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Teleworking: Implications for firms. Information Society Colin Hazley. Teleworking – a broad definition. Use of new ICTs to provide products and/or services: Call centres providing customer services to gen. public (Tax office)

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teleworking implications for firms

Teleworking: Implications for firms

Information Society

Colin Hazley

teleworking a broad definition
Teleworking – a broad definition
  • Use of new ICTs to provide products and/or services:
  • Call centres providing customer services to gen. public (Tax office)
  • Call centres providing customer support/services to public (insurance/travel)
  • Call centres providing customer support/services business-business (Esso)
  • Replacement of traditional brick & mortar services (banking)
  • Direct service channel between manuf and end users (Dell)
implications for firms ves
Implications for Firms: +ves
  • Greater networking - raise utility of existing capital stock
  • Lower entry barriers for electronic commerce (non-prop)
  • Greater efficiencies (reduced operating, inter-mediation, and procurement costs)
  • Reduced costs of storing, sharing, processing commun - info
  • Opportunity for new business strategies, new methods of orgn
  • Improved quality (convenience, customisation, reduced delays and increasing reliability)
  • Rapid generation, processing, sharing of customer information
  • Increased bargaining power of channels (more direct avenues)
implications for firms ves1
Implications for Firms: +ves
  • Increased number of competitors > tougher rivalry than before
  • Reduced profitability > shifting power to customers (info)
  • Internet technologies reduce variable costs by tipping cost structures towards fixed cost > increasing pressure to engage in destructive price competition
  • Internet reduces the importance of location (increasing geographic scope) > it is more difficult for on-line companies to differentiate themselves
  • > As number of competitors selling undifferentiated products increases, the basis for competition shifts more towards price
limitations with internet teleworking
Limitations with Internet = Teleworking?
  • Customers cannot physically examine or test products or get hands-on help
  • Knowledge transfer restricted to codified knowledge, sacrificing the judgement that skilled personnel can offer
  • Ability to learn from suppliers/customers is limited by lack of face-to-face contact
  • Lack of human contact with customer eliminates a powerful tool for encouraging purchases {trading off terms and conditions, providing advice and closing deals)
limitations with internet teleworking1
Limitations with Internet = teleworking?
  • Extra logistical costs are required to assemble, pack, and move small shipments
  • Companies are unable to take advantage of low-cost, non-transactional functions performed by sales forces, distribution channels and purchasing departments
  • Lack of physical facilities removes certain functions which reduces the ability to reinforce image
  • Attracting new customers is difficult given the sheer magnitude of available information and buying options
words of caution
Words of Caution!
  • Benefits of new IT are only realised if companies also adopt new operating methods, new organisational structures, and new business strategies
  • Investment in information technology works best when it goes hand-and-hand with organisational change
  • ‘The danger lies in using IT purely as a way of doing more cheaply the same old things the same old ways: processing information more cheaply in the same departments, or automating an otherwise unchanged production line.’ (Operational effectiveness)
  • Is this what Teleworking amounts to???