Slide 1

Information Technologyand E-Commerce

Increased Demands Placed on Managers(by IT)

Perform many of own clerical (support) tasks usinginformation technology.

Must build transformed organization because ITincreases competition.

Must adapt to many changes in IT, and help othersadapt to the changes.

Importance of innovation has increased.

IT facilitates globalization, creating more demandson manager.

The Wireless Environment IncludingWiFi

Managers use wireless communication to conductwork from remote locations.

Mobile phones and laptops are standard.

WiFi makes Internet more accessible.

Working in miniature mode is required, but quitenatural for young and old managers in presentenvironment.

Positive Consequences of InformationTechnology for Manager

1.Increased productivity and teamwork

2.Increased competitive advantage (or avoidingcompetitive disadvantage)

3.Enhanced business models (such as multipledistribution methods)

4.Improved customer service and supplierrelationships (for example, extranet.)

5.Enhanced communication and coordination,including the virtual office

Positive Consequences of InformationTechnology for Manager, continued

6.Quick access to vast information

7.Enhanced analysis of data and decision making(e.g., wiki gathers wide input)

8.Greater empowerment and flatter organizations(wider access to data)

9.Time saving through employee self-service

10. Monitoring of work and employee surveillance

The Negative Consequences ofInformation Technology

1.Wasting time on computer (including problem ofonline dependence)

2.Repetitive motion disorders

3.Deterioration of customer service (such as longvoicemail menus)

4.Dealing with baffled customers (some electronicdevices difficult to use)

5.Wired managerial workers (linked to the officemost of the time)

The Negative Consequences of InformationTechnology, continued

6.The encouragement of nonproductive multitasking(ability to concentrate may be impaired from usingtwo or more electronic devices at same time)

7.Excessive requirements to learn and adapt to newcommunication technologies at the same time(can be difficult to concentrate on regular work)

Impact of Internet on Customers andOther External Relationships

Outline of Topics

Marketing Side of E-Commerce

Social Media and Customer Relationships

Purchasing Side of E-Commerce

Changing of Intermediaries

Enhancement of Globalization

Integrating New and Old Economy

Living with Increased Visibility

Marketing Side of E-Commerce

Biggest impact is online sales.

75% of online sales are business to business (B2B)rather than by consumers.

Manager needs e-commerce knowledge.

Sales managers have few subordinates.

E-commerce products can decrease demand forother product or service.

Wide input possible via crowdsourcing.

The Social Media and CustomerRelationships

Major change has been to managing many customerrelationships via social media.

Managers must learn how to squeeze marketingadvantage from social media.

Social networking can help build connection tocompany’s brand.

Most essential component of online branding is thehuman touch.

Purchasing Side of E-Commerce

Enables companies to purchase more efficiently thanby traditional methods.

Companies encourage customers and suppliers toconduct business online.

Online purchasing may reduce transaction costs suchas discussions with sales representatives.

E-commerce has not eliminated human touch inbusiness.

Changing of Intermediaries

Decreased number of intermediaries between buyersand sellers, such as travel agents and supplycompanies.

Example is that MySpace members can sell theirmusic directly rather than through publishers.

Some new intermediaries have been created such asonline auctioneers and travel sites offering the bestbuys.

Enhancement of Globalization

Major factor is that e-mail facilitates communicationacross countries.

Development of telecommunication structures acrossthe world has facilitated globalization of business.

China now has more Internet users than the UnitedStates, although percentage of U.S. Internet users ismuch higher.

Integrating New Economy with OldEconomy

Major challenge is to integrate traditional way ofdoing business with e-business.

Referred to as “bricks versus clicks”

With first surge of e-business, traditional businesseswere considered obsolete.

Biggest beneficiaries of Internet revolution havebeen companies that integrated e-commerce intomarketing and operations.

Living with Increased Visibility

Like or dislike of organization is rapidly disseminatedover the Internet, especially social media Websitesand YouTube.

Several Websites exist for consumers to voice theircomplaints.

Company employees sometimes post negativecomments about employer.

Managers must create fans, deal openly with issuesthat might create dislike.

Effects of Internet on Internal CompanyOperations

Outline of Topics

More Effective Work Processes

Squeeze on Profits and Pressures Toward CostControl

Data Mining

Cloud Computing

More Effective Work Processes

Internet has changed methods of distributinggoods, internal collaboration, and dealing withsuppliers, such as:

a.Ordering and production of PCs (see Exhibit 14-3,text)

b.Streamlining work at a winemaker with eliminationof much low-value work and concentration onwork that adds value for customer.

Squeeze on Profits and PressuresToward Cost Control

Information flow of Internet has tipped balance ofpower from sellers to buyers.

Industrial buyers and consumers can use Web to findout about costs putting them on same level asprofessionals.

Sellers must offer products with lower profit marginsthan in past.

Lower prices leads to more cost control.

Data Mining

Linked to Internet because of databases accessed onInternet.

Data mining extracts useful analysis from mass ofbusiness transactions.

Insurance companies use data mining to help priceauto policies.

Data mining provides automated (a) prediction oftrends and behavior, (b) discovery of previouslyunknown patterns.

Cloud Computing

Refers to moving data and software from computerhard drive to Internet storage.

Also refers to interconnected machines that replacecompany desktops.

External organization takes over vital computer andIT activities.

Manager must have confidence in external IToperations to use cloud computing.

Success Factors in E-Commerce

1.Develop an excellent call center to allow for thehuman touch.

2.Keep customers informed about their orderprogress.

3.Constantly monitor and update the e-businesssystem (ease of completing transactions).

4.Mix bricks and clicks (customers can purchasemultiple ways).

Success Factors in E-Commerce, continued

5.Develop a global presence (e.g., obtain a localdomain name).

6.Protect customers against fraud (rampant problemon the Internet).

Conclusion to chapter: Internet revolution isfabulous but traditional forms of business andpersonal contacts still dominate high-levelbusiness.