The Future of Work Is in Digitization of Products and Processes - Case Study Example

Argos Argos Company The company was founded back in the year 1972. Argos Company is today one of the major retailing companies in United Kingdom (U.K) as well as in Ireland. The company has more than seven hundred and thirty stores within UK and Ireland. It is approximated that the company receives approximately three hundred and forty million websites visits every single year. The company has embarked on sale of electronics, jewelers and even watches. Its main brands include electronic brands such as Bush, Chad Valley and Alba. Other brands include Elizabeth Duke. Argos Company operates in a Retail industry and sells and distributes consumer products throughout UK and Ireland. The company has approximately fifty thousand employees. "The future of work is in digitization of products and processes". This is statement is derived from the work of Choi, Stahl & Whinstones (1997). They are amongst the scholars of the world who have in the past developed different business models to adequately emphasize on the need for integration of online business in operations of different companies of the world. Choi, Stahl & Whinstones (1997) presented an E-commerce model that has widely been used in the world of business. In the model, e-commerce is significantly distinguished from the traditional commerce on the grounds that e-commerce has a three-dimensional space with the traditional commerce just as a part of one of the phases (Coletti and Aichner, 2011, p. 30). This model has been quite useful in defining the market space of the different organizations of the world as well as determining the relationship of the different organizations of the world to the technology. The model doe not however insist on the need for the different companies of the world to develop e-commerce strategies. The model just emphasizes on the importance of e-commerce to different businesses and evaluates its future potential in global business. This is a fact that has been proved to be true in the recent past following the continued influence of globalization on various businesses of the world. The invention of computers resulted into growth and development of technology. Technology is basically a vehicle in which different companies integrate their infrastructural capabilities such as accounting and finance, HRM, marketing as well as logistics in achieving the company’s goals and objectives (Johnson and Bharadwaj, 2005, p. 3-18). These capabilities are a part of the human capital. Through the internet, most businesses of the world have witnessed major changes in the world of commerce (Khan and Mahatapra, 2009, p. 30-46). Companies have moved from the traditional commerce to e-commerce and even mobile commerce. Technology has made it possible for the different businesses of the world to create a virtual environment where buying and selling of goods and services is basically conducted through use of the different internet technologies. Today, it is possible for an individual entity to create its own virtual environment where it can adequately market its products to its potential customers. In fact, most businesses of the world today have developed their own websites as a step towards digitization of their products and processes. In the website, the company is able to market its products to the entire world. Customers from all walks of life are able to freely and easily go through the different company products, issue a bid and even buy them over the internet. This has made it possible for the different customers of the world to be able to shop for the goods and services from the comfort of their homes. There are a number of technologies that have aided most of the organizations of the world in digitizing their products as well as the different processes. Such technologies include: electronic data interchange (EDI), worldwide web (WWW), electronic fund transfer as well as the global positioning technology (Rehman, 2012, p. 289-303). The electronic data interchange technology has aided in the sharing of information between the different companies and customers. Worldwide web (WWW) has made it possible for the interconnection of the different computers of the world. Electronic fund transfer technology has ensured safe transfer of money from one individual person to another across the world. In the traditional commerce, money used to be physically availed during the process of purchase. This is not the case today since today one only needs to have a credit card. The global positioning technology on the other hand has aided the safe delivery of products to the respective customers. By the use of the GPS technology, it is possible for the customer to track his or her shipment and learn its exact location. This has further boosted the security of the online business a move that has seen a rapid growth in digitization of products and processes in different companies of the world. Argos Company has in the recent past been on the verge of digitizing its products and processes in all of its stores in the different locations of the world a goal that has not yet been achieved since digitization of company’s products and processes is a process that takes time since it is a huge step towards e-commerce and e-business. For a company to fully digitize its products and processes, it has to first analyze costs and benefits associated with the digitization process. This means that the company has to adequately develop and implement new strategies in relation to different operations such as production and marketing. Formulation and implementation of new strategies in a firm is normally a lengthy process since the manager in charge of digitization has to adequately conduct an analysis on the specific sectors of the company that need to be digitized so that the company can perfect integrate the new business strategies and models. The most adequate tools of analysis that are used in the analysis include SWOT Analysis, PESTEL analysis and Porter’s five forces. The SWOT analysis will help the Digital Manager become aware of the company’s internal strengths and weaknesses. This way, the Digital manager will develop strategies that embrace the technology that can actually boost the company’s strengths and at the same time reduce the weaknesses. SWOT analysis may also help the Digital Manager establish the threats and opportunities that would face the company in outside world when it digitizes its products and processes. Through PESTEL analysis tools, the Digital Manager is able to adequately analyze the key political, economical, social, technological, environmental as well as legal factors that adequately affect the company in the process of digitizing its products and processes. From this analysis, it is possible to take advantage of the opportunities and avoid threats brought about by these underlying factors. Porter’s five forces have constantly been used by the different managers of the world in analyzing competitors in the market. The digital manager can still use the same in evaluating the company’s competitors in the market so as to only make the digitizing company a threat to its competitors and not making it vulnerable to its competitors. Nevertheless, there are quite a number of advantages attributable to digitization of the company’s products and processes as well as a number of disadvantages associated with the digitization process. It is important to evaluate them. Argument For Full digitization of Argos’s products as well as its processes will not only open up the company to the global market but also ease the difficulties of marketing its products as well as grow the company into an international company. The process further places the company as a viable player in the global economy of the world by making the company look dynamic as well as evolving. Through digitization of the products, different customers in different parts of the world will be in a position to shop from Argos stores online. Digitization process readily involve a company developing various websites which are capable of providing adequate information to different customers of the world as well conducting transactions with the different customers (Ho et.al, 2011, p.7). The physical stores of the company are actually transformed into online stores. Online stores increase sale efficiency of a company (Johnson and Bharadwaj, 2005, p. 3-18). According to Amit and Zott (2001, p. 493-520), the websites that are designed by the company to directly communicate and conduct direct transactions with the various customers have saved transaction costs amongst different organizations of the world. This is as a result of the fact that through sale of products through the websites, middlemen are eliminated in the selling process reducing not only the cost of transacting with the customers but also reducing the transaction time. Argos Company will for example no longer needs sales persons to market and sell its products. A website also gives the company more room to attend to a bigger number of customers at once. Moreover, digitization of a firm’s products and processes reduces all the risks attributable to the human capital such as labor turn over as well as the fact that the process eventually reduces and eliminates distance, locations and constraints felt in the relationships established between the company and the respective customers (Watson et. al, 2000, p. 30). A salesperson can for example work for the company today and wake up the next day and quit the job. Through digitization, the company is free from such occurrences. Some salespersons can also interfere with payments made by the various customers. Digitization of the purchase process further ensures that the customer is able to select an item and make the necessary payment without the intervention of the salesperson. Delivery status of the item is also well outlined on the website of the company hence the different customer have all the needed information to make purchases. Also from the website, the customer benefits from the revealed purchase history of the different products by the different customers in the company. The task of management of the different processes involved in a company also becomes quite simplified. For example, the marketing manager does not need to audit the daily sales ledgers of the company. He or she can easily make follow ups on the company’s sales just from the website. Accuracy is yet another advantage of digitizing company’s products and processes. Computers are quite accurate by far when it comes to manipulation of figures. Different companies of the world have integrated the use of computers in accounting and finance functions. This has adequately enhanced the level of accuracy as well as accountability in production and purchase processes of the different companies. This would also eventually improve Argos finance accountability. Arguments against Even though in the recent past internet and other internet technologies have been used by different companies of the world in meeting the need of the different customers of the world as well as attaining a competitive edge in the market, online stores that arise from digitization of the product and the different processes of the company still continue to face a number of challenges. According to Martin et.al (2003, p. 293), some of the most common challenges associated with digitization of the company’s product and processes include: security issues, maintenance costs, increased competitions and dependability of the company on the internet. Sectoral limitations and momentary intangibility on the products also pauses a challenge to the digitization process. Argos Company is deemed to experience similar challenges in the process of digitizing its products and processes. Security issues & Maintenance costs Digitization of company’s processes and products in other companies of the world has proved to make the company become vulnerable to hackers. Hackers are able manipulate the financial data of the different organizations after finding their way into the company’s website. Also, through hacking, customers also become vulnerable to identity theft as a result of the fact that the online transactions between the company and the respective customers requires personal details of the customer such as details of the credit card, email and physical addresses. For the company to ensure safety and integrity of its website, it has to constantly invest money and time so as to adequately come up with adequate security measures. Such security measures include various data encryption methods and digital signatures that can adequately protect the information of the customer as well as the website of the company. The company further invests in training its respective staffs on how to undertake the digitized processes. Increased competition and dependability on internet Digitization process makes the company quite dependable on the internet for purchase and sale of its different products. The increased dependability of the company on internet further makes the company vulnerable to security risks. Following the fact that all of the company’s information is present on the website of the company, competitors may use that particular information in developing substitute products and also upgrading their respective processes. This further increases competition within the industry and according to the different economists of the world, competition reduces the profit margins in the industry. Momentary intangibility Digitization of some of the processes such as purchasing, selling and procurement processes within a company may result into other problems following the fact that the human touch is missing in the entire transaction process. For example one may purchases a watch from an Argos online store without necessarily seeing the actual watch. There is a probability that the customer may not like the actual watch that is delivered to him or her. This may force the company to incur some extra cost in replacing the delivered item or total loss in cases where the customer totally rebukes the product. This company may further incur costs if the customer decides to settle such disputes through the court of law. Sector limitations Some processes in the company cannot be digitized. Some products cannot also follow the digitized processes of purchase or sale following their size or value. A good example is the large sized items such as trucks and some high value items such as gold watches. In other cases, sale of some products are restricted by various laws by different states and federal governments. Conclusion Argon Company’s future plainly lies on the digitization of its products as well as processes. Today, most of the world businesses operate online. This has been so because there are more advantages attributed to online business operations than the traditional business operations. The upcoming firms in the retail industry have however fully integrated use of internet as a major tool in running their business affairs. This has further disadvantaged Argon Company in its operations and has continued to pile pressure on the management to fully digitize the company stores in different regions of the world. Digitization of the company’s products and processes is quite an important step towards ensuring a safe future for the well being of the company and its loyal customers. In the near future, all companies will have fully digitized all of their operations and the different customers will no longer see or feel the need of performing the traditional transactions. Argon Company has to therefore change with these changing times before it is too late. References Amit, Raphael and Christoph, Zott. 2001. “Value Creation in E-Business.” Strategic Management Journa,l 22:493-520. Choi, S.,Stahl D., O. & Whinstone, A., B. 1997. The Economics of Electronic Commerce. Indianapolis: Macmillam. Coletti, Paolo, Aichner, Thomas. 2011. Mass Customization: An Exploration of European Characteristics. ISBN: 978-3-642-18390-4. DOI: 10.1007/978-3-642-18390-4 Ho, L., H., Lu, M., H., Lee, C., P. and Peng, T., F. 2011. “Exploration of Search Engine Optimization Technology Applied in, Internet Marketing”. Advances in Information Sciences and Service Sciences, 3(7). Johnson, Devon, S. and Bharadwaj, Sundar. 2005. Digitization of Selling Activity and Sales Force Performance: An Empirical Investigation. Journal of the Academy of Marketing Science, 33(1), Pp. 3-18. Khan, M., S. and Mahapatra, S., S. 2009. “Service quality evaluation in internet banking: an empirical study in India”, Int. J. Indian Culture and Business Management, vol. 2, no. 1, pp.30-46. Martin, B., A., Van Durme, S., J., Raulasand, M. & Merisavo, M. 2003. “E-mail Marketing: Exploratory Insights from Finland”. Journal of Advertising Research, 43(3), pp. 293-300. Rehman, Sana. 2012. ‘Influence of E-commerce and its emerging innovations in banks’. International Journal of Marketing and Technology, 2(8), Pp. 289-303. Watson, Richard, Pierre Berthon, Leyland Pitt, and George Zinkhan. 2000. Electronic Commerce: A Strategic Perspective. Chicago: Dryden. Read More