From E Business Support to Strategy - Essay Example

From e-Business Support to Strategy Part I E-business plays a fundamental role in today’s businesses. It provides a business with an opportunity to make an entry into the international market and be a part of the international business group. The most significant aspect of e-business is that it assists businesses to graduate to the global market at a minimum cost with the highest efficiency (Li, 2006). E-business deviates from the conventional field of business by accelerating the business activities and providing an entirely new height and definition to global businesses be it whether partnerships, joint ventures or big conglomerates. The internet, intranet, mobile networks and other types of digital expertise have made a functional value chain with customers, employees, suppliers, shareholders and traders synchronized in the new age of web marketing. The apparatus and pillars of e-business strategies consist of online advertising, receipt of payments over the Internet, on-line dealings and auction transactions over the Internet. E-business strategies vary for small and medium scale businesses. E-business strategies also create profits from current channel integrity maintenance, paid marketing deals, franchisees and subscriptions. (E-business Strategy, n.d.) E-business strategies use information and communications technology to enhance businesses. E-business is more concretely defined as the transformation that takes place in business processes due to the application of technologies and new ideas to deliver additional and improved customer value. (Andam, 2003, p.7). The introduction of internet and other network and web technologies has made companies rely more and more on e-business strategies. An up-to-date e-business strategy generally consists of an effective and efficient management of the supply chain to guarantee enhanced coordination between the wholesalers and the dealers of different products. This means to synchronize the entire supply chain starting from the source up till the ultimate delivery of the products. The value chain framework also involves the value shop and value network. Service providers like hospitals or consulting firms create value through the value shop process while, the brokering or intermediary actions (like banking and telephone companies) are carried out through value network management (Torbay, Osterwalder and Pigneur, 2001, p. 6). E-business strategies are also used to enhance customer services and build a better customer relationship management to ensure an utmost level of customer satisfaction. It also includes timely and punctual delivery of products within the customers’ reach. E-business strategies help are also helpfuto enhance inventory and service management integration by using and formulating explicit plans for inventory stock and buying machinery and equipment. It would help to avoid needless purchases that often lead to greater expenditures of the company further involving various tax implications. The tactical operations that target towards short-term objectives are better managed and executed through e-business strategies. (E-business Strategy, n.d.) The e-business models help a company to construct its organization in a manner so that it becomes more efficient, compliant and responsive to consumer demand. It also helps to forecast potential future scenarios that would facilitate them to remain competitive in the age of internet. In general, e-business modeling has the same objectives as an enterprise representation. Modeling helps firms build up business ideas and strategies, redesign and arrange business operations, share information about the business and to make certain the that the business decisions are accepted by means of committing shareholders to the decisions taken. A business model is just a structural design of a firm and its network of associates for generating, marketing and providing value and relationship assets to one or more sections of customers in order to create profitable and sustainable income flows. (Torbay, Osterwalder and Pigneur, 2001, p. 2-3) Many companies follow the First-to Market Strategy where they try to communicate and disclose their visions ahead of the market. They believe that by doing so customers would develop loyalty towards their products and win over their competitors. For instance, Priceline.com Inc. in Norwalk used this strategy with its “name-your-own-price” system for purchasing airline tickets along with related products. (Trombly, 2000). Another strategy that companies use is Buyer-to-Customer (B2C) or Business-to-Consumer (B2C) strategy. A firm usually creates value for a particular customer segment. The characterization of the market scope involves the idea of where the company competes and does not compete; which clients, which geographical regions and what product sections. A company can market either to individuals and/or businesses generally known as business-to-business (B2B) and business-to-consumer (B2C) strategy. The expansion of a firms reach because of the extensive use of Information and Communication Technology (ICT) has lead to the formation of differentiated strategies targeted at different geographical areas. (Torbay, Osterwalder and Pigneur, 2001, p. 2-3). B2B is the transaction of goods and services or information between the businesses rather than between businessmen and customers. The Gartner Group computed the revenue of B2B throughout the world to reach $7.29 trillion dollars by 2004 (Jones, July 2001). B2B Web sites can be sorted into company websites, product supply and procurement exchanges, specialized or vertical industry portals, brokering sites, information sites etc. Many model of B2B are still in the process of innovation. Another type of B2B firm is the software to develop the B2B websites which includes database, equipments softwares (Jones, July 2001). E-business has been growing extensively to a high level of technology through a continuous expansion in innovation. This high level corresponds to the use of internet. As e-business continues to be stimulated by both organizations and customers who have residential or official access to the internet, its spread as well as its potential for success rises (Qihai, Z, Yujun,L, Zhuma, P and Xun, L, 2009, P.527-529). Online auction is the best illustration of network dominance. eBay is one company that has domination in this field. This auction website begins with a specific market and gradually diverges appealing to a broad category of customers. This site is particularly helpful to the infrequent users who desire to purchase or sell something. Only big online companies with huge traffic volumes like Amazon, Google, and Yahoo, can think of giving a neck-to-neck competition to eBay. Yet, some small online auctions have started in niche markets, where they offer specialized knowledge and services (E-Business, n.d.). EBay sets its value with a dynamic procedure counting on the number and the interest of the possible purchasers. Its service was first intended to make people meet and trade goods by means of the Internet (B2C). Then, small business took the chance offered by eBay to provide their products on the Internet. At last, eBay chose to develop its service to meet the requirements of the small business market aiming business ventures with fewer than hundred workers (B2B). In the eBay business model, the user can be in addition the supplier and the client. As a secondary source of proceeds, eBay provides the option to acquire some space for placing ads or to host the links to other websites. It offers worth through an incorporated full-service shipping service and know-how for person-to-person compensations through the Internet. Furthermore, the degree of customization of eBay is pretty high with aspects for instance, my eBay. An example of a business model novelty based on network is a Chinese firm 6688. It incorporates network subdivision which means breaking some specific node in the value network into new nodes and realigning its functions and activities. A typical example of this kind of innovation is e-business outsourcing. 6688 is a firm that offers service to outsource the products for small and medium production firms. The firms have to only submit the details of their products along with a fixed price. 6688 will recommend solution as well as webpage design, updated information, order execution and client service. All these services come free of charge and 6688’s profit comes from the spread between the prices at which the products are sold to the end customers and the fixed prices from these firms. This business model is called B2B2C and 6688 plays as the intermediate B (Wu and Zhang, 2009, p. 4) With the advent of e-business and related technologies, another concept that has seeped in is e-Governance. Electronic Governance can be described as providing citizens the option of when and where they can retrieve information and services of the government. E-Governance involves the processes that are used to give services to the public. This necessitates the use of electronics and Information and communication technology in a number of government functions. E-governance generally consists of three types of technology- information technology to facilitate the government functions, websites that would facilitate the direct access of information by the citizens, improving Government practices so that openness, liability, accuracy, momentum of operations, effectiveness and competence can be achieved. It includes government websites, emails, digital access to state information and facilities for electronic payment. The main objective behind the inception of e-governance is to build up a strong relationship between the state and its citizens by means of constant flow of information among them. That is to create a strong foundation and transparency between the state and public so as to increase the operational efficiency of the government. E-Governance gives a novel way of helping the government to improve its processes, connect citizens, and develop interactions with and within a civil society. Government-Citizen conjoined model aims to eradicate all kinds of constrictions between the different sub-functions of the government and focus on the needs of thee public through the application of information technology and information highway. Service-Delivery Model involves the public in the decision-making process of the country so as to generate an efficient and successful delivery of government services. This is again a citizen centric model that aims to build a more intimate relationship between the state and the public. The company Broadllyne has undertaken and successfully implemented a number of e-governance project in the US, UAE and India (for example, the Indian Railways) and suggested various improvement remedies for the governments (E-Governance Solutions and its importance, n.d., p.1-4) Part II The Internet has radically altered the conventional forms of businesses by altering business’ physical limitations, and introducing very proficient and effectual methods of doing new business and e-learning prospect for expanding organizational memory. Nowadays, the United States escorts the world in countrywide Internet accessibility by its inhabitants in addition to exercising up to date expertise within novel business models. In the meantime, other nations are busy continuing to expand and test with their individual business models and Internet infrastructures. Each nation has been following a pathway that is quite dissimilar from the US, while holding prompt to their diverse cultural and technological backdrops. Scandinavian nations, for example, demonstrate a very high penetration of wireless cellular phones among their residents. The most accepted technique of accessing the Internet in Scandinavian nations is by means of cellular phone, not by means of personal computer (PC), as in the United States. NTTs Docomo is tremendously admired in Japan, which leads the globe in wireless Internet technology. In these two nations, e-business models have developed to reveal their particular cultures for instance, “Nomadic Culture” and “Small is Beautiful,” and therefore, these business models have been very flourishing. Therefore, it appears to be very vital to learn a nations cultural and social backdrop to clearly comprehend and envisage the correct trajectory of e-business models. (Lee, Le, Seo and Park, n.d.) Communities of practice (CoP) refer to the clusters of people with similar interests or concern for something and discover newer ways to do that in a better way through regular interactions. The members of a community of practice are veterans. They develop a shared collection of resources like experiences, narratives, tools, and ways of attending to persistent problems. This calls for time and sustained interaction. CoP is used profoundly in businesses, education, government, development projects, professional groups and social life. These practices have different names in different organizations like, learning communities (Hewlett-Packard), knowledge networks (IBM), thematic groups (World Bank), or peer groups (British Petroleum) (Wenger, 2006). This practice is widely employed by business firms because they are aware of the importance of knowledge as a vital asset. Obviously new technologies like the internet has helped to connect people from all the corners of the world and facilitated the expansion and creation of communities of practice. (Wenger, 1999) IBM Global Services is one such organization which has implemented this practice for a long time. IBM had built up a business model that that incorporated assistance for the expansion and development of communities of practice targeting at the competencies of the organization. It established the knowledge management programme in 1995 to create and develop a CoP (knowledge networks) for benefiting both the company and the individual (Gongla.and Rizzuto, 2001) IBM uses a lot of Information technology in its CoP. Documentation has been an early goal for IBM and hence, it has formed core group called IBM Corporation’s Intellectual Capital group. In IBM, every single community has an executive sponsor who gives access to the peak management team and hence facilitates in the movement of thoughts from the employees to management board and make them a part of the decision-making process. (Wenger, McDermott, and Snyder, 2002, p. 89, 215).The executive consultant of IBM, Gerry Falkowski discovered that it was simple to find existing communities of practice employing organizational network analysis (ONA). This technique allows management to grow on the basis of the knowledge flows and exchanges that existed rather than ignoring them. This was addressed in APQC report as Building and Sustaining Communities of Practice which shows how is communities of practice determines using social network analysis (Discovering Communities of Practice @ IBM, 2008). Communities of practice are also used in online education. Internet and web technologies are extensively used in online community of practice. The net facilitates to create, filter, sharing and use of knowledge efficiently among individuals. An online Communities of practice involves more than just transferring a CoP to an online environment. Cases of efficient and effective online CoP include The Learning Inquiry Forum (hosted by the Center for Research on Learning and Technology at Indiana University and sponsored by the National Science Foundation), Tapped In (created by SRI International’s Center for Technology in Learning, and funded mainly by the National Science Foundation, in the US), Education with New Technology (ENT) and Talking Heads & Virtual Heads. ENT is sponsored by Harvard University and is designed to assist educators develop strong learning experiences for students by means of effective integration of latest technologies. Talking Heads was introduced in 2000 as an unofficial and voluntary online community for head tutors in United Kingdom to link up with each other to communicate best practice and work out new ways to tackle problems in their schools. Virtual Heads is also an online community for assistant head teachers, with fifteen thousand registered members in 2004. These practices have a distinct purpose and the characteristics that distinguish them are diverse membership, strong leadership, appropriate use of technology, emphasis on participation and community building (Lai, Pratt, Anderson and Stigter, 2006). Reference 1. E-business Strategy, n.d., “Business”, Available from: http://www.economywatch.com/business/e-business-strategy.html (Accessed on Jan 4, 2009) 2. Andam, Z. R. 2003, “e-Commerce and e-Business” Available from: http://www.apdip.net/publications/iespprimers/eprimer-ecom.pdf (Accessed on Jan 4, 2009) 3. 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Wu, X and Zhang, W, 2009, “ Business Model Innovations in China: From a Value Network Perspective”, Available from: http://www.indiana.edu/~rccpb/uschinacooperation/papers/P8%20Wu%20Xiaobo.pdf (Accessed on Jan 4, 2009) 10. Li, F, 2006, What is E-Business , Blackwell Publishing 11. Lee, Y, Lee, Z, Seo, S and Park, M, n.d., “A Study of Cultural Effects on Building e-Business Strategy and Web Site Functional Development: A Case Study of Cyworld.com1 in South Korea” 12. Wenger, E, 1999, Communities of practice: learning, meaning, and identity, Cambridge University Press 13. Gongla, P.and Rizzuto, C.R, 2001, “Evolving communities of practice: IBM Global Services experience”, IBM Systems Journal. 14. Wenger, E, McDermott, R.A. and Snyder, W, 2002, Cultivating communities of practice: a guide to managing knowledge, Harvard Business Press 15. Discovering Communities of Practice @ IBM, 2008, Available from: http://www.orgnet.com/emergent.html (Accessed on Jan 4, 2009) 16. Lai, W. K, Pratt, K, Anderson, M and Stigter, J, 2006, “Literature Review and Synthesis: Online Communities of Practice”, Available from: http://www.educationcounts.govt.nz/__data/assets/pdf_file/0019/7480/lrs-online-com.pdf (Accessed on Jan 4, 2009) Read More