E-commerce Activities at British Oxygen - Case Study Example

Running Head: ECOMMERCE Ecommerce [Name Of Student] [Name Of Institution] ECOMMERCE INTRODUCTION Business-to-consumer (B2C) e-commerce is the commotion in which consumers acquire information and procure products by means of Internet expertise (Aizen, 2002). The probable profits of ecommerce have been extensively publicized (e.g., Gefen et al. 2003). E-commerce implementation is an example of IT reception and use within a surrounding that merges technology acceptance with marketing fundamentals, and it consequently needs separate theorization surrounded by the information schemes literature. However, in spite of an up-and-coming interest amongst IS researchers on the way to B2C e-commerce occurrence, there is only a restricted and fragmented accepting of online consumer activities (Zand, 1999). The principle of this learning is to describe the technology and infrastructure management requirements of an organization that wishes to engage in or increase its e-commerce activities. Business leaders are identifying that e-business is the principal changeover for businesses, the market and rivalry from the time when the Industrial Revolution. This topic has disintegrated into business boardrooms already with respect to the management issues that come along with e-commerce. COMPANY OVERVIEW With changing business environment and competition BOC (British Oxygen) needs to be a more competitive player in the market. With respect to this vision BOC requires a cost efficient and productive operating model that would enhance its potential to capture the market. Due to the adhoc practices and lack of future vision, many issues have come up in the PG&P distribution network, which are adding to its costs and making it inefficient. At present, there are seven different channels through which our products reach the consumer. There is lack of standardization of procedures. There are no set criteria as per agreements with the distributors. Each distributor has an exclusive contract with BOC and it is difficult to keep track of various clauses that exist. The policies and procedures are silent about the ownership of goods once it changes hands in this distribution network. This raises various accountability issues in case of accidents and mishaps as well as commercial controls. Another issue is of the variable retail prices. There are instances where different distributors charged consumers differently for the same product. There has been no assignment of territories for a particular distributor and he is free to sell anywhere in the country. There has been lack of checks and balances regarding BOC assets that these distributors have i.e. the cylinders. A lot of data has not been updated which has caused discrepancies in cylinder quantity with BOC and physically with the distributor at the time of verification. A CAM (Cylinder Asset Management) exercise needs more focus to resolve these differences. Our own compression facilities need upgrade to bring them at par with international BOC standards and the best method in this current world of cutthroat competition is to steer the company towards e-commerce. This will result in more efficient operations and improvement in customer care and turnaround time. A separate project of PG&P efficiencies is in hand to further improve this aspect in tandem with the recommendations that may come out of the present project. All of this needs to be corrected and streamlined. The procedures have to be standardized and updated for consistent operations and better results. Hence modifying the operating model to that which can include e-commerce is inevitable. These important changes are convinced to have evenly thoughtful impacts on the IT purpose and industry. WHAT IS E-COMMERCE? IBM is credited with bringing the term e-commerce into widespread use, shifting the discussion from technology to business strategy (Addison, 2003). The range of planning for e-commerce is broad, and encompasses internal business processes, external interfaces with customers, suppliers and partners, and Internet-based technologies and standards for networked, electronic systems. Cisco defines e-commerce as putting all business processes on Web-based networks and integrating them with all relevant information available globally. So far, however, the main manifestations of e-commerce have been in marketing and sales--essentially, ecommerce. But ecommerce is only the tip of the iceberg; becoming an e-commerce is about transitioning your organization into the Information Age, where information flows are at least as important as cash flows, and value is derived by effectively managing intangible assets rather than just your physical assets. The Internet enables a dramatic reduction in the cost of inter-organizational coordination and transactions, which further changes the nature of business relationships and encourages greater use of business partners over internal departments. In the e-commerce era, there's much greater pressure to grow quickly, and so business managers have much more choice in how they source the business process capabilities they need (Davis, 2003). Together, these changes are establishing a foundation for truly virtual organizations--light, nimble, focused on new sources of value and based squarely on a principle of leveraging the services of others. Look for the development of e-commerce to unfold over the next two to three years. And note that each stage has significant implications for IT management and operations. PHASE ONE: ECOMMERCE BOC is in the early phases of this stage today, and it focuses on using the Internet to buy and sell products and services. One of the first ways this stage has affected IT involves website content management. Simply put, there has to be a reason for customers to visit the site, and that translates into large amounts of content--detailed product information, news, evaluations, etc.--which change frequently and must be highly accurate (Zand, 1999). In firms like Dell and Cisco that are leading the ecommerce revolution, there are now thousands of people involved in creating and maintaining website content. Indeed, content developers are replacing programmers as the leading job in Web-intensive companies, and content management systems, which maintain the integrity of websites and allow them to be changed on a continuous basis, are becoming mission-critical. This migration also has created a significant data management challenge, as Web customer interfaces generate huge volumes of incoming data on customers and their interactions with the website (Olson 2000). The management and analysis of all this data is critical, so if data warehousing and database marketing haven't been important to your organization, they will be soon. Similarly, more email is coming into Web-based firms. It is essential to be able to respond quickly to inquiries, but that requires systems to manage the email flow to people who can respond to specific kinds of questions. With websites becoming part of the fundamental flow of revenue and customer contact, some new but familiar rules are being applied (Taylor, 1995). For example, the website simply can't go down; it always has to be open for business. The website also must be scalable, so that however many customers want to visit your site can, whenever they want. And the website has to be secure, so the transactions and records of both your company and its customers are protected. Coping with these challenges requires the best network and systems management tools available, as well as advanced solutions for load balancing. It may also require creating a more complex IT management and governance structure (Kalakota, 1997). For example, new units may have to be created to pursue Internet opportunities, which raises complex questions of how back-end systems are shared and leveraged. PHASE TWO: INTERNAL EFFICIENCIES The second stage for BOC managers focuses on improving internal efficiencies via intranets, collaboration systems (e.g., net-based calendars, conferencing and discussion groups) and knowledge management systems. The goal is to help the organization achieve two key priorities: Effectively support the firm's knowledge workers, and enable the enterprise to learn faster than competitors about markets, technology and new business models (Davis, 2003). Removing barriers that exist in BOC to internal communication and coordination is essential to keeping an enterprise innovative and quick. And don't underestimate the importance of those attributes when your firm is confronted by a "dot com"--a company born on Internet time and virtual from the start. Moving internal business processes to self-serve, Web-based systems also keeps costs down, which is necessary to remaining competitive. Speeding up, getting smarter and using integrated information are mandates for IT as well. Plenty of "new age," Internet-based IT service providers will offer lower cost, more responsive alternatives to the internal IT staff. (Kalakota, 1997) As a result, the IT operation itself must adopt e-commerce practices, both in the way it interfaces with internal customers as well as how it manages suppliers. IT administration and support must migrate to Web-based systems that feature self-help interfaces wherever possible. Web-based purchasing of IT systems and services must become the norm. PHASE THREE: STRUCTURAL CHANGE ESSENTIAL AT BOC The third stage will involve structural changes in value chains and business architecture. Standards such as XML and the global nature of the Internet lower the cost and difficulty of linking to external providers (Addison, 2003). Thus, it will be easier and more cost effective to outsource more functions. In this new environment, it will become critical to focus on a few core competencies at BOC, and then to rely on external partners for all other activities. In the e-commerce world, it'll be easy to tap into the world's best providers of manufacturing, logistics, HR, finance, legal and, yes, even IT. A modular business and IT architecture will enable rapid change in partners and service providers. Options at BOC are increasing in number and quality. It is already feasible to offer applications as services over the Internet, or to obtain lower-level platform and operations services on a flexible, outsourced basis. Even network, system, application and service management software is becoming available from net-based companies such as Manage.com, NetOps (www.netops.com), Keynote Systems (www.keynote.com) and Inverse Network Technologies (www.inversenet.com). (Taylor, 1995) The same logic that applies to other parts of the BOC business also applies to IT: Determine where you will invest to stay competitive in service quality and cost, and then use providers to meet needs in other areas. If you don't adopt these strategies, odds are your internal customers will do it for you. These changes will affect BOC IT's focus: From application development to information management and content development; From network and systems operation to service management; From systems integration to service integration (Cheung, 2001). IT will evolve into a service aggregator, integrator and manager. IT managers will worry less about how things are implemented--that will be the outsourcer's problem--and more about what should be implemented, at what cost and at what level of service. IT should retain responsibility for activities like planning, strategy, policy setting and many aspects of administration. As more IT services become outsourced, managing security will change from setting up firewalls to using encryption to protect information wherever it's stored. If an IT department continues to provide some operations and support activities itself, it needs a strategy to build scale and maintain competence (Davis, 2003). Ultimately, it needs to configure and measure itself as service providers, providing internal and possibly external customers with access to policy management and administration services. KEY REQUIREMENTS The movement into e-commerce requires a partnership between leaders in IT and business. Differences must be overcome to make intelligent decisions concerning strategy, priorities and implementation approaches. Business input on IT outsourcing decisions is critical, as is IT input on strategies for implementing ecommerce. E-commerce creates an opportunity to improve relationships between IT and the business (Davis, 2003). IT-based companies--e.g., Cisco, Dell and E-Machines--show what success in the e-commerce era looks like. In the same way, IT departments can become models for their firms, and move aggressively to adopt e-commerce practices and to support such initiatives of the rest of the business. While marketing led the initial ecommerce efforts, responsibility for a more comprehensive approach to e-commerce is shifting back to IT. Now is the time to build a strategy for adopting e-commerce practices and approaches. It is also time for service providers to refine their customer interfaces to give IT managers’ access to policy, security and administration controls (Kalakota, 1997). A LOOK AT THE CORE ISSUES AND THEIR SOLUTIONS As ecommerce grows in importance, so does the need to maintain good response times and service availability. The service lag and outright failures that occurred during the 1999 holiday season are strong evidence that website operators need to have more effective-and hopefully, integrated--ecommerce management systems (George, 2002) The ManageXML language allows network managers to model, analyze and visualize the firewall, switches, routers, load balancers, Web servers, application servers and underlying databases. The BOC company plans to extend this model to cover service level agreements (SLAs), and to model e-business events and transactions. The key thing is managing the services that you may not have a handle on. Management at BOC will also have to manage the many third-party services involved. A growing number of ecommerce sites already have turned over a significant share of their infrastructure operations to third parties--ASPs, ISP hosting companies and carriers--but outsourcing this function means more than just having someone operate servers and routers. It also involves integrating an e-retailer's Web-based catalogs and order-taking systems with third-party credit-response networks or other financial clearinghouses (Olson 2000). Bringing together the many separate boxes and outsourced services into some coherent entity is one of the most significant management challenges that network managers’ face. While none of the tools in the market provides a total solution, work is under way to provide more comprehensive capabilities. The Internet infrastructure includes everything from a WAN VPN connection to the router, switches and Web server, and all of the applications and services running over the website. Next comes the Web interface and interactivity with the customer, which includes all of the transactions, made over the Internet, extranet or VPN. Just viewing Web response from the http level won't uncover the dynamics that underlie the transactions. The complete set of transactions that users face--browsing and/or searching an e-catalog, filling a shopping cart, etc.--and the underlying processes need to be modeled in order to get meaningful response-time information, to find bottlenecks and find out what causes response lags. Finally, the management at BOC needs to look at the business processes that, while not related to the consumer's interaction with the ecommerce site, may have a negative impact on service performance. For example, taking an order and accepting payment is just the first step. Inventory must be up to date, and if an outside supplier is to fulfill the order, that transaction must flow according to expectations (Kalakota, 1997). Email may have to be generated. Does it all happen on time? Most ecommerce network management tools focus on the response times for purchasing transactions over the Web --for example, the proverbial shopping cart application. Monitoring the cart falls under the category of transaction management, which takes into account all the internal business system logic flow associated with each order. Delays can creep in at any stage of the buying process. Typically, a shopping-cart transaction is controlled by a specially-purposed application server. Everything managed by the application server, with all of its extensions (e.g. order taking, billing, removing the item from inventory, packing, shipping, and customer service), must be monitored to maintain adequate and consistent response times. One weak server can stop a shopping-cart application in its tracks (Kalakota, 1997). One of the hidden phantoms that haunts the shopping cart application is if the "protocol turn" becomes too lengthy. This refers to the back-and-forth that occurs between the buy button and the return screen, which tells the customer when to expect shipment. The application server, being the gatekeeper of the transaction, and the database server, being the engine that creates the new data records for the transaction, must work well together under load. Too much activity can cause the application server and database server to get out of sync, causing a condition called "thrashing." Thrashing is a symptom of an un-tuned system (Kalakota, 1997). To uncover these situations, the usual approach is to keep tables of statistics on the application, database server response times and other performance metrics. This can be done in a fine-grained manner to uncover which sub-processes are consuming too much time. CONCLUSION Switching over to e-commerce is surely one of the best things for BOC at this stage but along with that comes core issues of management. Transition to e-commerce will entail new and more effective management strategies as far as technology updates are concerned, but it also brings along added management tasks such that of securing data, online payment management, management of staff and training them in current technologies etc. If BOC wants to retain its position of being the safest and best supplier of compressed gases all over the world it's time to unify the management of networks, applications (shopping carts) and systems, as well as the computers upon which Web servers, application servers and databases run. The stakes are significant: Whichever dot-com can deploy the tools and the people who can take a multidisciplinary approach to management has the best chance of winning in the competitive ecommerce world. Read More