and with which financial consequences”. A business model can also mean the procedures that banks undertake to operate effectively and efficiently, their automation procedures, their rates and pricing, their services and their underlying digital information systems. There are a number of business models that a company can adopt. These include: pipes, platforms, networked business models, social business models etc. However, the major ones are: Pipes: These are the traditional business models that have been existent since the inception of industrialization. This is because the business operates by providing a product or service and selling it to consumers. As such, the value of the product or service goes in both ways – the company benefits from the sales and the consumer benefits from the usage. Based on that description, pipes are more of a push and pull model. Platforms: Platforms do not optimally follow the pipes linear methodology (push and pull model). Instead, they focus on the value that the consumer gets as compared to the sales of the company. The rise of Internet technologies boosted this model since consumers can get to use the Internet to get more value from the products or services they consume. For example, a company may offer their consumers access to purchase their products or services online rather than going to their retail outlet. In that sense the consumer gets more value since they are comfortable while carrying out their transactions and again they are saving their time and efforts. Components of a business model As noted by Shafer et al. (2005), a sufficient model should have the following components: Source: Shafer et al. (2005) Lloyds Bank business model and their online value proposition Lloyds Bank uses a platform business model. This is due to the fact that a majority of their services are online (Internet based) and they not only offer the traditional banking services (push and pull) to their consumers but they also offer value addition to their services in the forms of: internet banking, mobile banking, text alerts etc. where the consumer can have comfort while they carry out their banking needs. Some of the approaches that Lloyds Bank has taken in order to ensure that they have adequately implemented the components of the business model include: a) Strategic choices: The bank has taken the initiative to select their target market and scope. This mostly comprises of business people who have needs that range from commercial banking, interbank transfers, international banking, personal banking, private banking etc. Moreover, they have the capability to fund new business entrepreneurs as long as one has a valid business plan that is also justifiable. In addition, they have stiffed up competition by offering differentiation of services such as a “Save tax Free” offer to their consumers. b) Value network: This involves ensuring that their consumers have the information that they need to know about their accounts; offering sufficient customer service and building sustainable relationships that lead to customer loyalty. c) Creating value: The bank creates value through their available resources and assets. d) Capturing value: This involves making sure that profits have been generated so as to ensure sustainability of the bank. Online value proposition (OVP) is a strategic choice in the business model. Many consumers like to know what they can benefit from as they engage in an online business relationship with a banking institution online. Lloyd Banks have implemented OVP in the following ways: Better services: They offer multicurrency banking, premier banking with dedicate relationship managers, save tax free services, international banking and international investment advice. Lower rates: Their banking and foreign exchange rates are very competitive. Convenient Internet banking, mobile banking and text alerts: Consumers have the option to transact online, through their mobile phones and they also get text alerts about their transactions. Therefore, they make it very easy for the customer to perform their banking needs. Demos on how to use their services: For users who are new to Internet banking technologies, they offer short, precise and clear to understand demos on how to use their services. For example, there exist demos on how to carry out Internet banking and mobile banking. Secure online banking tips: The offer their customers secure banking tips. Money back guarantee: In the event that a customer is subject to fraud while using their Internet banking services, they offer a money back guarantee as long as the customer took the necessary online safety tips. Based on that, the above OVP’s are the strengths that Lloyds Bank has when compared to their competitors. Identify the target audience/target market and discuss how the website tries to target this audience/these audiences The target market is startups and existing business people. The website targets these audiences by: offering business loans for startups; mortgages for business people who want to set up business spaces and purchase houses for their families; offering international banking – for their clients who do trade and cash transfers across international borders, offering commercial banking – for the their local clients who do cash deposits, withdrawals, debt financing, cash management and interbank transfers; private banking – for business people who need personalized banking services and financial management advice; personal banking – for business people who need advice on how to save more by using services such as the “Save Tax Free” and also how to invest better. Evaluate the customer relationship management of the company’s website Lloyds Bank website has an online help function that has been incorporated into their website. Consumers can ask questions and search through the FAQ for information related to their query. Secondly, these is a self service tool that consumers can use to either order cheque books, Pin numbers etc. the self help tool also responds to queries related to the banking services offered. Thirdly, the website has a list of emergency numbers that consumers can use in the event that they need urgent help in areas such as lost smart cards, aspects about banking, travel queries, rates and charges etc. Lastly, they have a number of social media communication platforms in which they use to communicate to their consumers about their services and help options. With that described, Lloyds Bank has effectively taken into consideration the aspect of customer relationship management. Suggestions/recommendations for further improvement of the company's digital business strategy Lloyds Bank operates on the platform business model. This model has two challenges and possible solutions (recommendations) that the bank can implement. These include: “No producer equals” “No consumer equals”: This is a challenge where one side of the business is existent because the other side of the business is. Therefore, if one side of the business is not available, then the other side of the business ceases to exist. One mentioned solution to this would be to ensure that each of the sides of the business is bait to the other. That is, consumer is the bait or producer is the bait or both become bait to each other. No complementary products: This challenge describes that platform models are not standalone. Therefore, one side of the business cannot be an independent unit since when a producer creates a product or a service to the market, there must be consumers to use the product or utilize the service. If the producer notes that there are no consumers, then they shall not create products or services. A solution to this would be to continue offering consumers banking services despite days when there is no business. Lastly, the bank should know that platforms involve building networks with consumers before initiating business. Secondly, users need to use the service in order for it to have value. Word Count: 2,613 without Bibliography Page Bibliography Business Dictionary. (2014). Bricks and Mortar. [Online] Available from: http://www.businessdictionary.com/definition/bricks-and-mortar.html [Accessed: 12 March 2014]. Buckley, P. (2013). The Key To Managing Change. [Online] Available from: http://www.businessweek.com/articles/2013-05-01/the-key-to-managing-change [Accessed: 12 March 2014]. Choudary, P. S. (August 2012). Platform Seeding Strategies. [Online] Available from: http://platformed.info/seeding-two-sided-businesses-strategy-chicken-and-egg-problem/ [Accessed: 12 March 2014]. Ghaziri, H. (1998). Information Technology In The Banking Sector: Opportunities, Threats And Strategies. 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