Unit 3 Blog Post- E Business Systems

Unit 3 Blog – E Business Systems

By

Lauren Camper

Benjamin Crump

Ryan Goodman

E-business systems are an integral component for many businesses today. Organizations strategically implement e-business systems to effectively compete in local and global business. E-business systems include the use of networks, information technology, and the internet in various aspects of the business, both inside and outside of the organization (O’Brien & Marakas, 2011). They have the potential to heighten operational efficiency and strategic positions for businesses but if implemented incorrectly, they can have the opposite effect.

 Intel, one of the world’s largest computing technology companies, implemented an e-business strategy in 1997 in an effort to remain competitive with businesses such as IBM, Texas Instruments, and Dell Computers (Phan, 2003). At the time, Intel had over $25 billion in annual sales and was a global organization (Phan, 2003). Their goal was to increase efficiency by automating its business to business processes. In order to gain competitive advantage, one of their goals was to create an online ordering system. This would enable customers to be able to order products from anywhere and at any time. Intel also created an extranet to support customers and business partners; that was made available only to those authorized individuals (Phan, 2003). From an internal perspective, the company implemented an online benefits application, information sharing, time and expense reporting and web based financial planning (Phan, 2003). 

Operating efficiency is a contributing factor to sustaining competitive advantage. Intel increased their operating efficiency by creating an online presence that allowed customers to be “in the know” about everything related to Intel from products to company news; all at the click of a mouse. They transitioned customers from being phone/fax based to being online based (Phan, 2003). Additionally, customers were now able to create profiles online thereby tailoring their online experience to meet their exact needs in terms of products and applications (Phan, 2003). Lastly, account managers were able to securely send confidential information to customers whereas they previously would have had to spend time hand delivering the information (Phan, 2003). The table below depicts the E-business applications implemented by Intel (Phan, 2003).

While E-business systems can help create operating efficiencies they can also create problems and challenges. With any technological implementation, organizations have to ensure that information is secure, complete, and accurate (O’Brien & Marakas, 2011). For instance, a retail business that implements a new transaction system will want to ensure that the transaction information is complete and all information is transferred to the sales system accurately. In terms of e-commerce, businesses will want to ensure their customer information is secure from being intercepted. Intel faced some of these challenges with the deployment of their new e-business system. For instance, customer transactions were secured by Secure Socket Layer (SSL) encryption (Phan, 2003). This was legal in the United States but not for encryption technology worldwide. Intel encouraged their global customers to use a third party encryption that was comparable to SSL to protect their information online (Phan, 2003). Additionally Intel was using, amongst others, Microsoft Windows Operating Systems. At the time, this system was heavily susceptible to hacking. To avoid security breaches, Intel conducted its e-commerce mainly on virtual private networks to reduce the security risks (Phan, 2003).

 

E-business systems are an important tool for businesses today. They enable companies to achieve a competitive advantage over other organizations by building efficiencies internally and externally. From an internal perspective, e-business systems provide potential for efficiency improvements when producing goods, sharing information, and communicating amongst employees. From an external perspective, they have the ability to increase customer satisfaction with efficiency improvements with transactions, faster shipping times, and the ability to view company information online. Adversely there are disadvantages to consider as well. Businesses must be aware of application security and continuously monitor the systems in place to ensure it is operating effectively. Overall, the implementation of e-business systems has the ability to truly enhance an organization in the local and global market place as long as they are researched and implemented appropriately.

  

Sources

Phan, Dien (2003). E-business development for competitive advantages: A case study. Retrieved from http://staffweb.hkbu.edu.hk/vwschow/Case-study.pdf

 

(2014) Intel Facts. Retrieved from http://www.intel.com/content/www/us/en/company-overview/company-facts.html

 

O’Brien, James, & Marakas, George M. (2011). Management Information Systems. McGraw-Hill Irwin. Pgs. 272-283

 

Unit 1 Blog - Retail Industry

Unit 1 Blog - Retail Industry

By

Lauren Camper

Benjamin Crump

Ryan Goodman

            The material covered in this unit provided an excellent overview and background of why MIS is important and how it pertains to competition in business. Many industries, such as the financial industry mentioned in the real word case, are heavily dependent on a small competitive edge that can be gained by top-notch information technology. The retail industry is a perfect example of an industry that is dominated by several large players who constantly duke it out for any small competitive advantage. At the present time, many retail businesses are competing for their share of the e-Commerce business. Consumers continue to migrate towards online shopping, as evidenced by Amazon's efforts to create and perfect the experience of online grocery shopping (“Amazon Expands Grocery Business”).  In particular we want to examine the barriers to commerce for a particular company, Ross Stores, Inc.

            Ross is one of the leaders in the off-price retail space, along with TJX companies (TJ MAXX, HomeGoods, etc.) (Yahoo! Finance). The main competitive force that they both face is the rivalry of competitors in the industry. Ross and TJX are the two largest players in the off-price retail space. TJX is much larger by store count and market capitalization than Ross, but Ross is steadily growing year over year. They make their living off of closeout merchandise from brand name manufacturers that Ross is able to sell at deeply discounted prices. At the present time, and for the near future, Ross is confined to brick and mortar locations. Unfortunately, TJX has won the race for e-Commerce against Ross. TJX has a functional website where consumers can purchase clothing and other items. The race to e-Commerce was a huge factor in their rivalry that Ross lost. On the other hand, Ross is still able to remain a large player due to their cost leadership strategy. Both of Ross' brands, Ross Dress for Less and dd's Discounts, offer lower average prices than TJX. Ross is content with that strategy for now, and there are many reasons for this, most significantly are the three main barriers to e-Commerce for off-price retailers:

• ·         A competitive, elegant, user-friendly e-Commerce environment/website

(TJMAXX.com)

• ·         Powerful security protection features to safeguard consumers' information
• ·         Dedicated warehousing space for e-Commerce sales for storing, picking, and shipping products that consumers order. This warehouse would have to be accompanied by a new software package specifically designed for e-Commerce warehousing to communicate with the web environment as well as the already-in-place warehouse management system for brick and mortar distribution.

            A competitive, elegant, and user-friendly website is essential to the success of any e-Commerce business. Unfortunately, this quality of website does not come cheap, nor does it appear out of thin air. IT must hire a web development team that can design and implement a website that adheres to a high level of standards regarding usability, not to mention security. As the U.S. has recently witnessed, hacking customer information at a large retail chain, Target, has resulted in a loss of consumer confidence and the loss of several key executives' jobs (“Millions of Target Customers…”). As this video below highlights, the CEO even lost his job over the breach (“Target CEO Loses Job After Security Breach”). Video - Target CEO Loses Job

            Finally, retailers must obtain a dedicated warehousing space for the e-Commerce merchandise. This warehouse would have to be equipped with material handling equipment specifically designed for e-Commerce warehouses. Additionally, a new software package would have to either be created or purchased that would be able to manage the inventory of the warehouse as well as communicate with all other existing warehousing software that the retailer has in place. Ross' IT department would certainly be tasked with handling this, but it would require a massive project to research currently available industry software, assess the viability of designing the software in house, developing a recommendation, presenting the recommendation to management, and implementing the designated course of action. All of that would require large amounts of time and money.

            One system that might be attractive to a retailer such as Ross looking to get into the e- Commerce space is a system called Magento. Magento is enterprise level e-Commerce software that could provide a number of features that are attractive to Ross for various reasons (Magento.com). Obviously, this is just one of many potential options that the IT department would explore and assess. IT would want to know several things: what does it cost, what features does it offer, how compatible is it with current warehouse management system, and how reliable is it (e.g. what other industry leaders use this software). Learning the answers to these questions would help IT assess the viability of the various software packages available.

            Ross has chosen to compete as a low cost leader rather than trying to match TJX step for step with e-Commerce. For the time being, this strategy has been successful. With the way the future is looking now, though, consumers' lust for "I want it now and don't want to leave my house" will likely overtake the brick and mortar low cost strategy at some point. For Ross, however, the benefit of their current strategy is that they don't have to devote significant IT resources to creating and maintaining all of the previously discussed requirements that come alongside an e-Commerce business such as the website and warehouse software. TJX is likely spending large sums of money on those items. As for the downside, there is a chance that Ross could get left behind with all of the other brick-and-mortar-only stores. All companies, large and small, should closely evaluate their long term competitive strategy and see how e-Commerce should or should not play a role in it.

References

"Amazon Expands Grocery Business."The Wall Street Journal. Dow Jones & Company, n.d. Web. 9 June 2014. <http://online.wsj.com/news/articles/SB10001424127887324798904578526820771744676>.

"Ecommerce Software & Ecommerce Platform Solutions." Magento. N.p., n.d. Web. 9 June 2014. <http://magento.com/>.

"Millions of Target customers' credit, debit card accounts may be hit by data breach - NBC News." NBC News. N.p., n.d. Web. 6 June 2014. <http://www.nbcnews.com/business/consumer/millions-target-customers-credit-debit-card-accounts-may-be-hit-f2D11775203>.

"Ross Store Photo." Ross Store Photo. N.p., n.d. Web. 8 June 2014. <http://media.progressivebusinessmedia.com/photo/341/341687-Ross_Store_photo.JPG>.

"Target CEO Loses Job After Security Breach." ABC News. ABC News Network, n.d. Web. 9 June 2014. <http://abcnews.go.com/Business/video/big-number-target-ceo-loses-job-security-breach-23588889>.

"T.J.Maxx - designer brands at T.J. prices™." T.J.Maxx. N.p., n.d. Web. 9 June 2014. <http://tjmaxx.tjx.com/store/index.jsp>.

"Yahoo Finance - Business Finance, Stock Market, Quotes, News." Yahoo Finance. N.p., n.d. Web. 8 June 2014. <http://finance.yahoo.com/>.