Trends in ebusiness and what they mean Kalakota

Trends in e-business. . and what they mean

Kalakota Page References: l Pages 33 -64

Five Trend categories…. l Customer l E-Service l Organizational l Employee l Enterprise Technology l General Technology

Customer Trends…… • Faster Service – time is money! – Slow customer service will result in customers taking their business to the competition – Organizations try to develop integrated systems for their business operations so that customer orders are met in a timely way.

Customer Trends (cont)…… • Self-Service: Empowering Customers – Customers want 24 x 7 x 365 access to businesses from their computer – Customers want to able to tailor products to their own needs – e. g. computers, travel services, share trading online – To take advantage of this trend, companies must integrate their functional IT systems (e. g. , HR, Marketing, sales etc. )

Customer Trends (cont)…… • More Product Choices – On-line product displays have unlimited shelf space – and more choices for customers. E. g. , Amazon. com – E-businesses can personalize the shopping experience of customers by analyzing past product searches

Customer Trends (cont)…… • Integrated Solutions – People want a single product that meets their needs – not separate products that may not work well together. – Examples: MS Office, Health/Travel/Legal Insurance,

E-Service Trends § Integrated Sales and Service: Customization and Integration § Average company loses half its customers every five years § It costs 5 -10 times as much to get a new customer than it does to keep an existing customer. § Companies must adapt to this trend buy integrating sales and service functions.

E-Service Trends (cont)…… § Consistent and reliable customer service § Customers do not like to be put on hold, or told that their problem is someone else’s business § Many business have outsourced parts of their business operations – who do customers contact in this case? § Companies need integrated customer service applications so that customers are directed to the right person who can solve

E-Service Trends (cont)…… § Flexible Fulfillment and Convenient Service Delivery § Customers are increasingly demanding home delivery of product purchases § Organizations must use integrated systems to make sure that the supply chain works effectively to fulfill customer orders.

E-Service Trends (cont)…… § Increased Process Visibility § Customers want to track the progress of their order delivery. E. g. , Fed. Ex and UPS provide this service § Customers increasingly want to know how a company is progressing with their purchase. E. g. , an application for a housing mortgage. § Companies strive to develop applications that reveal their internal processes to customers

Organizational Trends Outsourcing business functions – Many companies outsource key business functions to other companies that can do them better – Examples are IT departments, accounting, and administration – This means that companies can no longer think of their business as one entity

Organizational Trends (cont)… Contract Manufacturing – This happens when a company decides that parts of its manufacturing operations can be done by other businesses – Example: Sun Microsystems designs hardware and software and sub-contracts all of its workstation components – This trend lets companies do what they can do well

Organizational Trends (cont)… Virtual Distribution – Companies are being created that exist only to provide a place for buyers and sellers to do business on the web – Example: e-bay allows people/companies to buy or sell products and services

Employee Megatrends l Hiring the best and brightest l Some established companies find it difficult to attract skilled people l Skilled people increasingly prefer younger, more risky start-up companies that embrace technology l Companies must change their employment systems to attract the right people.

Employee Megatrends (cont)… l Keeping talented Employees l l Companies can no longer assume that they have employees for life Some incentives being adopted: Pay and bonuses tied to employee and company improvement l Employees who show potential should know that advancement is possible l Employees need autonomy l l Innovative work culture is the key to retaining people

Enterprise Technology Trends • Integrated Enterprise Applications – Businesses traditionally created separate units, e. g. accounting, finance, manufacturing, customer service etc. – These business units developed their own IT systems based on the belief that each specialization had different needs – This will not work in an e-business environment needs an integrated approach – Companies must invest in whole business IT systems to integrate all of their business functions

Enterprise Technology Trends (cont)… • Customers increasingly expect that they can access business services using a variety of methods, e. g. , walk into organization, phone, fax, email • Organizations must make sure that their service is consistent regardless of the media used

Enterprise Technology Trends (cont)… • The emergence of “Middleware” – This is a type of technology that allows older legacy systems to connect with newer systems – Examples: connecting mainframe based back end systems with internet applications

General Technology Trends • Wireless Web applications – More applications at higher speeds – Integrated devices – Wireless personal-area networks

General Technology Trends (cont) • Handheld Computing Devices – Increasingly people can access computer based applications using hand held devices – Implications for how businesses deliver their services as people have real time access to information on the move. E. g, better wireless networks, increased used of blue tooth etc

General Technology Trends (cont) • Integrated Voice, Data and Video – Need for high bandwidth communications – i. e. , optical networking as an organization’s backbone – Service implications – how do companies integrate voice, data and video communications seamlessly? – Where will the customer home contact point of the future be? Today it is still the telephone (in many cases) e-mail in other, but it may be something different in the future.

Application Service Providers (ASPs) • ASPs are companies that host and manage business applications on behalf of the client. – Examples: e-mail, groupware, ERP, CRM systems etc. – ASP’s will increase in number due to: • • • Scarcity of IT professionals Company desire to focus on core business activities Fast pace of technological change. – Companies may want to consider taking advantage of Asps if the skills and knowledge to support IT requirements are not available in house