Does the Internet Have a Positive Effect on Businesses and Corporations - Essay Example

Student’s Name] [Instructor’s Name] [Class] Does the Internet have a Positive Effect on Businesses and Corporations? The simplest answer to the question would be yes. The interest has facilitated communications, created new markets, developed new avenues and means of doing business while allowing companies to track their sales as well as shipments in ways unimagined. While an entire segment of the industry is directly connected with providing access to and information for the internet, businesses in general have learnt to use the internet for their advantage (Rayport and Jaworski, 2000). In fact, volumes could be written about the impact of email alone which has caused fax machines and even mailed letters to largely go the way of the dinosaurs but more importantly, it is overall impact of the increase in the speed of communications which has had the most positive effect on businesses and corporations. A deeper understanding of the idea can be had with explanations and real world examples of how companies have used the internet towards their greater benefit. The first process by which businesses have gained positive effects through the use of the internet is offshoring. Much as the industrial revolution changed how people lived and worked, offshoring can also be considered a revolution since it has allowed companies to offload their backend processes to others while letting them have more time to concentrate on their core competencies. Alan Blinder, a professor of economics at Princeton University wrote in 2004, the offshoring has a positive impact on businesses and corporations despite the claims made by some that Americans lose their jobs due to offshoring. Blinder (2004) reports that although more than a million jobs in the American services industry have taken by outsourcing services providers, the benefits gained from it allow the same companies to recruit more individuals at higher paying positions. The prevalence of the internet for the future means an increasing number of services that could be delivered electronically would be offshored. This is all done in the search of a competitive advantage which comes from getting the best possible human resources at the lowest price. In historical terms, there was a time a few centuries ago where natural resources such as a the availability of one or more rivers to create fertile land or the presence of minerals meant that one country could be richer or wealthier but today, human capital has indeed become the driving force behind capitalism. Blinder (2004) uses the example of the textile industry in the UK which was once the textile making center of the world. The center then shifted to Boston in America and then towards the southern American side and today it is somewhere in China. As businesses continue to find cheaper labor and better locations for the production of goods and services they will relocate to obtain advantages when they can. The internet only makes it easier for them to do so and at a much faster pace (Blinder, 2004). At the same time, access to online information allows for the free flow of ideas around the globe which means that for businesses the internet can be a primary source of information. This has certainly had a huge impact on the businesses and corporations in America and even the developed economies of countries such as the UK, Germany, and France have made gains from it. Brough and Fleisher (2007) discuss the American situation and report that: “The deployment of internet business solutions has yielded to date a cumulative cost savings of $155.2 billion to U.S. organizations. U.S. organizations that are currently deploying internet business solutions expect to realize more than $500 billion in cost savings once all internet solutions have been fully implemented by 2010 (Brough and Fleisher, 2007, Pg. 1)”. These figures are only expected to rise as e-markets and e-business become as important as the regular cannels by which companies operate (Sonoini, 2006). Drugstore.com uses the internet for the management of prescription drugs in a way which was not permissible. It would be very difficult for a pharmacist to keep track of more than a hundred and fifty thousand customers and also efficiently remind them concerning their prescriptions running low but the online database created by the company sends out automated email based reminders and creates a personal level of service. By tracking the usage of drugs by a client, the company may even offer medical recommendations and even suggestions for other drugs and thus improve their sales (nPost.com, 2002). Even companies such as WebMD.com have used the internet to provide health related services since it is a very useful medium of communication. WebMD does a lot more than provider simple information to their customers. The company gives customers a total package that includes everything from access to health related news, local events and happenings within the healthcare industry and even the ability to make appointments through web based tools with doctor in their area (Penson et. al., 2002). Thus the online and offline world work together in order to put the right people at the right place. Even very small companies can benefit from what the internet has to offer and one such company i.e. Oriel wines was the subject of an article by Chozich (2005). Oriel is a producer and global supplier of wine and it uses the internet to give their clients the image that they are much larger than they actually are. They can given the image that they have a supply chain which goes from California to Germany and even to Japan simply because they know how to use the internet efficiently. In fact, Oriel Wines as company is quite simple in its structure, but it uses very complex technologies which to appear as a giant company . Oriel Wines sells more than twenty varieties of wines which it sources from around the world and the company has offices in Europe and in the United States. While it sounds like a large operation, in the real world, the company has a staff of just six persons. They use the internet to get the advantage of size and that places them on equal terms to other larger suppliers of wine (Chozich, 2005). In fact, even a company comprising of just one individual can use online services providers such as PayPal merchant accounts, yahoo stores and even eBay to become a part of the business world. Companies like Oriel Wines do that by using email services and contact management services providers that can automatically generate recommendations to clients based on their previous purchases. Their deliveries, store supply levels, shipping and sales procedures and even a large part of their value chain are outsourced to other companies across the world. Even their distribution lists and related information is securely handled by outsourcing them to service providers such as Constant Contact who make a business out of maintain mailing lists for monthly fees. This allows the company to focus on its core competencies of locating great sources of wine and then offering the same to their customers (Chozich, 2005). Of course, it must be noted that the use of the internet could make the business more complicated. However, it the company manages to use the internet effectively it can give itself the competitive advantage it needs over others in the same market. In conclusion, it is easy to say that the internet and the related IT infrastructure is not supposed to be used simply because it is there. It must be used if the business can see how using it would save time and money. At the end of the day it is easy to see that the internet certainly has had a positive effect on businesses and corporations in the past and will certainly continue to do so in the coming future. Works Cited Blinder, A. 2004. Offshoring: The Next Industrial Revolution? [Online] Available at:http://www.foreignaffairs.org/20060301faessay85209/alan-s-blinder/offshoring-the-next-industrial-revolution.html Brough, W. and Fleisher, A. 2007, ‘Net Neutrality, Small Business and Big Government’, [Online] Available at: http://www.freedomworks.org/informed/issues_template.php?issue_id=2851 Chozich, A. 2005, ‘Managing Technology; Appearances Are Deceiving’, Wall Street Journal. 19 Sep, p. R7. nPost.com. 2002, ‘Interview with Kal Raman: CEO of drugstore.com’, nPost.com, [Online] Available at: http://www.npost.com/interview.jsp?intID=INT00033 Penson, R. et. al. 2002, ‘Virtual Connections: Internet Health Care’, The Oncologist, vol. 7, no. 6, pp. 555–568. Penson, R. et. al. 2002, ‘Virtual Connections: Internet Health Care’, The Oncologist, vol. 7, no. 6, pp. 555–568. Rayport, J and Jaworski, B. 2000, e-Commerce, McGraw-Hill. Sonoini, M. 2006, ‘Scheduling App Leads to Rise in Retail Sales’, Computerworld, vol. 40, no. 24, pp. 17-18. Read More