Trends in e-businessTrends in e-business

..and what they mean..and what they mean

Kalakota Page References:Kalakota Page References:

Pages 33-64Pages 33-64

Five Trend categories….Five Trend categories….

CustomerCustomerE-ServiceE-ServiceOrganizationalOrganizationalEmployeeEmployeeEnterprise TechnologyEnterprise TechnologyGeneral TechnologyGeneral Technology

Customer Trends……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)……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)……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)……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 TrendsE-Service Trends

Integrated Sales and Service: Integrated Sales and Service: Customization and IntegrationCustomization and Integration Average company loses half its customers Average company loses half its customers

every five yearsevery five years It costs 5-10 times as much to get a new It costs 5-10 times as much to get a new

customer than it does to keep an existing customer than it does to keep an existing customer.customer.

Companies must adapt to this trend buy Companies must adapt to this trend buy integrating sales and service functions.integrating sales and service functions.

E-Service Trends (cont)E-Service Trends (cont)…………

Consistent and reliable customer serviceConsistent and reliable customer service Customers do not like to be put on hold, or told Customers do not like to be put on hold, or told

that their problem is someone else’s businessthat their problem is someone else’s business Many business have outsourced parts of their Many business have outsourced parts of their

business operations – who do customers business operations – who do customers contact in this case? contact in this case?

Companies need integrated customer service Companies need integrated customer service applications so that customers are directed to applications so that customers are directed to the right person who can solve their problemthe right person who can solve their problem

E-Service Trends (cont)E-Service Trends (cont)…………

Flexible Fulfillment and Convenient Flexible Fulfillment and Convenient Service DeliveryService Delivery Customers are increasingly demanding Customers are increasingly demanding

home delivery of product purchaseshome delivery of product purchases Organizations must use integrated systems Organizations must use integrated systems

to make sure that the supply chain works to make sure that the supply chain works effectively to fulfill customer orders.effectively to fulfill customer orders.

E-Service Trends (cont)E-Service Trends (cont)…………

Increased Process VisibilityIncreased Process Visibility Customers want to track the progress of their Customers want to track the progress of their

order delivery. E.g., FedEx and UPS provide order delivery. E.g., FedEx and UPS provide this servicethis service

Customers increasingly want to know how a Customers increasingly want to know how a company is progressing with their purchase. company is progressing with their purchase. E.g., an application for a housing mortgage.E.g., an application for a housing mortgage.

Companies strive to develop applications that Companies strive to develop applications that reveal their internal processes to customersreveal their internal processes to customers

Organizational TrendsOrganizational Trends

Outsourcing business functionsOutsourcing business functions– Many companies outsource key business Many companies outsource key business

functions to other companies that can functions to other companies that can do them betterdo them better

– Examples are IT departments, Examples are IT departments, accounting, and administrationaccounting, and administration

– This means that companies can no This means that companies can no longer think of their business as one longer think of their business as one entityentity

Organizational Trends (cont)…Organizational Trends (cont)…Contract ManufacturingContract Manufacturing– This happens when a company decides that This happens when a company decides that

parts of its manufacturing operations can be parts of its manufacturing operations can be done by other businessesdone by other businesses

– Example: Sun Microsystems designs hardware Example: Sun Microsystems designs hardware and software and sub-contracts all of its and software and sub-contracts all of its workstation componentsworkstation components

– This trend lets companies do what they can do This trend lets companies do what they can do wellwell

Organizational Trends (cont)…Organizational Trends (cont)…

Virtual DistributionVirtual Distribution– Companies are being created that exist Companies are being created that exist

only to provide a place for buyers and only to provide a place for buyers and sellers to do business on the websellers to do business on the web

– Example: e-bay allows Example: e-bay allows people/companies to buy or sell people/companies to buy or sell products and servicesproducts and services

Employee MegatrendsEmployee Megatrends

Hiring the best and brightestHiring the best and brightestSome established companies find it difficult to Some established companies find it difficult to

attract skilled peopleattract skilled peopleSkilled people increasingly prefer younger, Skilled people increasingly prefer younger,

more risky start-up companies that embrace more risky start-up companies that embrace technologytechnology

Companies must change their employment Companies must change their employment systems to attract the right people. systems to attract the right people.

Employee Megatrends (cont)…Employee Megatrends (cont)…

Keeping talented EmployeesKeeping talented Employees Companies can no longer assume that they have Companies can no longer assume that they have

employees for lifeemployees for life Some incentives being adopted:Some incentives being adopted:

Pay and bonuses tied to employee and company Pay and bonuses tied to employee and company improvementimprovement

Employees who show potential should know that Employees who show potential should know that advancement is possibleadvancement is possible

Employees need autonomyEmployees need autonomy

Innovative work culture is the key to retaining peopleInnovative work culture is the key to retaining people

Enterprise Technology Enterprise Technology TrendsTrends

• 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 Enterprise Technology Trends (cont)… Trends (cont)…

• Customers increasingly expect that they can access business services using a variety of methods, e.g., walk into organization, phone, fax, e-mail

• Organizations must make sure that their service is consistent regardless of the media used

Enterprise Technology Enterprise Technology Trends (cont)…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 General Technology TrendsTrends

• Wireless Web applicationsWireless Web applications– More applications at higher speedsMore applications at higher speeds– Integrated devicesIntegrated devices– Wireless personal-area networksWireless personal-area networks

General Technology Trends General Technology Trends (cont)(cont)

• Handheld Computing DevicesHandheld Computing Devices– Increasingly people can access Increasingly people can access

computer based applications using hand computer based applications using hand held devicesheld devices

– Implications for how businesses deliver Implications for how businesses deliver their services as people have real time their services as people have real time access to information on the move. E.g, access to information on the move. E.g, better wireless networks, increased better wireless networks, increased used of blue tooth etcused of blue tooth etc

General Technology Trends General Technology Trends (cont)(cont)

• Integrated Voice, Data and VideoIntegrated Voice, Data and Video– Need for high bandwidth communications – Need for high bandwidth communications –

i.e., optical networking as an organization’s i.e., optical networking as an organization’s backbonebackbone

– Service implications – how do companies Service implications – how do companies integrate voice, data and video integrate voice, data and video communications seamlessly?communications seamlessly?

– Where will the customer home contact point Where will the customer home contact point of the future be? Today it is still the telephone of the future be? Today it is still the telephone (in many cases) e-mail in other, but it may be (in many cases) e-mail in other, but it may be something different in the future.something different in the future.

Application Service Application Service Providers (ASPs)Providers (ASPs)

• ASPs are companies that host and manage ASPs are companies that host and manage business applications on behalf of the client.business applications on behalf of the client.– Examples: e-mail, groupware, ERP, CRM systems Examples: e-mail, groupware, ERP, CRM systems

etc.etc.– ASP’s will increase in number due to:ASP’s will increase in number due to:

• Scarcity of IT professionalsScarcity of IT professionals• Company desire to focus on core business activitiesCompany desire to focus on core business activities• Fast pace of technological change.Fast pace of technological change.

– Companies may want to consider taking Companies may want to consider taking advantage of Asps if the skills and knowledge to advantage of Asps if the skills and knowledge to support IT requirements are not available in support IT requirements are not available in househouse

What these trends have in common

• Convenience

• Effectiveness

• Efficiency

• Integration

Journal Question

Select three e-Business trends and discuss

how they are affecting business

organizations in general in Qatar. Provide examples.