The evolution of technology has changed our lives. More importantly has changed the way we do business. Business strategies have been redefined to take advantage of the new and advanced technology. The discovery of the Internet has shifted the industry toward new and efficient ways to reach the consumers. The Internet has brought vision closer to reality and the future to the present. With the new communication tools such as email, availability of web browsers and the decrease in the price of PC’s. E-Commerce has become an attractive way of doing business. Retail stores have discovered a way to provide goods and services 24/7. Better yet they still keep their cost down. In the first section of this paper I will present a detail description of some of the important challenges that managers are faced with when managing e-commerce. In the second section of this paper I will look at managing e-commerce from the organizational management prospective. And finally section three will describe how e-commerce is important to the management of information technology.
Section I: The Challenges in Managing e-Commerce
E-Commerce, or Electronic Commerce, is a general term for any type of business or commercial transaction that involves the transfer of information across the Internet. This covers a range of different types of businesses such as amazon.com, eBay, priceline, etc. Electronic Commerce has expanded rapidly over the past six years and this growth as described in the following paragraph, is forecast to continue or even accelerate. It is likely that in the future the boundaries between conventional and electronic commerce will increasingly fade away as more and more businesses move parts of their operation onto the Internet.
The 1999 Christmas holiday season is known to be a major event in the e-commerce revolution. Online shopping approached 1 percent of holiday retail sales within the US for the first time. It has been projected that the number of US households accessing the Internet will increase from 28 millions to 43 million individuals by the year 2003. And the number of individuals accessing the Internet worldwide will increase from 81 million to 140 million during the same time period. And In the new millennium male users are no longer significantly predominated and people of age 40 and older had major presence. E-commerce applications are not limited to sales and support activities, but also include web sites for information. For example in year 2000-holiday period 45 percent used the Internet for gift ideas, 32 percent used the web to compare prices, while only 24 percent actually bought gifts online (Martin, Brown, DeHayes, Hoffer and Perkins 2002).
Types of e-commerce
One can distinguish the two types of commerce, where traditional or physical commerce is a transaction that takes place via contact between humans in a physical outlet such as a store. On the other hand the e-commerce is a digital transaction usually takes place over the Internet. According to the relationship between buyers and sellers, e-commerce can be categorized into four types as described below.
1- Business-to-consumer (B2C). This defines the relation between a business organization who is being the seller and the consumer who is the buyer. In this case the business drives the specifications of the products and the consumer chooses whether to buy or not.
2- Business-to-business (B2B). In this case both the buyers and the sellers are business organizations. In other words it is a supply chain management for example a virtual book store needs to order books from various publishers.
3- Consumer-to-consumer (C2C). This refers to the situation where both the sellers and the buyers are consumers. Online auctions provide an effective mean for supporting C2C e-commerce such as eBay.
4- Consumer to business (C2B). In this case the consumer specifies the requirements to the business, which provides a product that meets these requirements. In other words this is a consumer driven environment such as Priceline (Chan, Lee, Dillon and Chang 2001).
Managing e-commerce is no less than managing any other information technology functions. As a matter of fact it is more challenging to manage e-commerce, I believe there are more elements involved in being successful in managing e-commerce. Managers are faced with many challenging issues in managing e-commerce, in the next few paragraphs I will explore some of these issues, which I think are critical to the success in the e-commerce world
Designing the Web Page
A Home Page is the usual way in which a business or a person lets the world know they are there. Most Home Pages are written in a computer language known as HTML, or Hyper Text Markup Language, a protocol that most modern computers and navigation programs can read while they are connected to the Internet. HTML allows for graphics and color, as well as text, and can interface with GIF & JPG type pictures. Which means that you can also show pictures of your products, logos, and other graphics. Some specialized add-ons can also allow users to hear sound and watch moving video, when advertising your business.
Since the Home Page is a window that will present your business to the world, it is imperative to present your business in professional and attractive manner. The production of your Home Page should be done as carefully as you would when placing any advertisements to reflect your professional image. One of the biggest mistakes is to put a lot of graphics on your main page. The Internet can be slow at times, and there is nothing more frustrating to the consumer than logging onto a site, only to wait several minutes while 10 pictures with high graphics try to squeeze down the pipeline. I can promise it will be the last time I will log onto your site. The best way to approach the problem is to have a main page, with Hyperlinks to secondary pages. This way, the customer can download the main page quickly, make a selection from a menu, and go directly to the products or services they are interested in. The second issue is location, am I being seen everywhere? So getting your website listed on search engines is also critical, as when most people go looking for information, this is where they start. Also listings with other related, but non-competing businesses are another way to increase the number of visitors to your site. You will be expected to reciprocate of course, so you should make room on your home page for links to related sites. Which I think is great, because people may actually find your site as a result of searching for these links (Focazio 2001).
Keep it Simple
A common mistake is to attempt to develop a site that turns out to be too complex to ever be implemented. Often, well-intentioned projects never get off the ground due to unrealistic and convoluted plans. In many cases, the challenges created by new and unfamiliar technologies may be too great to overcome initially, and the new online store can be greatly delayed or abandoned altogether. To avoid over-engineering your online store, implement your website design through phases. Just like any other complex projects, they must be broken into smaller components that can be implemented through phases. So you can start designing your website by simply identifying the most basic goals of your online store and first implement those. When the basic system is in place, you can always add on all other elements. And remember your website just like any other business entity can grow with your business.
Choose your product
Not all products are very compatible to be sold over the Internet. There are some features unique to e-commerce and may not apply to certain products. For example, some products may require a lot of face-to-face selling. Usually customers are very cautious when buying expensive products online such as cars. Furthermore, some products may cost a lot to ship, since the primary practice in e-commerce is that customers buy products, and you ship the products to them. Also in this international market, since your product may be advertised to the world, how are you going to handle international orders? I believe all these issues must be addressed in a very professional and marketable way, so you are not driving your customers away (Sterne 2000).
Improve Security and Trust
The Internet is based on open network architecture; therefore information can be transferred freely and efficiently. This raises many security concerns among consumers such as, is it secure to transmit my credit cards information over the Internet, can someone change my payment amount in the process, is this a real company and what guarantees that I will receive the product. These are some of the questions many of us have when shopping online. An interesting point that comes to mind at this time, why aren’t consumers have the same concern with traditional commerce. I guess the major difference here is, when shopping at traditional stores you have somewhere to refer to in case of any future problems. Fortunately, by using modern cryptographic techniques, e-commerce transaction is very secure over the Internet; in fact it is more secure than commerce in the physical world. Security requirements can be categorized into three different aspects confidentiality, integrity, and authentications. Encryption is used to resolve the confidentiality issue, while integrity can be preserved through the use of digital signature, which will mark the message invalid if it has been altered in the transmission process. Finally, authentication is about verifying identities, which means the company identity will be verified before processing the transaction (Chan, Lee, Dillon and Chang 2001).
Creating Customer Confidence
The main difference between walking into a store to make a purchase and buying online is the element of human involvement. So how do we overcome this issue? I believe many people simply must know that if they have a problem with their online purchase, they will be able to contact a live person for help and possible cancellation of the order. Very few, if any, consumers are going to risk making a purchase if they think a problem with or questions about their order will only be handled by e-mail communication. For example I must have a phone number and be able to contact the business if needed, before making purchases online. Therefore in addition to listing your e-mail address on your website, include your company’s address, telephone and fax numbers. If a live person does not answer your telephone 24/7 then let people know which days and hours they can speak with a customer service representative. If your phone is answered by an answering machine or voice mail, then leave a message announcement that tells the caller when they can expect their call to be returned. Better yet having a toll-free telephone number listed on your website which is a relatively inexpensive way to raise the level of consumers’ confidence will send out a strong message that your company cares about hearing from its customers. If someone has the need to discuss a discrepancy with their purchase, they’ll likely be more patient, and inclined to listen to your point of view, if they are not paying for the call. Such strategy creates an excellent opportunity to assure the customers of your existence and legitimate business. Furthermore, establish some kind of customer satisfaction policy by offering a money-back, or a satisfaction guarantee, and display it clearly on your website. Otherwise list your terms of sale and your return policy and procedures on your website. Promptness is very important, let people know how long it takes to deliver their orders. Post methods of shipping you use, and how much you charge for shipping. Honesty, be sure to disclose any additional charges including sales tax, no hidden cost. Finally put yourself in the customer shoe and remember a happy customer is one more step toward success (Gutzman 2001).
How the Competition is doing
One of the most critical strategies in surviving in the business today is being able to compete. Which means organizations must be aware of what their competitions are doing and where they are going. So therefore you might want to gather competitive intelligence about one or more of your competitors. Competitive intelligence gives you hard facts when making decisions about marketing tactics, R&D investments, and product launches and overall business strategy. With today’s technology you can easily and effectively gather competitive intelligence by using legal and ethical sources of information. Such as buy a competitor’s product, hire their employees, visit their booth at trade shows and conferences, talk to their vendors, or use publicly available data. Public data sources include permit filings such as building permits, newspapers and magazines. Furthermore, other important sources of competitive intelligence information are company’s websites, online versions of publications, search sites, and monitoring services. For example, companies’ websites are one of the best sources of basic information about a company. If you don’t know the URL of a company’s website you can usually find it through one of the search engines. On a company’s website you usually find some general information about the company. It is commonly found through an “about” link off the home page. Also many companies have information about key executives on their website. Also there will be information about their products, services and pricing. Another example is online published surveys conducted by magazines and newspapers can be very helpful in seeing how the competition is doing (Mamel and Prahalad 1999).
Section II: E-Commerce and Organizational Management
In order to see how the challenges in e-commerce relate to organizational management, one needs to investigate the management role in general, and see how this role can be applied to resolve all issues with e-commerce. By examining the following questions we can clearly see the value of management. Can your group deliver on time quality product, sell higher value merchandise, impart knowledge more effectively, implement business processes and envision the future without you. Therefore the value of management is about utilizing resources efficiently and transforming business processes into actions. Clearly managements make things happen, so the success of e-commerce in an integral part of the success of the organization. All the challenges facing e-commerce described in section one can be overcome with good management style through the four different management elements as discussed below.
1- Plan; management starts with planning. Good management starts with good planning. Without a plan you will never succeed. In order to be able to succeed in managing the difficulties in e-commerce you must plan a head. Look at all the possible scenarios and plan for them. Figure out the worst possible scenario and plan for that too. Evaluate your different plans and develop what, in your best judgment, will work the best and what you will do if it doesn’t.
2- Organize; it is critical to be organized to be able to handle all aspects for running e-commerce successfully. Is your group prepared to do its part of the plan? Do you have the right technical people to deliver on your plan? Are the workers trained? Are they motivated? Do they have the equipment they need? Check back to make sure that everyone understands their role and the importance of their role to the overall success.
3- Motivate; e-commerce takes a lot of efforts and hours to design and implement. So are you ready to motivate people, to do whatever it takes to get the job done. Do you have backup plans and the necessary resources to deliver on time?
4- Control; now that you have everything moving, you have to keep an eye on things. Make sure everything is going according to plan. When it isn’t going according to plan, you need to step in and adjust the plan. Problems will arise for example someone will get sick, or someone will leave the organization. So do you have the proper documentation? Furthermore have you developed a contingency plan in the first place? You, as the manager, have to be always aware of what’s going on so you can make the adjustments required and met the deadlines.
Section III: E-Commerce and Management of Information Technology
Managing information technology resources in an organization can be broken into three different areas data, infrastructure, and applications portfolio. So managing e-commerce falls exactly under these areas. Let us look at these areas one at a time. Data, all e-commerce transactions are nothing but exchange of data whether collecting customer personal information, payments information, or customer orders. Therefore managing data becomes important as part of managing information technology resources. Infrastructure, all the communications tools used to make it possible for customers to reach organizations websites such as networks, web servers, gateways, switches, etc. are nothing but information technology resources. Finally, all applications used to implement e-commerce whether front end or back end are part of the applications portfolios which falls under information technology resources management.
Finally we have come to live in the digital world where the Internet has become an integral part of our lives. E-commerce is a new and a very challenging area to most business today. However it is imperative to succeed in e-commerce in order to compete in today’s e-world. I believe e-commerce requires a strong and dedicated management team. If management is the key role in the success of an organization, then the only way to overcome the challenges in the e-commerce world is through good organizational management.
1. Chan C., Lee R., Dillon T., Chang E. 2001, E-Commerce Fundamental and Applications, John Wiley & Sons, Ltd., Chichesler, NY, 3-13.
2. Focazio T.M. 2001, The e-Factor, AMACOM, NY City, NY, 146-158.
3. Gutzman D.A. 2001, The E-Commerce Arsenal, AMACOM, NY City, NY, 156-159.
4. Mamel G., Prahalad C.K. 1999, Computing for the Future, 177-184.
5. Martin E.W., Brown V.C., DeHayes W.D., Hoffer A.J., and Perkins C.W. 2002, Managing Information Technology, 4th ed., Pearson Education, Inc. Upper Saddle River, NJ, 237-238.
6. Sterne J. 2000, Customer Service on the Internet, 2nd ed, John Wiley & Sons, Ltd., Chichesler, NY, 27-32.
Challenges in managing technolgoy