E-commerce System at Powells Books - Case Study Example

E-commerce at Powell’s Books Executive Summary The twenty-first century has become theage of explosive e-business activities: this is due, in part, to the unprecedented development of the Internet. At the moment, companies that have physical stores and shops have embraced the idea of doing business on the cyberspace or electronic superhighway known as Internet (Shields, 2001:16). Several reasons may have necessitated this move: there are discussions about the affordability of the Internet and the possibility of reaching a wider, global market at a considerably reduced cost when compared with a physical business (Li 2006:1). However, for optimum performance, the systems making up the E-Business need periodic analysis. And one of the commonest modalities for carrying out this analysis is the Principle-Based System Analysis (PBSA) designed by Stevens Alter (Alter, 2002). This report is centered on the e-commerce activity of Powell’s Books, highlighting the company’s background, objectives, Work System and other perspectives necessary for Powell’s Books to achieve its organizational success. Recommendations are made based on the findings in the analysis. Introducing E-commerce at Powell’s Books Powell’s Books, according to its history, began its operations from a storefront in 1971 on a derelict corner of northwest Portland, Oregon (Powell’s Books, 2009). The company has primarily been involved in buying and selling used, new, rare and out-of-print books: these included paperbacks, clothbound and hardbacks. The company expanded its market share by initially establishing seven stores in different parts of Portland. However, at the height of the Internet boom, Powell’s Books decided to go online in 1994, a venture that proved successful as the company was able to harness all its resources together for the new challenge (Powell’s Books, 2009). Objectives of Powell’s Books The primary objective of Powell’s Books is buying and selling used books. The company has been able to build a successful business around this particular goal (Powell’s Books, 2007). However, the company is relying on the convenience of online purchase to improve both its buying and selling mechanisms. Since 19944, when it first went online, Powell’s Books has attempted to reach as many booklovers as possible without the hassles of visiting an on-site bookstore. The procedures for buying used books online are so easy that the transaction could be completed within a few minutes. But Powell’s Books didn’t stop there: the company aspires to spontaneously improve on its business activities, most especially its e-commerce outlet, Powell’s.com which has sold books to millions of bibliophiles worldwide, reaching farther than the localities of Portland where its physical bookstores are currently situated. The Description of Powell’s Books’ E-commerce System The components of the Powell’s Books’ e-commerce system are highlighted as follows: Business Process: This involves the actual business operations that include buying and selling of books, ordering and orders processing, packaging and delivery etc. This is the major aspect of the company’s activities. At Powell’s.com, buyer could easily search for the books they are interested in buying, place an order online and receive offers from Powell’s Books as soon as possible, then pay for the book with a credit card and wait for the book to be delivered to his/her doorstep (Powell’s Books, 2007). Alter (2002) reckons that the business process is the “core” of all the activities that occur in an organization: and he strongly believes that different results are obtainable even though the same business processes are repeated, irrespective of which technology or idea is used or who carried out the job (Alter, 2002). Participants: The human components of this e-commerce system constitute the participants in the overall business operations: These participants include the webmaster, data entry specialist, programmers, e-commerce specialist, Internet marketers, copyrighter and editor. All these personnel work collaboratively to produce what the company’s customers want. Bach & Sisson (2000: 43) believe that great personnel management is helpful in harnessing all the potential inherent in a business system: that is, without the human aspect of an organization, it would be almost difficult to utilize the technology available at the organization or process the necessary information that is needed for organizational development. The participants of a business process often add some quality to the overall products and services in the sense that they are either consumers of the same products or similar ones. Information: Information system entails gathering relevant pieces of information from the customers or the company’s workers and engages in processing, storing, transmission, retrieving, organizing and exhibiting for accessing of all the collected information (Alter, 2002). Technology: Information technology largely contributes to the success of e-commerce at Powell’s Books: with the help of sophisticated software, information could be processed at the speed of light, and orders and transactions could be handled properly, no matter how big their volume is (Khosrowpour, 2001:10). Products and Services: In case of Powell’s Books, the products/ services are used, new, rare and out-of-print books. These are what customers are looking for when they decide to go into a transaction with the company. Customers: These are those who access Powell’s .com to buy books and always expect to be treated with some convenience. External factors: The two major external factors that affect Powell’s Book business process are infrastructure and context. If the infrastructure isn’t in good shape, it would affect the quality of service customers receive at Powell’s.com. And if the context of the business activities lacks enviable characteristics, customers would avoid buying from Powell’s Books as a result of dissatisfaction (Denove & Power, 2007:17). It requires serious efforts to provide products/services that would satisfy the desire of Powell’s Books’ numerous customers worldwide, and the company has positioned its resources to meet the challenges posed by its ever increasing customer base (Powell’s Books, 2007). Below is a typical Work System Snapshot applicable to Powell’s Books, as well as any other e-businesses (Courtesy of Alter, 2002). (Copyright: Alter 2002) Below is the hypothetical diagram for Powell’s Books’ Work System Principles (Courtesy of Alter 2002). (Copyright: Alter 2002) The Principle-Based System Analysis (PBSA) Steven Alter designed the principle-based system analysis as a methodology for analyzing a work system (Alter, 2002). There are some questions that readily come to mind: are all the components of the system functioning properly? Is there anything the organization could do to influence the effects of the external forces? Each of the seven principles of PBSA are outlined below from the organizational perspectives: Increased efficiency: It is in the best interest of Powell’s Books to increase the efficiency of its business process: this means, orders would accepted quickly, processed as soon as possible and be ready for dispatch according to the customer’s deadline. Cross (2004:5) compared this improved business activity to a surgical operation that pierces deeply with the hope of getting to the base of a patient’s health problem and improving it. The business process is the backbone of every other aspect of running Powell’s Books: if there are problems in this area, the other sections would be seriously affected. Therefore, Alter (2002) suggests periodic checking on the business process to detect the presence of any problem that could render the whole company redundant if solutions are not proffered on time. High-quality products/services: The managers at Powell’s.com are mostly interested in offering products they are sure would be attractive to the choosy customers. There are stiff competitions from book companies like Barnes and Nobles, Amazon and Book retailers that Powell’s .com cannot afford to toy with its customers’ satisfaction (Mehta, 2004: 1). Though dealing in used books, Powell’s.com often prepares the books in a way that they would immediately attract the attention of prospective buyers. Leaving books in their dirty states or forms would only drive customers away. Information processing: In order to stay abreast of the latest technique of gathering and processing information, Powell’s Books has always invested in the state-of-the-art information technology and software. For the fact that information technology is a dynamic activity where new ideas and concepts find their ways into the mainstream, the IT engineers at Powell’s have always equipped themselves with the latest equipment so as to serve the company’ s numerous customers satisfactorily. Zhou (2003: 16) reflects on the significance of Information technology/Information systems, without which it would have been impossible to operate e-commerce. The electronic super highway assists so much in the process of receiving information, process it and disseminate it to the sections of the company where it is urgently needed. The speed of operation associated with the e-commerce comes from the quickness at which information system makes it possible for transaction to be conducted by a mere click on the computers. Powell’s.com operates within this framework: and this is why the company is growing rapidly after joining the e-commerce bandwagon 15 years ago (Powell’s Books, 2009). And this may have also helped the company in its expansion into sophisticated bookstores that have become a favorable spot to go to for booklovers. E-commerce embraces all other forms of e-business activities: like e-advertising, e-marketing and e-ordering. The success at Powell’s.com lies in the company’s ability to mix all these activities together without obvious glitches. Advanced Technology: As explained above, Powell’s.com puts its money on advanced technology that would make its business prosperous. This is evident in the company’s yearly budget on technological materials like software and other systems. Advanced technology is necessary for information system to perform properly. And since information technology isn’t a static phenomenon, it is expected that Powell’s Books would continue to equip itself with the latest technology for advancement. Great Personnel Management: As the saying goes, it takes a good trainer to turn a dog into a police officer; likewise it takes great personnel management to produce workers (participants) that would work hard in order to let a company achieve its objectives. Powell’s.com has a well-organized management structure, and the personnel are adept in their area of specialization (Bach, 2005:3). The IT engineers work arduously to make sure the information systems are always connected and functional; the customer-service department works hard as well to keep alive the customers’ interest in Powell’s products/services. Nice Products/services: Selling great products/services are necessary to maintain the cutting-edge leadership that Powell’s.com enjoys among the online bookstore businesses. Customers are always interested in spending their hard-earned money on products/.services that offers similar worth for their money. In all customer-relationship issue, what concerns the customers first and foremost is the quality of the goods or services they get from a supplier or service-provider. The adage that a good product is like honey that will attract the customers is still realistic in this modern-day business world. Irrespective of who the customers are, Powell (2002: 117) believes that serious attention must be paid to offering services that would directly fulfill the demands of the consumers: in this way, the perpetuity of the business would be guaranteed. External Influences: There is no business that is an island on its own: Powell’s .com realizes this fact. And this is why the company has put in place machineries that could handle the influences of external factors like infrastructure and the business context or environment. Good infrastructure helps the company to function well in face of stiff competitors like Amazon, Barnes and Noble and the others. Good personnel management, good technology and good information system cannot function alone without the available of supporting infrastructure. One important issue that Likosky (2005: 3) raises in his study about infrastructural development is that every business must wake up the challenge of getting things straight when it comes to putting their operations within the reach of a functional infrastructure or else the business would fail woefully. A company like Powell’s.com who serves customers across the globe has provided itself with a cutting-edge infrastructure that would make its activities perform spontaneously without experiencing a single hitch Conclusion From the above-highlighted facts, it is interesting to have noticed that no e-business would succeed without harnessing all the seven indices/principles described by Steven Alter (2002), as shown above. Powell’s.com uses all these seven principles to position its business as a world player in e-commerce of buying and selling books online. The company has been able to put together bright minds that could utilize the available technology to necessitate smooth information system by gathering pieces of information from the customers, process them and distribute them to the right quarters that need them. This is one of the reasons Powell’s .com has triumphed in the business of online book merchandizing. And since the company’s customers are satisfied with the kind of products/services they receive, this has increased the company’s financial base that eventually led to the expansion of the Powell’s Bookstore chain (Powell’s Books, 2009). Recommendation For Powell’s.com to continue to be a powerful player in online book business, the company has to listen to the priceless advice of Wieczorek et al (2002: 10) which states that business continuity comes only from arduous efforts to continually renew the Information technology as the business demands for it. The business process of buying and selling books online is a dynamic one, and to keep abreast of the changes in the business, Powell’s.com needs to constantly put all the seven principles that make up its Work System to constant analysis. This is very important because it will expose any loopholes in the operations of the company which need a quick fix so that the customers would not be disappointed in any way, and the business of Powell’s.com will continue to remain competitive in a field that is highly congested with both the big and small rivals. References 1. Alter, Steven (2002) Information Systems: foundation of E-business, Upper Saddle River, N.J.: Prentice Hall. 2. Bach, Stephen (2005) Managing Human Resources: personnel management in transition, New York: Wiley-Blackwell. 3. Bach, Stephen and Sisson, Keith (2000), Personnel Management: a comprehensive guide to theory and practice, New York: Wiley-Blackwell. 4. Cross, Kelvin F. (2004) Quick Hits: 10 Surgical Strike actions to improve business process performance, New York: AMACOM Div American Management Association. 5. Denove, Chris and Power, James D. (2007) Satisfaction: How every Company Listens to the Voice of the Customer, New York: Portfolio. 6. Khosrowpour, Mehdi (2001) Pitfalls and Triumphs of Information Technology Management, Hershey, Pennsylvania: Idea Group Inc. (IGI). 7. Li, Feng (2006) What is E-Business? How the Internet Transforms Organizations, Singapore: Wiley-Blackwell. 8. Likosky, Michael (2005) Privatising Development: transnational law, infrastructure and human rights, Netherlands: Martinus Nijhoff Publishers. 9. Mehta, Pradip V. (2004) An Introduction to Quality Assurance for the Retailers, Bloomington, Indiana: IUniverse. 10. Powell, Andrew (2002) Taking Responsibility: Good Practice Guidelines for Adults with Asperger Syndrome, London: National Autistic Society. 11. Powell’s Books (2007), Press Release: Powell’s Buys books Online, [Online]. Available: http://www.powells.com/news_obb.html [27 July 2009] 12. Powell’s Books (2009), The History of Powell’s Books, [Online], Available: http://www.powells.com/info/briefhistory.html [27 July 2009] 13. Shields, Murrell G. (2001) E-Business and ERP: Rapid Implementation and Project Planning, London: John Wiley and Sons. 14. Wieczorek, Martin, Naujoks, Uwe and Bartlett, Robert (2002) Business Continuity: IT Risk Management for International Corporations, New York: Springer. 15. Zhou, Zongqing (2003) E-commerce & Information Technology in Hospitality and Tourism, Florence, Kentucky: Cengage Learning. Read More