Einstein Technologies

Email: info@einsteintech.net

Date: 22/10/2016

 

Dr Nikola Tesla

Ye Olde Steampunk Emporium

Email: info@yeoldese.net

 

Dear Madam,

I write this report as feedback for the assignment you commissioned regarding the strategies of bringing your business into the modern online business world. The report successfully analyzed the tasks required and drafted these findings as follows:

An outline of the information technology strategies necessary in gaining a competitive edge

Analysis of the best strategy in transforming the business from the current mail order regime to being an online presence

A detailed outline of the benefits of necessary software and hardware for solid enterprise architecture

An analysis of the advantages of having a customer relationship management system in place within the business

A study of the potential privacy issues in the transformation to an online business

Ultimately, the report will avail relevant recommendations and conclusions necessary for the successful implementation of the information technology systems desired.

On behalf of Einstein Technologies, I take the opportunity to thank you for granting us an opportunity to serve you in our area of expertise. Kindly feel free to raise any queries or information that you may need for better clarifications. It is our sincere hope that the report will be of immense benefits to your business and that it will aid ion the smooth transformation. Our company wishes you all the best in your endeavors to improve your company.

 

Yours Sincerely,

Mrs. Ada Lovelace,

Manager

 

Executive Summary

The report is a detailed analysis of the different ways in which Ye Olde Steampunk Emporium can successfully transform from the current mail order regime into a business that has an online presence. It is the result of intense analysis of different literature sources with actual examples based on current trends. Consequently, the report explores the necessary ingredients in building an ecommerce business. The report thus hopes to provide the management of the client company with the requisite information on the best transformation approach. The report covers five sections with a basis of understanding the holistic implementation process. The first section covers the best strategies in ensuring that the business maintains a competitive edge in the online space. Subsequently, the second section is an analysis of the different ways in which the business can transform into an online business effectively. The necessary information technology system infrastructure is covered on the fourth section through software and hardware. Next, the report explores the importance of having an effective customer relationship management system. Lastly, potential privacy issues in the world of online business are covered with a focus on the relevant threats. Ultimately, the report provides necessary and relevant recommendations as well as conclusions necessary for the successfully transformation of the business.

 

Introduction

Purpose and Authorization of the Report

The purpose of this report is the identification of the best strategies necessary in ensuring that Ye Olde Steampunk Emporium transforms from the current mail order business into an ecommerce venture. It focuses on the best strategies, the requisite architecture and the benefits of implementing different strategies in the transformation. In addition, the privacy issues anticipated in the process of transformation are a part of the report as well as the customer relationship management prospects.

Prior to the commencement of this report, the drafters sought authorization from authorization from the client company. In addition, local authorities as well as relevant institutions were consulted and provided useful information.

Scope of the Report

The scope of the report is well outlined as per the company requirements of transforming into an ecommerce venture. Specifically, issues that may clog the company in the process of implementation and actualization are given an in-depth analysis. Still, the different strategies necessary for the process of implementation are discussed in detail. A large part of the report delves into the subject of information technology architecture with a focus on the requisite hardware and software. The report is based on the reality that the current mail order regime is untenable in an ever changing world. Consequently, the burgeoning customer base calls for a change in the mode of business as well as investment in a customer relationship management strategy. Nonetheless, the report anticipates challenges in the transformation of the business into an ecommerce venture and specifically regarding privacy and security. It is important that any implementation be compliant with the Australian regulations to avoid conflict with eth administrative agencies. Ultimately, the scope of the report is guided by the specific company requirements and preferences.

Limitations

As with any other undertaking, this report faced a couple of limitations in its execution. One of the most challenging limitations was the fact that the report was an individual assignment thus stretching the limits of the drafter. It took a significantly large chunk of my time in finally compiling a comprehensive report. Also, the time allocated was quite limiting as the findings had to be reported within a very short duration. The time limitation resulted in a restriction in the number of companies that were researched. As thus, the report has fewer real-life examples of companies that have transformed into online businesses. In addition, some of the companies under study were not willing to provide all the information required for the study. In fact, some of these companies had a policy against the provision of sensitive information to competitors. In the end, the report had to rely on data found in the internet thus making it harder to complete the drafting of the report.

1. Information Technology Strategy

In transforming into an ecommerce venture, Ye Olde Steampunk Emporium is exposed to a variety of IT strategies necessary for its success. Certain tools including the Five Forces Model as well as the Three Generic Strategies will be used to critically explore the external and internal environments of the company. Eventually, the company should be built on stable strategies and follow the model of other companies such as Amazon and Netflix that did not start as pure technology businesses but adapted with time (Sanders, 2007, p. 177). Part of these strategies includes the optimization of pages through different tags presented by the current technology. In addition, the development of back links to boost traffic to the company’s website is very useful both in the short and long term.

Five Forces Model

The importance of the five forces model is largely based on the identification and analysis of the company’s strength in the competing world. The model identifies five competitive forces necessary in any business industry. The ideal strategy should focus on capitalizing on each of the five forces to come up with a strong business strategy. For instance, the bargaining power of suppliers can influence prices of supplies thus affecting the business. The company would be best suited it attains an edge over substituting suppliers by identifying as many as possible. The second power is identified to be the threat from substitute products. The management must keep tabs with other producers to ensure that they are not left behind in terms of price wars and sales. The third is the bargaining power associated with buyers and can only be tackled through provision of different products to serve the different market segments (Baltzan & Phillips, 2014). Fourth is the power occasioned by rivalry in the industry and can be best limited by creating loyalty among customers and increasing the value of the product. Last is the threat of new entrants in the market that should be offset through a study of the current market trends to curb gaps in the market.

Porter’s Generic Strategies

Although there are three strategies, it is advisable that companies and businesses only employ one of the strategies. In this case, the business should use the focus strategy to attain differentiation and improve its customer retention and loyalty. The generic strategies model is an important tool for any business entering a new market. The strategies include broad differentiation, focused strategy and broad cost leadership. While focused strategies are focused on a particular niche and bank on cost advantage, differentiation strategies aim to reach a larger market segment by offering unique attributes in the product. Lastly, the cost leadership strategy focuses on reduced cost of products.

Supply Chain Management

The strategy of supply business management provides for the efficient integration of different channel partners though a study of the demand and supply. The company should ensure compliance with the five stages of planning, package development, production and testing of the product, delivery and then feedback (Overby & Min, 2001, p. 402). The benefit of having this strategy lies on the information it avails to the management thus improving the process of sales forecasting. Still, the strategy can be used to tap into the benefit of increased connection with its suppliers thus fostering its external position.

Steps in SCM

The process of supply chain management has both downstream and upstream stages. The downstream stage is where finished products are distributed to the customers and their subsequent downstream customers. On the other hand, the upstream stage involves the flow of materials from the suppliers and their upstream suppliers at different levels of the chain.

2. E-Business and Mobile Business

Pinterest is the perfect example of the success of e-business in today’s modern world. By all standards, the process of improving and sustaining existing business practices is best done through e-business. The choice of e-business is a disruptive process as it relates to the exploitation of different avenues altogether (Parsons, 2002). For instance, businesses could opt for globalization as one among the many channels availed by e-business. Regardless of the channel that the company chooses, e-business is a concept that should not be missed.

Anticipated benefits and challenges

The prospects of e-business present numerous advantages to both the business and its partners. The use of internet connectivity in doing business is a sure way of reaching customers at a global level. Some of the techniques that the company can employ include the pay per click that works around the company paying for only those advertisements that are viewed. Another advantage is the global presence accorded to the company thereby resulting in the enhancement of traffic and eventually customers. In addition, the use of e-business can only mean well for the business in terms of reducing overhead costs associated with the physicality of the company (Baets, 1992, p. 208). The fact that the company operates on the web translates into less staff and less costs incurred during operations of mail order companies. Still, the company can reap from the competitive edge that comes with the online business over mail order companies. Although the concept is relatively old, some companies have not yet engaged the services of online business fully presenting an opportunity to outcompete these companies. The use of this concept is therefore in order as it gives the business the chance of opting from among the cost or differentiation strategy in the industry.

The advantages listed notwithstanding, the transformation into an e-commerce venture has its fair share of drawbacks. One of biggest challenges is the issue of costs and resources required to sustain the e-business. Particularly, the burgeoning costs incurred as initial capital presents a headache for most businesses. Some of these costs are used up in the process of laying done the necessary architecture as well as the training of personnel and payments made to consultants. Also, there is the challenge associated with issues of safety and security of the internet platform. Indeed, companies handling massive data and particularly data that are personal are faced with numerous privacy and security challenges. However, these challenges are easily overcome and should not prevent Ye Olde Steam punk Emporium from transforming into an online business.

Web 2.0

For the longest time, the concept of Web 2.0m has been used in revolutionizing the performance of companies across the globe. This concept is an important aspect in the company’s desire to transform into an e-business largely due to its characteristics. Content sharing through open sourcing is one of the characteristics of Business 2.0. In addition, the concept relies on masses to provide content for the masses other than restricting the process of production to a few companies. Thirdly, it is characterized by a collaborative mindset thus generating more information from a wider audience faster (Baltzan & Phillips, 2014). Lastly, the concept allows for collaboration outside the organization by challenging the traditional belief about the organization chart.

E-business models

The choice of an e-business model is solely dependent on the nature of the company’s business with the market providing many models. The nature of the company dictates that the business-to-consumer model is the most suitable since it allows the business to deal with its customers directly when it comes to sales. In this regard, therefore, the business should maintain and improve its website for such purposes. The importance of a business website is that it provides an online identity that customers can easily associate with the company. Ideally, the company should borrow a leaf from existing models to harness revenue from online sales and processing fees.

E-commerce tools

There is an almost infinite list of e-commerce tools that can be used in marketing products and connecting with customers. One of the areas of interest is the connection with suppliers in which case the company should toy with the idea of a merchandising and order fulfillment system. Normally, suppliers are lenient with supplying online stores and the establishment of such a system would link online retailers with suppliers. Also, the company should market their products to as many customers as is practically possible. This undertaking can be effected through such tools as ShopIntegrator in management of customer relations, business processes as well as predicting future sales. In addition, the business should focus on its handling of inventory and warehousing (Baltzan, 2012). There are numerous tools in this field including Fishbowl that are reliable in maintaining proper warehousing techniques. All these tools when integrated together provide a useful link between the business and its customers.

Success-measuring tools

Ultimately, the company will need to measure its success and effectiveness both in the short and long term durations. The biggest and most effective measure of online business success is in the number of customers that visit the website. Indeed, data on traffic is important in ascertaining the success of optimization and advertisements. Feedback from customers is also useful as it communicates about the company’s processes thus revealing information on areas of improvement (Laudon & Laudon, 2006). In analyzing the feedback, the company can use surveys, questionnaires and focus groups that could even be outsourced to another company. Eventually, data is then analyzed through different regression models to come up with important results.

M-business

Besides e-business, the online platform provides for the opportunity to use m-business in doing business. In the current sphere, the concept has benefits ranging from simple interactions to geolocation. Further, m-business provides instant access to networks while availing portability to the customers and thus improving business transactions (Tsai & Gururajan, 2007, p. 20). The small nature of the company makes it an ideal candidate as it does not require large capital. It is highly advisable that the company delve into the m-business platform to join the league of other companies such as Pinterest and Amazon. This concept is not without challenges, however, including security of the information shared as well as hidden costs associated with m-business.

3. Enterprise Architecture

The benefits of solid enterprise architecture are immense and varied depending on the nature of the business. Over time, the advantage of enterprise architecture have been cited to include guaranteed returns on investments on IT as well as better marketing of products. In addition, companies have benefitted from reduced business risks and cheaper procurement processes. Other benefits include flexible business operations coupled with efficiency in IT operations.

Steps in Maintaining Information Architecture

The laying down of the requisite enterprise architecture is not a haphazard process but one that should follow stipulated steps. As thus, Ye Olde Steampunk Emporium should base the process on the following steps:

1. Carrying out of a capability test to comply with the company’s capabilities and overall vision. This can be attained through the building of necessary competencies that are aligned with the activities intended in the business
2. The selection, refinement and clarification of a suitable e-business design. Some of the designs currently available include category killer and channel configuration that have gained significant success in the past. This process revolves around the identification of values that are in line with the digital capabilities of the company.
3. Outlining the market positioning to provide insights on the company’s strategy in competing for customers.
4. Finally, the company should decide on the best approach between the existing system and the development of a brand new system for use in the implementation.

Traits of a Solid Infrastructure Architecture

It is of paramount importance that the company considers the characteristics of solid infrastructure architecture prior to the acquisition of software and hardware. These traits include:

• Reliability/Availability – the infrastructure architecture should be available and reliable for use by the business. In addition, the infrastructure should be able to run for long periods of time without failure.
• Security – the architecture should maintain a level of security that can handle and resist unauthorized access. Still, the architecture should provide the required service to the legitimate users even in cases where it has faced potential breaches.
• Scalability – the architecture selected should be able to stretch its limit and perform excellently amid high demands of usage. In this regard, the system should withstand increased pressure without having to slow down to abnormal levels of speed.
• Portability – the infrastructure architecture should be able to run on different platforms at the same time without having difficulties in performance. In essence, the company should adopt a system that can allow for the migration of data to other systems whenever the need arises.
• Usability – the overall success of an infrastructure architecture is measured thorough its usability. The company should thus invest in one that is friendly to the end users in terms of learning, utilization and control of the system.
• Extensibility – the architecture should also be extensible in the fact that it should allow for customization of some points without having to alter the entire system.
• Maintainability – This has to do with the flexibility and testability of the architecture. The business could benefit from this characteristics since most business are bound to change with time and should therefore be flexible.

 

The Alternative of Cloud Computing

Cloud computing is another option that offers all the aspects in one basket. The concept of computing has evolved with time into a holistic concept supporting numerous businesses. The initial concept has the ability to combine the operating system and the software into one database that can be accessed from different devices. Later, the concept allowed users to connect to the web and access millions of sites. The current phase incorporates both data and software and is known as cloud computing. It has the potential of reducing costs as all applications are outsourced with an unlimited access to software and extra services.

Obviously, cloud computing has the potential of conferring immense benefits to the company. Such benefits include reduced cost as it would remove the need for software and hardware (Huth & Cebula, 2011, p. 53). Also, the reliance on outsourced architecture has the benefit of increased capability as well as reduced latency. The third benefit stems from an increase in built automation thus facilitating the efficiency of constructing partnerships in the virtual world. However, there are challenges in the use of cloud including privacy breaches as the data is stored outside the country. This feature is against the regulations that stipulate that data should be regulated nationally. Another challenge is stemming form the use of service level agreements especially where the business risk is relatively high.

4. Customer Relationship Management

The use of a customer relationship management system is highly important in maintain contact with the customers. One of the benefits of such a system is in the increased understanding of individual customer needs translating into business success. Further, the incorporation of CRM systems in the company would lead to increased efficiency in the support of customer needs. Through the systems, a company can design specific marketing approaches for different sets of customers based on their identified needs. Moreover, concentrating on individual customers will translate into more profit through increase customer loyalty and retention.

The process of marketing is highly dependent on a good customer relationship management system. This can be perfected through the collection of data belonging to individual customers and then using the same to improve interactions with the customers. Data on customer’s preferences as well as their age and gender can be used in designing custom advertisements. In this foregoing, the advertisements should be based on the products that individual customers are most likely to purchase (Baltzan & Phillips, 2014). The benefit of this type of marketing is that it presents the company with numerous growth opportunities through customer retention and sustenance.

In terms of sales, an excellent CRM system should aid a company in identifying goods that a customer purchases from the company. Based on the specific purchases of an individual customer, the system should identify relevant products that could interest the customer. The system can also be used to communicate with customers whenever new products are available or when an upgrade of an existing product has been done. Also, CRM systems are highly effective in bolstering customer service. The system should capture the information logged by a customer such as complaints and request action from the relevant department. The system can also be used to disseminate information to customers including messages on their birthdays.

Still, the use of CRM systems has applications in monitoring and tracking the business performance. The system can for instance capture the number of visitors in the site thus portraying the performance of marketing and advertisements. The analysis can be refined through an analysis of the individual products on the websites and the number of visitors they attract. In addition, customers may leave feedback and comments regarding certain aspects of the business such as customer service thus providing a useful metric.

5. Privacy

The online platform is riddled with numerous issue of privacy. Today, the internet is highly unsecure when great care is not taken by the respective companies. In view of the imminent privacy threats, the Australian government has legislations that regulate the handling of information by companies.

Relevant Australian Laws

The Privacy Amendment Act of 2012 is the parent law that regulates the handling of personal data. The legislation monitors the storage, collection, release and use of personal information through 13 Australian Privacy Principles. The Act, covering all companies operating in the country, bestows the OAIC with the power to monitor companies’ compliance with the regulations (Doyle & Bagaric, 2005, p. 72). The company should thus invest in highly efficient systems to avert the mishandling of personal information.

Commitment to privacy issues

The investment in IT systems is not enough to gain the confidence of the public and the government. The company should communicate its resolve to protect personal information by stating whether the data will be stored within or outside the country. The company should further communicate to the consumers’ o how their information will be handled through internal policies. This policy should be followed by a yearly review of the management of the customers’ personal data ad avail it to the relevant stakeholders. This practice is normal standard and is documented in Woolworths’ Customer Privacy Policy. Another example is Wesfarmers which reviews the management of customer information routinely.

International Privacy Issues

The fact the company will operate at a global scale renders it vulnerable to international privacy issues. The company should brace for different policies in the different countries of operation and should study the policies in advance.

Conclusion

It is very clear that a transformation into an online business is preferential for Ye Olde Steam punk. However, the success of this transformation is dependent on the effective implementation of different strategies discussed in the report. The company should also expect a lot of challenges that will require considerable attention. That notwithstanding, the benefits of the transformation outnumber the challenges and the profits will be witnessed in due time. The report has taken an in-depth analysis of the differ strategies pivotal to the success of the company including their challenges and benefits. Finally, issue to do with privacy at national and international level have also been explored.

Recommendations

This report recommends that the company adopts the strategies as they are discussed in the report. There are many ways in which the company can implement its transformation but these strategies have recommended based on the requirements of the company. In a nutshell, the company should take note of the following points:

1. The challenges faced in implementation can be offset by the imminent advantages of transforming into an ecommerce venture.
2. The implementation of the recommended strategies requires numerous resources.
3. Competition in the online business is high and is expected to increase due to minimum barriers of entry.
4. The company will handle a lot of personal information and should thus ensure security and privacy as stipulated in law.

 

References

Baltzan, P. and Phillips, A., 2014. Business driven information systems. McGraw-Hill/Irwin.

Baltzan, P., 2012. Business driven technology. McGraw-Hill/Irwin.

Huth, A. & Cebula, J., 2011. The Basics of Cloud Computing. United States Computer Emergency Readiness Team..

Doyle, C. & Bagaric, M., 2005. Privacy law in Australia. Sydney: Federation Press..

Laudon, J. P. & Laudon, K. C., 2006. Essentials of Business Information Systems.. Upper Saddle River, NJ: Prentice-Hall..

Parsons, B., 2002. Playing to win: Create an online presence for your business. The National Public Accountant, pp. 19-21.

Tsai, H. & Gururajan, R., 2007. Motivations and Challenges for M-Bussiness Tranformation: A Multiple-Case Study. Journal of Theoretical and Applied Electronic Commerce Research, 2(2), pp. 19-23.

Baets, W., 1992. Aligning information systems with business strategy. The Journal of Strategic Information Systems, 1(4), pp.205-213.

Sanders, N., 2007. “The Benefits of Using e-Business Technology: The Supplier Perspective.. Journal of Business Logistics, 28(2), pp. 177-VIII.

Overby, J. W. & Min, S., 2001. International supply chain management in an Internet environment.. International Marketing Review, 18(4), p. 392–420.

 

Appendix

Date	Activity	Reference	duration
27/09/2016	Information Technology Strategies Research on Porter’s Five Force Models and the relation to the company. Also, the three generic were studied and their relevance explored. I then studied the benefits of supply chain management as a strategy in online business. Lastly, I researched on the upstream and downstream steps of supply chain management.	Baltzan, P. and Phillips, A., 2014. Business driven information systems. McGraw-Hill/Irwin. Baets, W., 1992. Aligning information systems with business strategy. The Journal of Strategic Information Systems, 1(4), pp.205-213. Overby, J. W. & Min, S., 2001. International supply chain management in an Internet environment.. International Marketing Review, 18(4), p. 392–420.	5 days
3/10/2016	Moving from mail order to online business I researched on the benefits and challenges of being an e-business in relation to the company. I then studied the characteristics of Business 2.0 and its characteristics. In addition, the types of e-business models were studied as well as the tools necessary in measuring success. Lastly, the concept of m-business was researched to identify its relevance in the case study.	Sanders, N., 2007. “The Benefits of Using e-Business Technology: The Supplier Perspective.. Journal of Business Logistics, 28(2), pp. 177-VIII. Parsons, B., 2002. Playing to win: Create an online presence for your business. The National Public Accountant, pp. 19-21. Tsai, H. & Gururajan, R., 2007. Motivations and Challenges for M-Bussiness Tranformation: A Multiple-Case Study. Journal of Theoretical and Applied Electronic Commerce Research, 2(2), pp. 19-23.	4 days
7/10/2016	Solid enterprise architecture I studied the benefits of solid enterprise architecture and the steps necessary in maintaining information architecture. Later, the seven primary characteristics of infrastructure were analyzed in detail. Lastly, I covered the concept of cloud computing including the benefits and challenges.	Huth, A. & Cebula, J., 2011. The Basics of Cloud Computing. United States Computer Emergency Readiness Team.. Baltzan, P., 2012. Business driven technology. McGraw-Hill/Irwin. Baltzan, P. and Phillips, A., 2014. Business driven information systems. McGraw-Hill/Irwin.	5 days
12/10/2016	Customer relationship management The benefits of CRM were studied in relation to the success of online businesses. At first, I researched on the benefits of implementing CRM strategies. Later, I studied the different ways through which CRM systems can be used in marketing, sales and customer service.	Baltzan, P. and Phillips, A., 2014. Business driven information systems. McGraw-Hill/Irwin.	4 days
17/10/2016	Privacy issues I researched on the different privacy issues likely to clog the transformation into an online business. Specifically, the relevant regulations in Australia were analyzed as well as the potential issues in the global market. Further, I studied on the importance of communicating a company’s commitment to customer privacy	Doyle, C. & Bagaric, M., 2005. Privacy law in Australia. Sydney: Federation Press.. Baltzan, P. and Phillips, A., 2014. Business driven information systems. McGraw-Hill/Irwin.	3days

 

 

 

 

 
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