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Reynolds: E-Business: A Management Perspective Chapter 1: Introduction
Completing this Chapter will enable you to: Define the nature and explore the scope and economic and social impact of e-business technologies; Place the recent developments of e-business technologies into context; Review the different levels of adoption of and readiness for e-business worldwide; Understand the roles e-business technologies play for public and not for profit as well as for commercial sector organizations. Learning Outcomes
E-business: nature, scope & impact • Economic transformation through e-business • Doing new and better things • Doing things better • Social transformation through e-business • Scale, style and mechanism of communications • For individuals, groups and societies • Challenges • Identifying genuine opportunities • Wrong to assume benefits are inevitable • Process of understanding nature and consequences is complex • Fast moving developments with unpredictable consequences
The consequences of music digitalization • The creation of a new market for physical products; • The creation of new, information-based services such as Internet radio and other music search and download systems; • Changed consumer buying behaviour for music products overall, including declining purchases of conventional music products, the growth of new ways for artists to obtain direct access to consumers; and • Debate over ethical issues in relation to intellectual property rights and the extent of unauthorised downloading and sharing of content The global digital music market, 2005-08 Sources: www.ifpi.org, ITU, OECD. Note: * = trade sales ** - 2007 data
The nature & scope of e-business • E-commerce, e-business, e-government are elusive terms • Described activities continue to evolve • New definitions take time to ‘bed in’ • Fashionability of terminology • E-commerce was a term originally designed to describe electronic data interchange (EDI) • 3-fold classification developed in the mid 1990s: B2C, B2B and intra-organizational. • E-commerce became a ‘portmanteau’ word for doing business online, but also included marketing and servicing activities • E-business is a broader term suggesting a mix of additional pre- and post-sale activities, value chains, value networks and an overall focus upon the strategic, transformational potential of digital technologies for organizations and economies.
The history and development of e-business • “in five years’ time, there won’t be any Internet companies – they’ll all be Internet companies” (Grove, Intel) • Scope for disruptive innovation (Christensen) • Targeting customers who find existing value propositions too expensive or too complicated • Offering solutions which are ‘good enough’ at a lower price • Many dot.com ventures became ‘dot.toast’: greed and inexperience
Gartner hype cycle • Importance of distinguishing hyperbole from commercially useful technologies • Five stages to business maturity • Strengths: • useful graphical representation of an economic phenomenon; helpful reminder of technological determinism risks; opportunity to anticipate and influence future stages • Weaknesses • no clear criteria on inflection point timing, risk of being subjective (or deterministic and overly influential); does not directly rate vendor products Source: Gartner, 2009. http://www.gartner.com/it/page.jsp?id=1124212
Adoption of e-business • E-readiness is a relative rather than an absolute target; rankings not always helpful • Countries • EIU E-readiness rankings • Western Europe has fallen back in relation to Asian markets in recent years • Companies • Small vs large • Sector differences • Manufacturing vs service • B2B vs B2C • EC E-business ‘scorecard’
E-government • Best practice in e-government • Introducing services on a par with those in the commercial sector • Develop distinctive public sector competences • Four stages in developing effective e-government • Building the initial infrastructure • Putting government services online • Transforming structures and processes • Integrating and rationalizing the main service delivery channels • E.g. Government of Canada, Digital Britain
Long case 1.1: Canada • Canada topped e-government rankings for six years in a row • “defining approaches to act more like a single enterprise” • Tier one: online presence. • Tier two: electronic federal service delivery. • Tier three: seamless government. • Achievements • 130 online services; 100 funded projects; department/agency presence grouped by topic/target audience • E.g. Seniors Canada • Questions • Are there undesirable consequences that arise from the single ‘citizen-centric’ view of e-government? Is it driven more, for example, by the need to save money than for reasons of improving the customer experience of government? • In 2008, Ken Cochrane, Canada’s CIO and champion of the Canadian e-government initiative, retired. A replacement was appointed in April 2009. What will be the challenges she faces?
Long Case 1.2: Oxfam GB • Founded 1942; now with an income of £300mn • 35% donations • 26% trading sales • eBay presence • Online giving • Spontaneous (e.g. Asian tsunami) • Requires less effort for donors • But ‘in terms of fundraising we’ve got a long way to go. I think the sector as a whole is still too reticent’ (Institute of Fundraising) • about asking people to donate online. In this digital climate this needs to change.’ (Institute of Fundraising) • Questions • To what extent is Oxfam an ‘e-business’? • ‘More than ever charities have to deal with fragmented audiences who all demand different types of information at different times and through different media.’ How might Oxfam improve the effectiveness of its online presence and activities?