IT Management help on: Challenges for adoption E Business

With the help of the upgradation in the technology, the organization would be able to work in the most effective as well as efficint manner. This would hlp in order to increase as well as enhance the business functions. The newer adopted technology would help the organization in order to have cheap, quick access to its customers all across the entire globe. Apart from all the benefits to the organization the various drawbacks or disadvantages attached to the same have been discussed below. They are as under:Þ    People: People for any given organization would mean serving its customers. But apart from them, there are employees wold refer to

People

• Standard businesses, for the most part, have always dealt with customers in-person. They also normally have several employees that they come into contact with on a day to day basis. An e-business can leave you working alone, with only your computer for company. If you are a “people-person,” having to spend your time away from others can be difficult in the long-run.

Time

• The same as other types of businesses, e-businesses take a significant amount of time to become successful. E-businesses have been hyped up to be instant at generating money; however, owners can’t be surprised if it takes a significant amount of time to become successful and profitable.

Sector Limits

• There are certain sectors that will be off limits to e-businesses for the most part. Many business sectors are dominated by physical businesses and show very little change. The most notable examples are grocery stores and other food and drink industries.

Internet TechnologyA new set of disadvantages come with an e-business. Most notably, these businesses must ensure that their website stays up and functional; this is the equivalent to a physical store staying open. If an Internet business goes offline due to technical issues, it can cost them profit; therefore, it’s essential to either have the technical skills or have someone in your company that possesses the technical skills to keep the company functional at all times.

Trust

• In many people’s minds, purchasing products over the Internet is still not as safe as purchasing products in stores. Since people cannot see the person on the other end of the computer, they might have issues purchasing products—depending upon your product and sector. Lacking consumer’s trust can significantly impact your sales and overall success.

Critical Success Factors:The Six Critical Success Factors of e-Business Strategy

Several authors of leading electronic commerce books have considered why organizations are compelled to pursue an e-business strategy and how to do so. For example:

• Walid Mougayar (1998b) describes eight “business catalysts” that are speeding up organizations’ reactions to the impact of the Internet.

• In the opening pages of e-Business: Roadmap for Success Ravi Kalakota and Marcia Robinson (1999) outline “the eight rules of e-business” that organizations must consider in developing their e-business strategy.

• Six “driving forces of electronic commerce” are briefly described in  Electronic Commerce: A Managerial Perspective by Turban, Lee, King and Chung (2000).

• In Enterprise E-Commerce Peter Fingar, Harsha Kumar and Tarun Sharma (2000) discuss 18 ways “how the Internet changes business”.

These sources, and others (e.g., Applegate and Gogan, 1995; Seybold, 1998) offer a number of trends, forces, drivers, principles and advice for organizations considering an e-business strategy. This paper takes a different perspective. The purpose of this paper is to identify six critical success factors for developing an e-business strategy (see Table 1). For this purpose, a critical success factor is defined as “a factor that is considered critical to the success of the e-business strategy. Successful performance in this area will assure the success of the strategy and the attainment of the organization’s goals”.

CSF1: Create a consumer-centric strategy.An e-business recognizes that power is shifting to the consumer. In the one-to-many hierarchical information flow that characterized the Industrial Age, information flowed one way, from the producer to the consumers. The Internet has changed this in three important ways. First the Internet allows consumers to talk to consumers. The Internet allows many-to-many c ommu n i c a t i o n   f l ows .   C o n s ume r   i n f o rma t i o n   s i t e s   s u c h   a s   T h e   C o n s ume r  D emo c r a c y (www.consumerdemocracy.com) “is for information on products: quality, praise, complaints, ratings, features, descriptions, reviews, comparisons, discussion, problem reports, information, statistics, rankings, prices, rip-offs, bargains and shady affairs”. eComplaints.com and planetfeedback.com offer similar forums and services.

Second, consumers can find and access information much easier than before. For the first time businesses must deal with a basic tenet of pure competition, a totally informed consumer. In a world where information is power, this can make sellers uncomfortable. Imagine the poor automobile salesperson who is greeted on the lot by a customer with a dealer invoice that shows the price the dealer paid for the car, easily available from automobile infomediaries such as Auto-by-Tel. These buyers won’t let dealers make big markups anymore.

Third, and most significantly, the Internet enables the information flow to be reversed so customer-centric companies can pull information from consumers to improve and customize products. Compare this with the product-centric company that pushes products to consumers. Companies that recognize this power shift to the customer will create a customer-centric strategy.

CSF 2: Embrace outsourcing to improve business performance.

For some time companies have outsourced secondary support functions such as payroll, network support and the company cafeteria. However, organizations have traditionally viewed core competencies (e.g., management, marketing, research and development) and primary support functions (e.g., distribution, manufacturing, human resources) as too important to outsource.

While core competencies remain resistant to outsourcing (appropriately so), inter-organizational information systems linked by the Internet are enabling companies to outsource primary support services.

Why? Reasons for the increasing use of outsourcing include:• Outsourcing reduces costs and improves services because a firm that specialises in the service and/or engages in bulk buying can achieve cost efficiencies and service delivery that the outsourcing organization cannot.

• Outsourcing enables a company to scale production up and down quickly and cheaply, thus being more responsive to the ever-changing marketplace.

• Intangible benefits from outsourcing include: a beneficial change in corporate culture, access to premium resources and expertise the company could not afford on its own and the ability to implement world-class capabilities and technologies.

• Most significantly for e-business, outsourcing enables an organization to create the virtual enterprise, a key organizational form (see mini case study below).

CSF 3: Act like a new entrant.

In the e-business marketplace new entrants have distinct advantages over existing businesses. Established companies tend to rely on simple formulas – lower costs, increase production, open new offices – to deal with impending change. These companies carry legacy systems, they refuse to cannibalize existing product lines and they don’t take risks that innovate the marketplace. New entrants don’t face these barriers and they are usually best at identifying where new value can be found in existing products and services (see case study below), Transformational thinking is required. Companies will need to act like new entrants, continuously creating fundamental change. Senior management must nurture a healthy discomfort with the status quo, develop the ability to detect trends earlier than the competition, make rapid decisions and be agile enough to create or adopt new business models.

CSF 4: Use information management to differentiate your product.The Information Age changes things. In 2020 Vision Davis and Davidson (1991) suggest that economic life cycles are similar to human life cycles, moving through gestation, growth, maturity and aging stages.

In 2000 the Information Age is in the first decade of the maturity stage. In this stage the patriarch of the Information Age – information – reigns supreme. The businesses that represent the “infostructure” of the Information Age – computers, telecommunications, network suppliers – are already well into the maturity stage. All other businesses – retail, media, financial services, government – are now following.

Information management will be a key definer of success in the Information Age. As Bill Gates (1999) argues: “The most meaningful way to differentiate your company from your competition … is to do an outstanding job with information. How you gather, manage, and use information will determine whether you win or lose.”

From now and into the future that we can plan for, value will be found in information-based products such as branding, customer relationships, supplier integration and the use of key information assets. Businesses must develop information-centric business strategies to participate in the Information Age economy. Information alone is not enough, information technology is required to innovate, entertain and enhance the entire experience surrounding the product, from selection and ordering to receiving and service.

CSF 5: Be a part of an e-business community.

An e-business community links businesses, customers and suppliers to create a unique business organization. These e-business communities form as part of business alliances, cooperative networks or outsourcing arrangements in forming or implementing the e-business strategy. The key to success in the new Internet world order lies in being able to share rich information, form dynamic partnerships and make deals in real time (Anonymous, 2000). At the extreme, sometimes the formation of an e-business community is the e-business strategy.

CSF6: Executive leadership is essential.

An e-business strategy doesn’t happen without the leadership and commitment of the senior executives of the e-business. This would seem to be obvious, but too often the strategy is vaguely defined by executive management and left to the information systems or marketing department to implement.

Technologists have the in-depth knowledge about specific technologies to meet the identified needs, but strategies come first and for this leadership at the top is required. “Senior executives who rely on IT managers to relate technology to overall business strategy do so at  their own peril. Executives [must] take responsibility for understanding the implications of up-and-coming technologies and anticipating when they’ll affect business strategy.”

Business Process Strategy:

Operations > Process Analysis

Process Analysis

An operation is composed of processes designed to add value by transforming inputs into useful outputs. Inputs may be materials, labor, energy, and capital equipment. Outputs may be a physical product (possibly used as an input to another process) or a service. Processes can have a significant impact on the performance of a business, and process improvement can improve a firm’s competitiveness.The first step to improving a process is to analyze it in order to understand the activities, their relationships, and the values of relevant metrics. Process analysis generally involves the following tasks:

• Define the process boundaries that mark the entry points of the process inputs and the exit points of the process outputs.
• Construct a process flow diagram that illustrates the various process activities and their interrelationships.
• Determine the capacity of each step in the process. Calculate other measures of interest.
• Identify the bottleneck, that is, the step having the lowest capacity.
• Evaluate further limitations in order to quantify the impact of the bottleneck.
• Use the analysis to make operating decisions and to improve the process.

Process Flow Diagram

The process boundaries are defined by the entry and exit points of inputs and outputs of the process.

Once the boundaries are defined, the process flow diagram (or process flowchart) is a valuable tool for understanding the process using graphic elements to represent tasks, flows, and storage. The following is a flow diagram for a simple process having three sequential activities:

Process Flow Diagram

The symbols in a process flow diagram are defined as follows:

• Rectangles: represent tasks
• Arrows: represent flows. Flows include the flow of material and the flow of information. The flow of information may include production orders and instructions. The information flow may take the form of a slip of paper that follows the material, or it may be routed separately, possibly ahead of the material in order to ready the equipment. Material flow usually is represented by a solid line and information flow by a dashed line.
• Inverted triangles: represent storage (inventory). Storage bins commonly are used to represent raw material inventory, work in process inventory, and finished goods inventory.
• Circles: represent storage of information (not shown in the above diagram).

In a process flow diagram, tasks drawn one after the other in series are performed sequentially. Tasks drawn in parallel are performed simultaneously.

In the above diagram, raw material is held in a storage bin at the beginning of the process. After the last task, the output also is stored in a storage bin.

When constructing a flow diagram, care should be taken to avoid pitfalls that might cause the flow diagram not to represent reality. For example, if the diagram is constructed using information obtained from employees, the employees may be reluctant to disclose rework loops and other potentially embarrassing aspects of the process. Similarly, if there are illogical aspects of the process flow, employees may tend to portray it as it should be and not as it is. Even if they portray the process as they perceive it, their perception may differ from the actual process. For example, they may leave out important activities that they deem to be insignificant.Process Performance Measures

Operations managers are interested in process aspects such as cost, quality, flexibility, and speed. Some of the process performance measures that communicate these aspects include:

• Process capacity – The capacity of the process is its maximum output rate, measured in units produced per unit of time. The capacity of a series of tasks is determined by the lowest capacity task in the string. The capacity of parallel strings of tasks is the sum of the capacities of the two strings, except for cases in which the two strings have different outputs that are combined. In such cases, the capacity of the two parallel strings of tasks is that of the lowest capacity parallel string.
• Capacity utilization – the percentage of the process capacity that actually is being used.
• Throughput rate (also known as flow rate ) – the average rate at which units flow past a specific point in the process. The maximum throughput rate is the process capacity.
• Flow time (also known as throughput time or lead time) – the average time that a unit requires to flow through the process from the entry point to the exit point. The flow time is the length of the longest path through the process. Flow time includes both processing time and any time the unit spends between steps.
• Cycle time – the time between successive units as they are output from the process. Cycle time for the process is equal to the inverse of the throughput rate. Cycle time can be thought of as the time required for a task to repeat itself. Each series task in a process must have a cycle time less than or equal to the cycle time for the process. Put another way, the cycle time of the process is equal to the longest task cycle time. The process is said to be in balance if the cycle times are equal for each activity in the process. Such balance rarely is achieved.
• Process time – the average time that a unit is worked on. Process time is flow time less idle time.
• Idle time – time when no activity is being performed, for example, when an activity is waiting for work to arrive from the previous activity. The term can be used to describe both machine idle time and worker idle time.
• Work In process – the amount of inventory in the process.
• Set-up time – the time required to prepare the equipment to perform an activity on a batch of units. Set-up time usually does not depend strongly on the batch size and therefore can be reduced on a per unit basis by increasing the batch size.
• Direct labor content – the amount of labor (in units of time) actually contained in the product. Excludes idle time when workers are not working directly on the product. Also excludes time spent maintaining machines, transporting materials, etc.
• Direct labor utilization – the fraction of labor capacity that actually is utilized as direct labor.

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