Strategic Information Technology Management of British Telecommunication - Case Study Example

British Telecommunication Day, Month, Year Introduction The dawn of 21st century has characterised the world with high penetration of Information Technology. Almost all organisational functions have been under the affect of automation and digitization. The old practices of data keeping and retrieval are more in fashion. Cost reduction techniques have proposed the concept of virtual offices. In the present global settings, the virtual business and digital operations are constantly on the rise. This essay presents the detailed insight into the business practices by the virtual organisation. In other words, it sheds light on the strategies of online firms, their competitive advantages, and the challenges. Conducting business online is a new trend quite opposite to the conventional business settings. Introduction to the e-Commerce Organisation There are many organisations establishing this business online and the existing ones are shifting their operation to the electronic platform. Common examples are eBay, Amazon, British Telecom etc. This report will focus on British Telecom. It is the first telecommunication company in the world. The information about British Telecom Group is available at their corporate website. It states that the business commenced from telegraphic communication in 1846 with the name of Post Office Telecommunication (BT, 2011). In 1980, the corporation renamed itself to British Telecom and since then it is a leading private firm marking success in both global and international markets. It underwent a gradual development and today it is the topmost user of technology in the business market. It not only provide telecommunication services to its home and corporate customers (BT, 2011), but it has also adapted all their business practices according to the digital technology. Scope of the Essay The scope of the essay is limited to the IT strategies of the E-commerce organisations. It looks into the Information Systems maintained by these organisations and evaluates how these systems are useful in conducting e-business. It also gives an insight into the user perspective of these organisations i.e. how they attract the customer, identify their needs, and ensure satisfaction with their products and services. Objectives of Essay The objectives of the essay are as stated below. 1. Explain how e-commerce organisations are different from traditional organisations 2. Explain how information systems of e-commerce organisations help them carry out all their functions. 3. Explain how these organisations collect, analyse and disperse the required information for decision-making. 4. Explain the control on logistics in e-commerce. 5. Explain how e-commerce helps businesses attain competitive edge and earn market share. Developments in the field of ICT Information & Communication Technology, commonly known as ICT, is the combination of computer technology and communication technology. In simple words, these are the networking technologies playing an important role in reshaping communication channels. The first network was DARPANET, established for US Department of Defence. It was Advanced Research Project Agency Network (ARPANET), mainly designed for defence purposes, however, the prospective benefits attracted educational sector as well. Gradually its use became common in business sector and today commercial organisations are relying on it for their marketing and profitability. The computer technology emerged from stand-alone terminals to high tech servers communicating with millions of workstations all over the world. The time and zonal differences portrayed eliminations. Same information is available round the clock across the globe. In order to meet the business requirements, the organisations started uploading text information on the websites. The gradual developments paved the ways for bulk transmission of data. The recent developments have made real time transaction processing possible. Hence, the continuous efforts commenced to transform the business activities on an online platform. Today, websites are the major source of information about organisation existing anywhere in the world. It has also become the live source of information. The online services are attracting huge target market. It offers the customer with readily available information, ease to access data and speed to carry out transactions. Emerging digital economy Banks are offering cash withdrawal services on weekend’s offsite. All payment related services have undergone integration with banking sector providing the account holder with maximum ease to carry out online transactions, saving time from the hassle of visiting physical offices for bill payment, and carry cash for shopping. Payment through bank debit and credit cards is a simple option when people visit stores. The ICT has also made it possible that organisations have winded up the physical outlets and have started offering services online. The customer only needs to surf the catalogue and click the desired product. The delivery of the product is the responsibility of the organisation ensuring commitment to time, quality and price competitiveness. Internet has become the front-end office of many organisations while bank-end office functions incorporate into information systems. Entire decision-making shifted to the reports generated by Information Systems working at various levels. Organisations are dealing with manufacturing concerns and suppliers on the principle of Just-In-Time Inventory replenishment method. It is also possible that the distributers collects products from the suppliers and deliver them directly to the customer, when a system triggers order confirmation from the customer (Lambert, 2008). In service sector, the cost of maintaining inventory reduced furthermore. Intangible features had greater focus due to being a service provider. British Telecommunication is a service provider, which gives telecommunication connections to the customer whenever the customers place any request. Their website has huge information related to the variety of services offered to the people. They offer their services to the wide range of customers yet maintain not a single physical point of contact. This concept has raised certain challenges as well. It is vulnerable to highest data security threat, which is increasing with every integration step of the industries. Cyber crimes are taking birth and data protection from unlawful users is a serious issue that needs consideration. Organisations have to go a long way to ensure that systems remain protected against malicious threats of cyber criminals and unlawful activities of authentic users (ICO, 2009). New (versus old) ways of strategic thinking The old concepts focused on product, price, promotion and placement (4Ps) so that they can create market awareness and win market share. The new concepts focus on cost, convenience, commodity and channel. These four Cs have similar meaning as 4Ps but in terms of philosophy, they have brought bug changes (Eastin, Daugherty & Burns, 2011). The old concepts focused on price competitiveness while the new practices are dependent upon cost effectiveness. It is the prime reason, which led ICT to boom in the business sector. As mentioned earlier, the information systems save time to store and retrieve data, ensure accuracy, atomicity, and enables huge data storage for longer period as compared to manual records. Commodities replaced the concept of price and services. Commodity, in literal meaning refers to tangibility of the offering, but the recent trends have categorised a transaction as a unit of dealing which is measurable and incurs certain cost. Therefore, the element of tangibility is reducing and organisations are focusing more on intangible yet important factors of business offering. For instance, ATM card is a commodity but it enables the user to make cash transactions with ease. ATM services are more important to the user but that service is not possible without physical ATM card. Place is substituted by channel. Gone are the days when organisations focused on establishing their outlets everywhere so that the customers can access them readily. The businesses in the present era operate virtually that is at the distance of a click by the consumer. Talking in the perspective of BT, it operates its business in 170 countries yet has not a single physical office anywhere. All the communication with customer, supplier, employees and management takes place through electronic means and channels. The strong MIS at the back of this communication has enabled BT to save huge cost on establishing physical offices and provide training to the employees to create leads in the local market. Promotion used to be the most important factor of marketing mix, which could make or break the brand image of the organisation. The marketing departments focused on Above the Line (ATL) marketing activities to create more awareness and increase market share. The concept of communication has changed this strategy altogether. The focus has diverted towards the concept of Below the Line (BTL) marketing activities that attracts more customers and puts lasting image on the mind (BT, 2011). Application of theory The theories in Business Management strongly focus on the customer satisfaction as the key of business success. Customer satisfaction is the function of quality of product and service, innovation (Hulsmann & Pfeffermann, 2011), price competitiveness, features; value added services and the concern towards customers’ requirements and complaints. The six-sigma projects focus on the process improvement leading to reduced number of defects. The customer purchasing even a single item judges the organisation based on the item bought. If that one item is defective, the image of entire organisation will be negative (Lambert, 2008). Based on the concept of customer satisfaction maximization, British Telecom works towards penetration in the market and earn competitive advantage (BT, 2011). It enables its customers to use the services of British Telecom easily (Telecommunications Industry Association, 2011). Structured analysis All telecommunications organisations possess the aim and passion to become global leaders at one point of time or another. British Telecom had this aim since its commencement in the founding year, 1980. In the year 1994, British Telecom formed a joint venture with USA’s top telecom operator. Both these firms under the joint venture had aspired towards creativity and innovation. British Telecom, at present is under operation in more than 170 countries at the global level catering to all continents. It may not be far to observe that the world’s first telecommunication company has become the topmost commercial organisation in the field of telecommunication which conducts its operations in every country. Suppliers Power: British Telecommunication operates on core networking and therefore may not face issues of bandwidth. They may face threats by the product manufacturers. New Entrants: British Telecommunication is at the mark where the new entrants may not be a threat. However, the regional telecommunication bodies may be a threat due to having their own infrastructures. Multinational corporations may have attraction towards operators that possess SEA-ME-WE cables; these multinational may require connectivity in areas where British Telecommunication may not be rendering its services (Telecommunications Industry Association, 2011). The elements of deregulation of telecom and open market issues can be unfavourable elements for British Telecom. Large amount of capital required by British Telecom would arise for setting business on these issues and this may cause British Telecom to reduce its local customers market. Product or Service Substitutes: British Telecom consists of a large portfolio of products and services and only VoIP has the potential to affect the sales of BT. It is quite possible to view the networking equipment manufacturer who supplies their products to BT for installing customer connections, may become direct suppliers to the customer. Long-term relationships with suppliers may come in use for BT at this point of time and in such a case. Customer Buying Power: British Telecom may not focus upon buying power due to the offering of standard packages. This may result in customers switching to other networks and telecom service providers. Competitive Rivalry: The competitors of British Telecom may focus on a certain product line. Competitive rivalry has chances to emancipate in this case. Competitive advantage of BT and product differentiation option may play its part in such a case. Conclusion and Recommendations The information technology is a big blessing for the business sector saving huge costs and offering many benefits. Few suggestions for the e-commerce organisations based on the model of BT are as follows. Make their website as user friendly as possible. Not all the visitors are computer savvy and many find it difficult to locate the correct type of service for their use. User guides should be present about the service, which will allow users to understand the service better. By operating business on the global level, it is obvious, that target market varies. It is, therefore, extremely important that information on the website presents itself in a manner that is comprehendible by all target groups and the standard of the company r maintains its image. List of References British Telecommunication (2011). The historical development of BT [online] available from < http://www.btplc.com/Thegroup/BTsHistory/History.htm > [22 Feb 2012] British Telecommunication (2011). Products and Services [online] available from < http://business.bt.com/products-and-services/ > [22 Feb 2012] British Telecommunication (2011). Customer Service Guarantee [online] available from < http://www.btplc.com/thegroup/Ourcompany/Companyprofile/A-Z/C/Customer.htm?Terms=122,743 > [22 Feb 2012] Burns, N. M., Daugherty, T. & Eastin, M. S. (2011). Digital Media and Advertising. UK: IGI Global. Hulsmann, M. and Pfeffermann, N. (2011). Strategies and Communications for Innovations: An Integrative Management View for Companies and Networks. USA: Springer. Information Commissioner’s Office (2009). Privacy Impact Assessment [online] available from < http://www.ico.gov.uk/for_organisations/data_protection/topic_guides/privacy_impact_assessment.aspx > [22 Feb 2012] Lambert, M. D. (2008). Supply Chain Management: Processes, Partnerships, Performance. USA: Supply Chain Management Institute Telecommunications Industry Association (2011). WTO Agreement on Basic Telecommunications Services [online] available from < http://www.tiaonline.org/gov_affairs/issues/trade/wto_agreement.cfm > [22 Feb 2012] Read More