Benefits of the New IT Strategy to Smartz - Case Study Example

Operations and Information Management Contents Contents 2 Introduction 3 Benefits of the new IT strategy to Smartz and the key challenges faced during transition to an integrated system 3 Recommendation 7 Conclusion 9 Reflective Summary 10 References 12 Appendix 13 Appendix 1: 13 Introduction Smartz retail shop for smart phones and accessories is owned by Imran in England. The business is in the expansion mode. It has seven retail outlets, three out of which is of MobULike. MobULike deals with the entire mobile phone market. The owner has plans to integrate the two units via a B2C e-Commerce system. Such an integrated system is highly beneficial for wide scale of operations. Ecommerce integration is gaining importance with the growing mobile technology improvements and the advent of the Internet. Many organizations use this integration for accessing the consumer market worldwide. It is the fastest method for financial transactions and purchase of products without any human support. This concept is mainly used by businesses to improve efficiency and maximize the revenue of the business (Qin, 2010, pp.45-46). The e-commerce integration into the business system enables the owners to be more focused on the customers and clients for further developments and promotion while the distribution, inventory control, and billing is taken care by the integrated IT system. This method is also adopted by many entrepreneurs in order to make the products appear in front of the customers and even supporting various operations and providing information to the company. In today’s scenario even the retailers who follows the traditional mode of business uses the e-commerce integration to make it convenient for the potential customers to purchase the products online through this new technology (Manzoor, 2010, pp.167-169). Benefits of the new IT strategy to Smartz and the key challenges faced during transition to an integrated system Imran has plans to integrate both the units of Smartz and MobULike in order to access the whole of European market as the latter has got two outlets in Italy. The business is in the expansion mode which requires investment but at the same time comes with a lot of operation handling. The major benefit of such an integrated IT system will be reduction in many tedious works and more customer focus by offering the best quality products. E-commerce integration will help the business to share a common platform for Smartz and MobULike, and access the large market. Consumers and business with the increase in mobile technology depends much more on such IT solutions to provide the cost effective means of getting products, information and services to others. The benefit of reaching out to a wide range of customers would be the major advantage that the company would encounter when such an IT strategy is incorporated. Many companies who do not have an integrated e-commerce system cannot reach out to the customers located in different areas. The new IT strategy would help the local business to reach to the masses internationally (Epstein, 2004, pp.113-114). Internet has no limitations so this platform makes the customers pay for product purchased from any corner in the world. There has been a tremendous increase in the online sales in the past few years. The business which incorporates such an integrated IT system maximizes its revenue to about 250%. Thus another benefit of adopting such a new strategy by Smartz will be an increase in the revenue growth of the firm. The main factor for this growth is most of the customers prefer the ease of convenience and access that comes with such an integrated platform. It helps in initiating the convenience of payments for the product purchased by the customer. Such an ease will invite more number of customers and also attract the impulse buyers. It would benefit the company to get diverse background customers as the online mode may accept different forms of payment. Smartz needs to increase its sales to support the expansion strategy, but the retail outlets cannot be open 24/7 as it increase the overhead cost in relation to staffs (Shaw, 2002, pp.124-125). This new IT solution would benefit the company by making its products accessible at any time without any increase in the overhead costs. Payments and transactions can be easily made without any supervision, even the whole of purchase and delivery of the products can be made through the web enabled technology (Chan, Lee, Dillon and Chang, 2007, pp.253-254). This kind of integrated system will benefit the company by providing instant transaction and eliminating the waiting time period for the merchant. This strategy will even enable an easy recurring transaction for the company. When the customers are opting for a product purchase the card can be re-billed at a certain interval to enhance the continuous purchase of the products by the customers. This in turn would eventually increase the income level of the company. As illustrated in appendix 1.These are the benefits that Smartz would encounter when such a strategy is implemented into the system. It would not only be an easy platform for the customers to access but also will reduce the total inventory carrying cost by restocking as and when required (Shin, 2003, pp.176-177). The overhead cost will also be diminished, and useful information can be shared between the MobULike and Smartz as and when required. Further it would help in expanding and covering more of European market without the need of investment into any store outlets. The costs would be reduced and the revenue will be maximized with an extended consumer base word wide with the implementation of such a new IT solution into the system. Apart from the key benefits that Smartz would have while integrating such a new strategy there are certain challenges that will occur for the company while transiting into the integrated system. The first factor is keeping the trust level of the customers as high as it was when transaction was made through the store outlets. Often e-commerce portal lacks the security measures which make the trust level of the customer’s low. Even the delivery of the purchased products would include shipping cost which will substantially make the purchase price of the product high this in turn would make the customers prefer the store outlet for buying products at a lower price than the e-commerce platform. Another major challenge that the company would face is the security measure in terms of danger of the ecommerce portal be hacked. This will put in stake the confidential information of the customers as well as their payments, and even the information of financial transaction of the company. The company needs to develop all the protective measures for securing its integrated system from being hacked. Another challenge for this transition will be the arguments posed by the intermediaries of the company who would not support such a change. Such a disagreement would lower down the efficiency of the company. The manufacturers would only support the traditional approach of the business. Such an approach would require convincing these intermediaries which is only possible by the owner to state the added advantage of implementing such an integrated system (Prins, 2002, pp.227-228). The transition may even lead to subsequent decrease in the overhead which would result in unrest in the company. Such a system would lessen the work of many entities of an organization that if eliminated from the system would reduce the overhead cost as well as the loyalty of the employees. The owner has to be cautious about the fact that all the elements of the business coordinated well while developing such an integrated system. The challenge of maintaining the customer base is the biggest issue of transiting into an integrated system. The customers associated with the organization would not find a secured platform for financial transaction, even just the visual appearance of the product may not be very appealing for these customers who are used to touch and fill the product at the Smartz stores. The integrated system even incorporates the various operations of the business such as delivery, inventory handling, and transmission of all information and financial transactions between the various sub units of the company. Any kind of system failure will make entire loss of all the data which will have an impact on the entire business flow. The pace of sales would be reduced if such challenges are not attended seriously. Even installation of such an integrated system requires restructuring of the entire business operation, and even requires investment for the implementation of the e-commerce software. This investment needs approval of all the shareholder’s and other members of the company, and convincing them will be a major challenge that Smartz would face. It even needs to plan out for the future cost of updating this software with time and a technical support staff for dealing with problems that occur over the site. The system of payments needs to be revised with such an integrated system. Even the approach would encounter just in time method which would pose a challenge for the company to deliver the product without any lack in time. The company even needs to maintain the actual price of the product irrespective of the shipping costs. Thus these are the challenges that Smartz has to encounter while implementing such an integrated system with the help of IT solutions Recommendation The concept of introducing a new strategy of web enabled services into the system of Smartz by Imran is no doubt an effective measure for maximizing on the revenue returns at the same time reduction in the overhead expenses. But along with its benefits it poses certain problems of data and system security, and gaining the trust of the customers as the major challenges to be overcome by Smartz. For successful implementation of the new strategy the company is highly recommended to gain the trust factor of the consumers. As the Ground theory which is the basis of many researchers of e-commerce there has o be a physical element present in the website. This can be achieved by the presence of the company’s owner’s photograph on the ecommerce site along with some testimonials from the customers so that customers who visit the site do not feel that are being cheated. The presence of the company’s essential elements on the site gives a physical touch to these integrated systems. Even the owner should address his speech in this site stating that the company assures secured transaction between the two parties additional to the convenience of a merged platform of both smart phones and other phones for the customers. The data security aspect of this new strategic implementation can be well achieved by having a model that incorporates a tracker for a constant check on transactions and even a database that acts as a backup in case of system failure and can operated from any other system. The model can be implemented in this way as shown in the diagram – Such an efficient system will incorporate all of the operations of a business that is accounts, supply chain, administration and would enable secure FTP where the internal mechanism cannot be viewed by any other member outside the organization. The scheduler will allocate the specific tasks. The database would contain the required details needed of all the separate entities of the organization. Apart from enabling the web services to the customers the system will also create backup files which are to be used if there is any technical failure in the system. The company is recommended to integrate all of the in house activities by effective sharing of information. The company has the option of using open source software and it can use by making the source code licensed (Plant, 2000, pp.265-266). The open source software would help the company to make the changes in the code as and when required, at the same time since it is copyrighted it cannot be duplicated by any other company. It will even help in reducing the cost incurred by the company for purchasing software’s from commercial vendors. The entire business using this ecommerce strategy can be well demonstrated by the following diagram – The system has a secure FTP if implemented successfully according to the recommended structure which ensures that the personal data of the customers is not at stake. It even gives the company an effective platform to share the different products of Smartz and MobULike on the same interface by incorporating all of its operations and even ensuring a security for the transactions made by the customers. The implementation of the recommended model would even keep the trust high of the suppliers and other intermediaries as the efficiency of all the different departments increase with the formation of such IT enabled integrated systems. Conclusion Imran as the owner of Smartz has established a detailed plan for expansion in the European countries. It has planned to achieve this through an integrated system. The web enabled services would help the company to capture more of market share and at the same time would make t convenient for the buyers to purchase product easily. A sudden change from the traditional mode of business to an integrated system ensures many challenges. The challenges can only be tackled by successful implementation of the system and through no compromise on the quality of services. The IT solution strategy is beneficial for the business but at the same time requires effective measures by the company to safeguard the IT interface. With an increase in the number of cyber crimes it is highly mandatory for every company to have a secured IT function in the company. The implementation of such required a great deal of investment from the owner to be made to the IT solution providers, but if implemented successful ensures double the revenue growth each year for the company. Reflective Summary When I started off with this report I felt that the integration of ecommerce into the business system comes with a lot of complexity. Such systems can only be supported through large companies and not by small enterprises. But there are many small retailers who use such an approach of expanding globally. I feel that such integrated systems ensure more expansion of the company, where the company can reach out to that customer’s which would not have been possible otherwise. I have learned the Ground theory which has made me analyze the different ways that an IT researcher utilizes to safeguard the various web enabled services and at the same time ensures security for the transactions that customers make. As in this case the company was integrating the systems for it internal operations. I have seen the different aspects of developing the ecommerce interface. The way it benefits the organization to perform operations globally as well as synchronizes all of the operations that are internal to an organization. I have come across the benefit of open source software, and the reasons behind why it is implemented in the organizational system. I have seen the disadvantages that the ecommerce integrated systems have during my study. It has also made me aware about the different measures a company takes while transiting from a traditional system to an integrated system. References Chan, H., Lee, R., Dillon, T., Chang, E. 2007. E-Commerce, Fundamentals and Applications. Delhi: John Wiley & Sons. Epstein, M. J. 2004. Implementing E-commerce Strategies. USA: Greenwood Publishing Group. Manzoor, A. 2010. E-Commerce. USA: Amir Manzoor. Plant, R. T. 2000. Ecommerce: Formulation of Strategy. USA: Prentice Hall Professional. Prins, C. 2002. Trust in Electronic Commerce. UK: Kluwer Law International. Qin, Z. 2010. Introduction to E-commerce. Spain: Springer. Shaw, M. 2002. E-Business Management: Integration of Web Technologies with Business Models. USA: Springer. Shin, N. 2003. Creating Business Value with Information Technology: Challenges and Solutions. USA: Idea Group Inc. Appendix Appendix 1: Read More