Significance of E-Enabling Technologies in Business and E-Business Strategies - Essay Example

E-business Strategies The progression of internet coupled with modern technological advancements has renewed the way of business operation. Technology has radically shifted the way in which organizations manage data and promote information flow within organizational system. This paper aimed to find ways to mitigate the risks and challenges of supply change management of the aerospace sector through application of e-enabled technologies. The study revealed that with implementation of e-enabled technologies, companies operating in this sector had been able to realize better and accurate planning as well as attain greater control within their own company and their supply chain. Apart from that, better management of production and manufacturing schedule were also realized. Most importantly, this technology allowed companies to manage risk properly, attain supply chain integration and achieve greater better visibility. However, the study also assured that to attain these benefits, companies need to create a new business model that supports this system. Table of Contents Table of Contents 3 Introduction 4 Discussion 4 Conclusion & Future Work 9 Reference List 11 Appendix 13 Introduction Technology plays an important role in the present turbulent business environment (Kalakota, 2000). Several companies rely upon software packages and computers to obtain and provide accurate information to their stakeholders and attempt to manage their business more efficiently (Kehoe and Boughton, 2001). It is increasingly becoming necessary for business houses to integrate information technology solution for operating successfully and competently in the market place. In one way, companies have integrated information technology with their system of operation on a large scale in the form of Enterprise Resource Planning (ERP) (Kaplan and Sawhney, 2000). The incorporation of ERP into a company’s system of operation allows the business to fulfil its data processing and business transaction needs. It is being widely acknowledged that companies are dealing with extreme challenges of e-business. It has turned into a challenge for the companies to make use of internet based tools as a means to support business process. The emergence and evolution of information and communication technology has literally encouraged development of powerful tools, which in turn are expected to improve performance of supply chain process dramatically through higher levels of integration and process efficiency (Brynjolfsson and Smith, 2000). Even though the initial enthusiasm for implementation of such technologies was high among the corporate, yet areas regarding relevance of these technologies and kinds of benefits to be obtained by companies are not entirely clear (Brynjolfsson and Urban, 2001). In fact, poor and disappointing evidences of actual implementation and its effectiveness on e-business practices can be found in large numbers (Cagliano and Spina, 2000). This paper aims to address significance of e-enabling technologies in business. The focus will be on the aerospace sector and ways in which integration of e-enabling technologies facilitates better information management and promotes supplier integration. Discussion The e-enabled technologies also known as internet-based technologies have been one of the key drivers of business. Nowadays, companies across the globe, irrespective of the size and the nature of their business are seeking ways to integrate such e-enabled technologies into their system of operations as an attempt to enhance the business efficiency and obviously streamline the business process (Croom, 2001). The application of e-enabled technologies can be mostly found in supply chain process of the company. One of the major rationales behind increased focus on integrating e-enabled technologies in company’s supply chain process is that supply chain is a domain, where companies are putting in strong efforts (Bruce, 1998). This statement is supported by Li, B. Ragu-Nathan, T. Ragu-Nathan and Subba Rao (2006), where they have stated that “in today’s organizations, competition is judged more in terms of supply-chain performance than individual company performance” (p.11). This is because supply chain is gradually becoming a global activity as suppliers or supply chain partners are located all around the world. As a result of this globalization, development of fragmented supply chain became a necessity and in order to achieve so, application of e-enabled technologies was important. Furthermore, e-enabled technologies also promoted co-ordination and effective management (Kirkpatrick, 2002). The aerospace case study elaborated in this paper highlighted development of an internet-enabled planning and control application in support of an “offset” program. The case also discusses the fact that in the aerospace sector, “offset” programs are not quite helpful. This is principally because of the fact that such offset programs might severely affect the final assembly process or integration stages of manufacturing; and in turn, aircraft deliveries get delayed. This also has potential to incur higher cost for manufacturers and it is not possible to pass down the cost to end consumers every time. So, a risk of increased cost and low profitability always remains associated with application of such “offset” programs. This led the sector to realize the need for a system that allows effective control and planning as well as to overcome challenges of the offset program. Production readiness, task/information visibility, operational pro-activeness and responsiveness are some of the key requirements for being an effective system. Due to implementation of “offset” programs, interaction levels between the company and its suppliers were adversely affected. For example, there were lack of data integration and data transparency. Moreover, as per the case study, current planning and controlling method of the organization is inefficient, intensive and is responsible for disconnection taking place at the supplier’s data integration level, knowledge level and information level. In addition to that, application of enterprise resource planning (ERP), as a planning and control method, has failed to address manufacturing information at an enterprise level. The ERP system has fallen short of integrating supply chain management of the firm at the global level. Even so, implementation of e-enabling technologies has transformed the scenario dramatically. This acted as a solution to problems being faced by the company. It allowed the company to realize better and accurate planning and attain greater control over their operations and supply chain. This includes parts in production, parts in inventory and work-in-progress (WIP). Besides that, overall management of production and manufacturing schedules enabled the company to assume a proactive rather than reactive approach. Most importantly, this technology has facilitated the company to manage risk properly and offer better visibility. E-enabled technologies has the ability to address systems, technologies and tools, that in turn allow the company to transform their operation supported through electronic transfer of information and raw data. Since ‘e-enabled’ technologies supports electronic data interchange and e-commerce operation, control over the operation became easy. For example, the company got the opportunity to notify staff members as well as suppliers of the operational schedules (Anderson and Weiss, 2003). Tracking the manufacturing became relatively easier for managers as they were no more required to scrutinize the progress manually; rather all advancements made were displayed digitally. In addition, the new technology allowed project scheduling and development of timeline. This helped in monitoring the progress. Digitization of the process provided company with the opportunity to track parts in production and in inventory (Szgenda, 1999). Furthermore, auto generation of raw material orders on the basis of inventory levels greatly increased efficiency of overall supply chain of the company by ensuring adequate availability of raw materials. Tracking the work-in-progress had also become easier for the company. In this manner, the company successfully satisfied demands of the market. Figure 1 – Evidence of Project Management Support (Source: PPT) The application and implementation of the new technique encouraged the company to adopt proactive model of production. The company, rather than depending upon market scenario and demands for products, had undertaken pre-manufacturing activities as an endeavour to reduce lead time (Luftman, 2001). The risk of material wastage reduced to a great extent with implementation of e-enabled technologies. For example, this technology has a feature that automatically detects inventory levels and on that basis, requests for new raw materials. Thus, unnecessary stocking was reduced. Also, more time was available to facilitate the recovery plans. Information flow among the suppliers and the company created a better integration and this coordination enhance efficiency (Frohlich and Dixon, 2001). Figure 2 – System data flow between the company and suppliers (Source: PPT) Recent studies have shown that integration of internet and business resulted in increased productivity and efficiency. A study carried out by McKinsey reflected that in the period of 1995-2009, internet had contributed 10% of the GDP (McKinsey, 2012). In the similar way, internet accounted for 20% of GDP growth for the period 2005 – 2009 ((McKinsey, 2012). Therefore, from these findings, it is evident that internet has been a major contributor towards success of businesses. In context of the aerospace sector, amalgamation of internet or e-enabled technologies with the business process has transformed supply chain from a linear sequential to a dynamic and circular trading hub. It has truly integrated supply chain of the company at a global level, which instils transparency to a greater extent. So, greater degree of alignment was realized between the information and operational infrastructures. Nevertheless, to achieve this, the company is required to create a new business model that supports implementation of e-enabled technologies. Figure 3 – Application Scheme (Source: PPT) Conclusion & Future Work The study tried to unearth significance of e-enabled technologies and the same has been evaluated from point of view of the aerospace sector. The study revealed that existing monitoring and controlling system is failing to manage challenges of the market as well as to mitigate the risks of internal operations, such as, the supply chain. Even so, implementation of new system has allowed the company to resolve most of the issues. For example; this allowed integration of supply chain at the global level. In addition, the process became more secured and streamlined. The use of firewalls has been a major contributor towards enhancing the level of security. Most importantly, this system even supports vital tools such as, MS project, MS Excel and MS Access. This enabled the company to securely store data and schedule activities as well as present it in a meaningful manner so that suppliers are able to retrieve the same easily. This has greatly improved data integration and information exchange. It should be also noted that implementation of e-enabled technologies has endowed companies with the opportunity of making suppliers aware of production schedule of the company and allow suppliers to gain knowledge about raw material availability. In future, the system can be further improved as well as implemented in areas other than supply chain and operations. For example; e-enabled technologies can play a crucial role in the marketing domain of a firm. In the similar manner of integrating suppliers with the company, this technology can unite customers with organisational system, thereby acting as a useful relationship building tool for the company. Reference List Anderson, D. and Weiss, J.W., 2003. CIOs and IT Professionals as Change Agents, Risk and Stakeholder Managers: A Field Study, Hawaii International Conference on System Sciences, Massachusetts. Bruce, K., 1998. Can you alight IT with business strategy? Strategy & Leadership, 26(5), p. 16. Brynjolfsson, E. and Smith, J., 2000. Frictionless commerce? A comparison of Internet and conventional retailers. Management Science, 46 (4), pp. 563-85. Brynjolfsson, E. and Urban, G.L., 2001. Strategies for e-business Success, San Francisco, CA: Jossey-Bass. Cagliano, R. and Spina, G., 2000. Advanced manufacturing technologies and strategically flexible production. Journal of Operations Management, 18 (2), pp. 169-90. Croom, S., 2001. Restructuring supply chains through information channel innovation. International Journal of Operations & Production Management, 21 (4), pp. 504-15. Frohlich, M.T. and Dixon, J.R., 2001. A taxonomy of manufacturing strategies revisited. Journal of Operations Management, 19, pp. 541-58. Kalakota, R., 2000. Next-generation B2B solutions. Supply Chain Management Review, 4(4) pp.75-79. Kaplan, S. and Sawhney, M., 2000. E-hubs: the new B2B marketplaces. Harvard Business Review, (May-June), pp. 97-103 Kehoe, D.F. and Boughton, N.J., 2001. New paradigms in planning and control across manufacturing supply chains: the utilisation of Internet technologies. International Journal of Operations & Production Management, 21 (5/6), pp. 582-93. Kirkpatrick, T. A., 2002. Research: The CIO’s Role, CIO Insight, April (15), pp. 15-21. Li, S., Ragu-Nathan, B., Ragu-Nathan, T. S. and Subba Rao, S., 2006. The impact of supply chain management practices on competitive advantage and organizational performance. Omega 34 (2006), pp. 107 – 124. Luftman, J., 2001. Business-IT Alignment Maturity. Longon: Idea Group Publishing. McKinsey, 2012. Internet Matters: Essays in Digital Transformation. [pdf] Available at: [Accessed 18 April 2014]. Szgenda, R., 1999. Information’s Competitive Edge. Information Week, 720, pp. 4ER-10ER. Appendix Figure 4 – Internet Supply eco-system (Source: McKinsey, 2012) Figure 5 – Contribution of e-enabled technologies (Source: McKinsey, 2012) Figure 6 – E-enabled technologies in SMEs (Source: McKinsey, 2012) Read More