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The concept of Enterprise 2.0 is new and emerges with social media in the corporate world. In this case, McAfee (2009) gives insight into the importance of building social ties in a modern organization. To explain the concept and its importance to organizations, this section focuses on literature presented by Wade and Hulland (2004) on Resource Based View of a Firm (RBVF) to elaborate how social media are presented as both a resource and a capability.
Resource Based View of a Firm (RBVF) is a concept that is used to review an organization’s chances for success by gaining or acquiring competitive advantage. Competitive advantage is when an organization has more resources than other organizations, which gives the organization better chances to be ahead of the competition. In this case, competitive advantage is the resources that allow an organization to beat the competition or have resources that are different from those that other organizations use and apply. Strategies and managerial decisions focus on addressing areas that limit the level of imitation, transfer, and or substitution of resources. The creation of the competitive advantage can be classified as a capability of a firm under the concept of RBVF to find a unique feature that could be considered a resource.
Considering social media and the requirement of organizations to create or build social ties, this requirement is a strategy, which in theory is a resource. Customers need to be educated about products, employees need to be acknowledged in terms of informational channels, and management needs to understand the market response to the services and products that the organization puts to the market. Education of customers, provision of information for employees, and review of the customer response by the management can be done through the media and social networks. The importance of social ties lies in keeping an organization close to customers in terms of service delivery requirements and response to new products. Resources in this case would be the availability of social media and ready audience, provision of knowledge for employees, and market review by managers. On the other hand, the use of social ties would create capabilities of providing up-to-date services and products, learning about competitors, and creating a competitive advantage in the short-run and in the long-run.
The cult of innovation by Google has enabled it to create competitive advantage over other organizations. This has been reviewed by Iyer and Davenport (2008). In this section, the aspects identified and explained by Iyer and Davenport will be discussed under the perspective of Porter’s 5 Forces Model to explain Google’s strategic move. This will also allow for the discussion of Google’s resources and capabilities under RBVF.
Google is mostly recognized through its popular search engine; however, the architecture of its engine is the tool behind the fame. Through innovation, Google is able to provide or return results in its search engine by the use of algorithms to calculate relevance of results to the search strings. Besides, the capability mentioned above has been created as a result of innovation in terms of programming. However, the aspects discussed by Iyer and Davenport include the collaboration between content providers, advertisers, innovators, and consumers to create competitive advantage through various platforms. These platforms are not capabilities or resources in terms of how they are wired or integrated into Google’s strategies; instead, they fall under the resources as well as capabilities through their influence on Google’s success and ability to keep them inimitable.
Google’s use of PageRank algorithm to calculate and provide consumers and organization with a reliable search engine is a resource that can be owed to various developers at the Google premises. However, the fact that services of search and e-mail are free provides a capability for Google to attract new market entrants to advertise, keep substitute products at bay, retain customers, and develop a strong business and organizational relationship with its suppliers. With regard to the competition, Google has implemented systems and strategies over time and has invested a lot of money into services like Google Calendar for corporate business class and organizations; Google chat for both young people and older people who have their own businesses; YouTube for everyone to use as an online cloud computing for videos; Gmail for e-mail services; and many others. These services can be categorized as the resources that Google has been able to achieve through the innovative programming and implementation of inimitable organizational mechanisms.
Firms can be focused on from within; this is achieved through the application of Porter’s generic strategies and the 5 Forces Model. The same focus can be adopted from a broader industry perspective hence drawing differences between the generic strategies and the 5 Forces model; this section highlights and explains these differences; it also gives some recommendations.
The generic strategies seek to isolate an organization or a firm from the rest of the organization in terms of cutting or reducing cost in both the industry wide and niche segment competitive scope. In this case, an industry in the broad market category seeks to lead through cost effective means in a manner that attracts its customers. Cost leadership is an instalment that a firm opts to adapt in order to operate effectively in the broad market; this is to beat a broad range of industries that compete for the same market size. On the other hand, the narrow market is used and applied through cost focus; this is done through a segmented scope for some markets. A certain number or segment of customers is isolated from the rest and offered prices that retain them. While dealing with the broad and narrow markets, the cost and price advantages are important sources of competitive advantage. To acquire these advantages, such firms as Toyota, Amazon, Wal-Mart, Apple iTunes, and Google search thrive to attain operational effectiveness over other firms. They do the same things as other organizations differently or they do different things, therefore, delivering a unique value to customers.
Unlike the generic strategies, the 5 Forces Model focuses on the elements that affect a firm. The sustainability of a firm depends on how other firms treat new market entrants, substitute products, suppliers, customers, and how it survives in the competition. In this case, the major difference between the generic strategies and the 5 Forces Model is that the former focus on customers by delivering advantages and prices that would be appreciated by customers. On the other hand, the 5 Forces model concentrates entirely on the external focus that affects the firm and shows how to lead the firm’s activities towards its benefit. Considering that a service like Google Search stands out from services like Yahoo Search, the 5 Forces model focuses on the delivery of different and unique type of value to the customer by concentrating on the competition rather than the customer. As a recommendation, the use of any of the approaches is effective given that a firm has done enough research to establish which of the two works better; this is to reduce the cost of implementation to deal with competition effectively. The fact that one approach works does not mean that the other does not; hence, the requirement or necessity for a firm is to investigate which of the approaches can guarantee the best results.
Resources, capabilities, core capabilities, dynamic capabilities, and learning are some of the main concepts that RBVF focuses on. In this section, these concepts are summarized in accordance to competitive advantage and business strategies.
A resource is referred to as anything that a firm has at its disposal and can use to beat the competition or survive in the market. The resources that are available to the firm include physical, human, and organizational ones. The physical resources include physical structures that an organization has in terms of buildings, technology, machinery, and other physical elements that contribute to the achievement of a firm’s objectives. On the other hand, the human resources are vested in the human side of the firm; this includes the employee’s ability competencies and skills in one area of production and service delivery or another. The organizational resources are a result of the physical and the human resources combined; some of these include brands like Google Maps by Google and reputation like Apple iTunes’ fame for delivering quality and unsurpassed service to its customers (Jarvenpaa and Leidner, 1998, p. 344).
Capabilities are the ability to apply or deploy resources in the right areas so that a firm could fulfil its duties and obligations effectively. Capabilities are results of managerial efforts or much complex activity. The aim of capabilities or the use of their application is to deliver a distinctive organizational performance. This is drawn from the firm’s ability to perform and to do various and inimitable things. Core capabilities can be classified under the same category as capabilities; however, they display strategic potential that differs a firm from other competitive firms. Strategic potential affects the realization of competitive advantage; this is attained when the capability has no strategically equivalent substitutes, when it is imperfectly inimitable, valuable, and rare (Ciborra and Andreu, 1998).
Dynamic capabilities are applied in unstable environments to focus on how resources are integrated with the organization as well as how best they are deployed. Capabilities can be eroded or done away with in rapidly changing environments. This is the case when the capabilities are not flexible enough to cope with the changing environments. An environment in the firm’s context is the area and margin within which a firm operates, acquires market share, deals with challenges, and faces competition with other organizations. In a dynamic environment, learned capabilities have the potential to become adaptive to new needs; in this case, the capability of learning is required to create or build capabilities. Through this, the building of capabilities should be integrated into the firm’s strategic platform and should mean that capabilities that do not apply anymore have to be dealt away with (Wade and Hulland, 2004, p. 131).
Resources can become competitive advantage through organizational learning. A resource like ICT can be used in the work practices and then transformed into generic capabilities of the firm. In the long run, the generic capabilities are embodied in the business under the relevance of the competitive environment. The above phases are classified as learning loops, and they are divided into three loops respectively. They include the routinization loop, the capability learning loop, and the strategic loop.
Enterprise 2.0 and Web 2.0 concepts have emerged with the recent technological boom that has fostered changes in the way people and organizations do business. In this section, the Enterprise 2.0 concept is discussed as well as the technological contributions offered by Web 2.0.
Enterprise 2.0 is a concept that has emerged and that people and organizations have adopted in order to push their businesses a step further. As easy as the concept sounds, its implementation requires investment in technologies that work towards organizational change. Change in the organizational structure is initially propagated by decisions made by the management and strategies implemented by the executive. In this case, technology is acquired and implemented in the organizational structure as a means of collaborative decisions and strategies aimed at successful operations. The Enterprise 2.0 concept relies on the use of available technologies to expand the margin of reach to organizations’ customers. The technologies that are presented by Web 2.0 include cloud computing, PageRank algorithms, and creation of social media software. The enterprise 2.0 concept relies on the use of Web 2.0 tools in the organizational setting to apply the technologies that bring customers closer to the organization.
Fostering of social ties in organizations has enabled them to create a connection between their internal affairs and the needs of the clients. The social software applied in Enterprise 2.0 integrates the firm with outside people who include customers and internal people in the likes of employees and managers. The use and role of social media is to broaden the margin of reach and create relationships between firms and their customers. Social ties are built through the creation of an interface that establishes relationships between organizations and their customers. Customers in this setting can try the products and services offered by the organization and provide their feedback. In their turn, organizations respond to their customers’ feedback and therefore thrive to satisfy them by either implementing the generic strategies or drafting newer and better mechanisms. The Web 2.0 technologies influence organizations by providing the opportunity to integrate their social platforms. These technologies give organizations the chance to implement management tools that address the real time issues. These technologies design and present an easy platform for organizations to keep in touch with their audiences and customers in a more than formal way of orders and deliveries. Due to the fact that organizations cannot predict what their customers require, they have the option of connecting with them in order to create a social bond, learn from them, and help them make the right decisions in respect to the changing business environments.
There are issues and obstacles that are in the way of the implementation of the Web 2.0 technologies in organizations, despite the fact that organizations and firms have benefited from these technologies. The following section discusses this proposition and gives recommendations on how the problems identified can be solved.
Web 2.0 technologies have benefited organizations through the provision of platforms that fetch and analyse data and presentation of information. However, due to the fact that information is a vital requirement in the organizations, it has been hard for these organizations to regulate the type of information they receive in their databases because of the numerous channels that provide information. Information overload is a challenge or an issue that many organizations have faced despite the use of Web 2.0 technologies. The reason behind this is that many organizations have implemented strategies and technologies that fish for information from various databases and in real time. The information sources include customers through the Enterprise 2.0 concept, research by managers and employees, and data collecting tools from the technologies implemented. Information overload happens when newer information keeps on piling up without being used or offloaded. To an organizational database, information causes data traffic and may jam serves. To management and employees, information overload can happen if information is not used or even reviewed due to lack of time or skill to do so effectively. In the long run, in either case, information becomes a burden upon employees and the organization as a whole.
The issue of privacy and security has been a concern for organizations for a long time. This is because the vital information that can be used against them by competitors can be accessed by the wrong parties, hence putting an organization in jeopardy. Considering the fact that entities with necessary skills and tools can access databases and bypass security protocols, protection of information is a major problem for organizations. In the modern world, the better the security modules applied by organizations are, the better the technology gets to enable hackers to bypass security.
In regards to personnel who can access information, many people involved in the activities of an organization can be excluded from access to vital information. The vitality of information depends on its urgency, how it is classified, and its relevancy. Classified information should be accessed by a certain group of authorized people while urgent and relevant information should be accessed by parties that require the information and those that can take fast actions respectively. Information sources are different, and certain parties may not be able to access them. This phenomenon is referred to as digital exclusion. Individuals without necessary skills to access information and individuals with the potential but who have not been given the chance to access information fall under two categories, namely, digital divide and digital exclusion.
Recommendations on how to solve the problems identified above would require shifting from data outsourcing to data fishing. Information on the Internet and other sources can be relevant and irrelevant. For organizations to do away with information overload, a system change that will allow selecting only information that is vital within a particular time would be relevant and cost effective. On the issue of privacy and security, an organization cannot predict the tactics a hacker would use to strike or the means through which information will be lost to other parties. For this reason, information can be lost or accessed by wrong individuals through a number of gateways. In order to ensure that such things do not happen, an organization has the option of safeguarding its information sources and databases by installing firewalls. Loose ends like ports and cables should be safeguarded by either deactivating them or rendering pass codes to databases.
The technologies of Web 2.0 and those of Enterprise 2.0 are related to the diffusion of knowledge. The concepts of tacit and explicit knowledge help in the understanding of the reason behind the diffusion of Web 2.0 technologies in corporations. This explains how the concept of tacit or explicit knowledge helps in the understanding of Web 2.0 technologies in corporations.
Explicit knowledge is a concept that defines the source of knowledge and how individuals carry out activities depending on the source of their knowledge. Knowledge can be acquired by learning or through experience; to apply such knowledge while carrying out some activities, it is necessary to follow some formula. On the other hand, tacit knowledge happens to be integrated into the system of an individual and one may not be able to explain how they could pull off some activities. In theory, we know that the diffusion of technology in an organization is to capture opportunities and drive the organization to success. In practice, some technologies are not applied so that they cannot boost production but can protect a certain area from falling apart. In this case, the explicit knowledge allows employees and managers to deal with the situation from a tactical perspective. On the other hand, the tacit knowledge allows individuals like managers and employees to predict how some customers should be handled to limit the window of chaos or dissatisfaction.
The concepts of explicit and tacit knowledge open up the opportunity for us to understand the need to diffuse Web 2.0 and Enterprise 2.0 technologies. The enterprise approach enables organizations to learn about customers through the responses they give with regard to any packages that an organization offers. In this case, the application of Enterprise 2.0 is much tacit than explicit because organization has several channels through which they can interact with their clients, but they still require to build social ties with their clients. The use of explicit knowledge is to determine the type of technologies that need to be diffused in any particular scenario. The use of Web 2.0 and Enterprise 2.0 technologies is to establish a connection between organizations and customers. Organizations use their explicit knowledge to introduce strategies that work for customers, while employees can predetermine how to deal with customers in regards to the tacit knowledge drawn from social ties.
In contemporary society, the generation of wealth has heavily depended on knowledge relevance; this section explains the reason behind this.
Knowledge is the amount of knowhow an individual or a group of people have and the influence it brings to an organization. Concepts of tacit knowledge and explicit knowledge can be furthered through various mechanisms that connect individuals together and individuals to a group of other individuals. These groups provide a mechanism that fosters growth of an organization by creating a new level of potential. In the context of this section, people’s knowledge may differ in one way or another. For organizations, these differences give rise to a variety of opportunities and various objectives. Knowledge creates the platform for the implementation mechanisms and strategies that regulate the operations of one organization better than any other does. Through the application of various strategic mechanisms, organizations like Apple Inc. and Samsung are separated from each other by the digits in profits, despite the fact that they engage in a similar type of business.
The application of knowledge in contemporary society with the purpose of generating wealth is a strategy that organizations and investors apply in order to enter the markets with full information concerning areas of special concern and areas of weaknesses. An organization is not defined by its logo; neither is it defined by its brand or products. Knowledge about the markets and the emphasis it places to address issues related to the competition makes organization thrive. Considering that an organization is as good as some other organization, the market share cannot be allowed to be the same. This is because the opportunities will be the same, decisions will be the same, and strategic decisions will be the same too. In cases like these, an organization will not be making the best out the market, and such a case would mean a merger is necessary.
In terms of the creation of opportunities, small organizations thrive by seizing economies of scale. Without knowledge of how to implement processes and strategies, such organizations may not be able to expand their reach for customers. The importance of knowledge is the ability to make decisions in accordance to available opportunities and challenges. The more knowledge an organization has at its disposal, the better the formulation of decisions as well as the seizing of opportunities are. The organizational structure allows decision makers to implement decisions that they can consider risky. Some risks are worth taking while others are not. The difference between these risks can be established through the application of knowledge.
The graph below explains the creation and diffusion of knowledge. This section explains the models of knowledge creation and diffusion in accordance to the graph presented below.
A big number of people cannot explain how they are able to handle some issues and complete some tasks. People acquire or develop tacit knowledge, and they are able to undertake some activities without actually applying much thought to the process of completing these activities. In this case, individuals with tacit knowledge interact with each other as marked by letter ‘i’ in the graph above. An individual develops knowledge through interaction with another person. In this case, there is non-stop transfer of knowledge, and individuals start to make sense of how activities are performed. The fact that everyone can read a book does not mean that all people read the book the same way. An organization like Apple Inc. hires and employs developers with vast knowledge in the field of programming. Writing a code or developing an application follows a basic routine or pattern to get it done. However, developers employ a great variety of tactics to get the code and the application working. Through interaction and socializing, some of the developers who take shortcuts and get things done may start to make sense of the phenomenon. This is the moment when point ‘i’ and ’i’ meet to socialize and transfer knowledge. The knowledge transfer for the socialization chamber in the graph provided above may be of the same type, which is tacit, but has the potential of transferring different aspects of the same item or activity.
When more than two individuals meet during the socialization stage, they form an externalization chamber and they become a group. Different perspectives that individuals may have with regards to the same issues open up an opportunity to reduce the likelihood of errors. In an organization, teamwork is developed through the contributions offered by various participants within the work setting. One work setting can either be classified as a project or a department and collectively these can be referred to as an organization. Groups of individuals that work separately to deliver the same results or to contribute to the same objectives do not use tacit knowledge anymore. They use explicit knowledge to make sure that they are working towards something they are familiar with by means of familiar strategies.
From groups that form an organization, a combination of knowledge is acquired. Individuals are integrated into the system through the acquisition of knowledge that unifies the organizational grounds. Several groups marked by a ‘g’ form an organization during the combination stage of the graph provided above. Then the knowledge is redistributed to the rest of the groups and individuals respectively. This redistribution occurs during the internalization stage when individuals and groups acquire uniform knowledge from the organization stage. The internalization stage allows individuals to interact with new employees back during the socialization stage. In this case, the transfer and diffusion of knowledge is a cycle that applies to every member of an organization within a given period.
In business, knowledge is valued through a chain, namely, the knowledge business value chain. An example of this model is provided below\, and this section explains how the schema provided helps us in the understanding of tacit and explicit knowledge while designing knowledge management solutions.
Knowledge is like information in the way we acquire it and the way we manage it. Knowledge can be retrieved from the same sources that provide data and information. The amount of information that we get every day is limited to the channels that provide them. However, to make sense of the information, it must be relevant in one aspect of an organization or another. The amount of information that we can access and fail to make sense of goes to waste, hence, costing us the time we invested in the collection of information. On the other hand, knowledge cannot be collected, but it can be managed. This is possible through the same channels as those that provide information. People we come across every day, systems, and databases that we access on a daily basis provide an estimate for activities, and we therefore develop tacit knowledge. In this case, interaction with various people at the organizational level helps tacit knowledge holders to channel their knowledge towards a course that purposely requires that specific knowledge.
Considering the information provided above, the connection with the knowledge business value chain is that the knowledge an individual has may be either tacit or explicit. Either way, this information has to be managed from the time it is acquired to the time it is applied. Knowledge in this case is treated like data due to the fact that it can be acquired or mined, stored and managed, disseminated, and applied in an organizational platform. The role played by the schema given above in the understanding of information management is to provide knowledge in the form of data and highlighting the areas where changes are required.
Information systems have been an issue affecting contemporary organizations in terms of implementation. Drawing upon readings and seminars, this section will explain how this has happened through highlighting the main reasons for success and failure.
The implementation of information systems has never been a simple or easy to undertake task. The implementation of information systems has worked for organizations through the cost of implementation, the number of issues resolved, and the period covered in full while implementing them. On the other hand, there is the period taken to implement them, the resources invested, and the lack of sufficient coordination between input and output. The fact that organizations have successfully implemented information systems can be owed to the phase by phase implementation method. The implementation of information systems does not necessarily mean that an organization does not have functional systems; it is more about adopting new systems and trying to get rid of older ones. Organizations which upgrade or apply the implemented information systems on a segmented routine have the time to analyse how effective the systems are before they turn out to be failures. On the other hand, dynamic business environments do not allow organizations to decide what information systems they should implement; therefore, an organization is likely to fail miserably by the implementation of a certain type of system.
Timing is an issue that organizations face during the implementation phases of information systems. This is because an information system would take up up to five years to be implemented fully and to prove that it works. Between the time the implementation begins and the time that it ends, a need to implement a newer system may lead to the fact that the organization will not benefit from the implemented information system. However, the fact that some information systems are implemented to cover a short duration may be unbeneficial to the organization in the long run. This is because too many decisions would be required hence limiting the time for implementing a quality information system. On the other hand, opportunities that require the collection of information benefit from the short-term implementation of information systems in that the short-lived opportunities can be seized. However, the faster an information system is implemented, the more constraints it may have in terms of addressing security and privacy issues.
The rapid diffusion and innovation of information technology and information systems has been a cause of a new problem for corporations, government and citizens; this section discusses the issues concerning security in regards to the fast changing technologies.
Considering an organization like Apple Inc., a few years ago, this incorporation was not popular and was lagging behind in spite of the fact that it was leading in the production of top quality computers. When the organization’s management and executives noted that other organizations were making large profits through the sale of other platforms besides personal computers, the organization decided to produce mobile phones and tablet computers. This move was very successful for Apple, and it has made the company one of the most successful organizations in the world. Other organizations followed suit in a quest to be like Apple. Some of them copied the company’s identity products and services, while others adopted the technologies Apple used. In this case, organizations seeking to compete with Apple have engaged in every kind of product production and service rendering. This brings us to the question of competition. Organizations are not implementing information systems because they simply want to, but because other organizations threaten their existence.
With ever-changing technologies, every organization wants to be on top in business and in the generation of profits. In this case, security has not been prioritized to protect data and privacy of customers’ information. As information systems change, cybercrime that involve hacking, identity theft, and phishing keeps growing, as perpetrators develop their technologies all the time. Hackers utilize the holes left in security protocols of information systems to get the data they want. Sometimes, these cybercrimes are not aimed at organizations for financial gain but rather for sabotage of the systems. In some extreme cases, organizations steal information to use it against each other. This practice is known as corporate espionage.
As a recommendation, organizations should take time to implement systems that address security issues by developing quality and secure systems. On the other hand, as far as information technology is concerned, cybercrime measures are addressed with new technologies as well. Organizations need to take time to implement the firewall application to their databases as well as safeguard the peripheral devices that are connected to their information systems.
Technology development has led to the increase of the amount of data, information, and knowledge. This section discusses the reasons behind the deluge of information, data, and knowledge while focusing on how individuals, governments, and organizations can develop strategies to deal with the problem of the information overload. This section also shows how technology is responsible for the increased generation of data as well as how technology can be used to better manage content.
Before addressing the issues highlighted in the introductory section of this question, we will shift our focus to address the steps that should to be taken to enhance innovation and insights instead of accumulating data, information, and knowledge. Data can simply be defined as any unprocessed content, while information can be classified or defined as the result of processing data. Through the acquisition of the right information, an individual is able to deliver and use the information to deal or address real life situations. The use of information while handling a situation changes the information acquired from processed data into knowledge. In this case, organizations should use the available information to develop innovative ideas while building and creating strategies that foster good decision-making capabilities. In the long run, an organization should find a mechanism that does not accumulate data, but one that programs data according to the requirements of the organization.
Individuals, governments, and organizations can formulate strategies that would handle the data and information deluge through a regulation system. Data collected by information systems includes relevant and irrelevant items that an organization may not require for the time being and that it may require at some time in the future. In this case, organizations, individuals, and governments can acquire a technology that regulates the type of data and synchronizes them with the recent and current requirements. Financial institutions affect the business industry anytime they change or adapt new policies. However, if top executive officers are involved in a scandal, despite the fact that this can be categorized under business, information is irrelevant to a business model. In this case, the technology that fishes out all that information can be regulated to filter information on the basis of its relevance to the organization’s needs.
Enterprise systems help organizations to have a better understanding and control of their businesses. This section focuses on explaining the statement on the basis of examples from ERP, SCM, and CRM. Obstacles and challenges limit the chances of getting the best out of enterprises and the reason why many ERP systems fail to reach their goals.
Enterprise systems mostly deal with the management of information regarding the organization’s activities of management, manufacturing, sales, and marketing among others. The Enterprise Resource Planning system deals with management and processing of data that are related to manufacturing, financing and accounting, sales and services, and customer relations management. Supply Chain Management is about designing, planning, executing, controlling, creating net value, building competitive infrastructure, and synchronizing supply with demand among other factors. The Customer Relationship Management system is a management approach that deals with interactions between a company and its clients, customers and sales prospects. It applies the technology in the organization, automation, and synchronization of business processes.
The above named systems are useful to organizations because they may help in the understanding and controlling of their business. Considering the application and use of ERP, it is understandable that it helps organizations to regulate or keep track of internal and external information in regards to its activities. Through the management of the flow of information, an organization understands the processes and tasks that it engages in and that are less beneficial. On the other hand, the same type of information can be used by the organization to take control of its activities as well as how to manage better its decision-making processes. CRM, on the other hand, would enable the organization to focus its attention on real issues that affect its clients and customers on a daily basis. The importance of this system is to draw customers close to the organization through the media (TV and radio) or through social networks (Twitter and Facebook) by trying to address their needs through the response they give after reviewing products and services. SCM connects an organization with other businesses through a network and, therefore, it allows an organization to build strategies that are inimitable, non-substitutable, and rare in order to make it in the business arena in spite of the presence of numerous competitors. These systems are not only able to let an organization to understand and control its business, they are able to aid in the decision-making process by highlighting the areas that require policy and strategy.
The business environment has been changed by e-business solutions. Annually, more customers and organization are doing their businesses online. This section highlights e-business solutions drawing on their advantages and their shortcomings while recommending how organizations may prepare to deal with the challenges brought about by these solutions.
E-business is about conducting business online with the help of cellular networks or the Internet. E-business platforms have enabled organizations to sell items and services through the Internet; some of these include music sold by iTunes, books sold by Google and Amazon, and any type of product sold by one customer to another customer through eBay. As an advantage, customers do not have to travel to physical stores, as they can fix orders and have their merchandise delivered to them. It is a cost effective method of conducting business, as it connects manufacturers with customers and eliminates some expenses that drive prices high.
However, e-business has posed a threat to existing business models like physical book stores, music vendors, newspaper printing companies, and sellers of copyrighted material. On the other hand, some customers have experienced inconveniences caused by e-business fraudulent actions on such sites as eBay. In this case, organizations can prepare for the challenges posed e-business by adapting to the technological changes, providing tracking services, and ensuring that customer to customer (C2C) platforms present descent transactional means.
Some other e-market places have been enabled by the Internet, which has evolved from the EDI platform. This can be supported by such examples as private industrial networks and net marketplaces. This section discusses these models, investigating their advantages and disadvantages.
A private industrial network is a model that uses extranet to establish a connection between its suppliers and its business partners. In this case, an organization is the central unit where suppliers deliver materials, while business partners (distributors) distribute the products of the organization. An advantage of this model is that the organization can regulate its operations through demands and supply means. The distributors assess market trends and deliver products according to demand, while, on the other hand, the organization can increase or decrease the amount delivered to their premises by suppliers. A disadvantage of this model is that it shields the organization from its customers, and it is hard for the management and executives to implement changes that would reflect customer needs.
New marketplace is an e-market model that connects various sellers and buyers together digitally eliminating the need of brokers or incurrence of extra costs. This model involves buying and selling of catalogues, automated purchasing, sourcing, and processing and fulfilment. An advantage of this model is that it is beneficial to the organization and customers because it brings them together in an interactive platform. Organizations can serve customers on the basis of their responses, while customers spend less because brokers have been eliminated from the e-market platform. Another disadvantage of this model is that organizations may fail in their business, as there are many players in the industry offering the same products and services to a limited number of customers. In this case, it is hard for an organization to retain its customers, as too many players compete on one platform.
A contrast between the business models of Amazon and eBay is discussed in this section focusing on the levels of their competition and outlining their strengths and weaknesses.
The business models on the basis of which Amazon and eBay compete are different from each other in that Amazon uses a business-to-customer (B2C) model, while eBay uses a customer-to-customer (C2C) model. Through Amazon’s model of B2B, the organization takes responsibility of marketing digital content and products submitted by businesses to customers. Amazon earns commission through the sale of the products. However, a disadvantage of this model is that Amazon has to provide other services of tracking and ensuring that products are in a good condition, despite the fact that deliveries are made by different parties (courier services).
The business model run by eBay (C2C) connects customers to customers, and prices are set through bidding or negotiating with the seller. An advantage of this model is that eBay does not take responsibility for shipping, tracking, and protecting products sold. EBay earns commission from every sale made through its platform. A disadvantage of this model is that the platform is insecure, as products cannot be verified in terms of their conditions. On the other hand, it is hard to retain customers or users of this platform, as any negative incidents lead to customers opting for other models or organizations.
This section addresses the advantages and disadvantages of cloud computing in respect to its three types: infrastructure, platforms, and service. It will also discuss how social media can be placed as a kind of cloud computing.
Cloud computing is the ability to conduct business online and save information in virtual databases. Infrastructure cloud computing involves the use of servers to store information and provide processing service. This is mostly applied by organizations that involve themselves with large amounts of data and processes like the gaming industry. Platform cloud computing provides virtual memory and processing power that will cover a certain department. Computers in a network can access and disseminate information to and from local servers. Service cloud computing offers storage memory for personalized data to individuals like storing and sharing videos and photos (YouTube and Flickr)
Social media can be considered a kind of cloud computing; this is because users are able to upload and store photos, videos, music, and they can also create blogs to store information. Delicious offers individuals the opportunity to save their bookmarks online therefore, disseminating cloud computing prospects.
The challenges and risks of cloud computing involve security and content ownership. Users can lose their data if the system fails or if it is attacked by hackers or by malicious activities. On the other hand, content stored online may swap hands or may be lost if the service provider changes the system or the organization is acquired by another organization. The security of content stored online cannot be guaranteed, as hackers can which will result in identity theft and other cybercrimes.
Advantages and risks of outsourcing are discussed in this section. An important relation between outsourcing and the governance of an organization would be discussed in this section.
Outsourcing is different from offshoring in that it seeks to acquire services of another organization instead of offering. Outsourcing can help an organization to better its governance by reviewing its operational strategies against those offered by another organization. Through this, an organization’s management can identify weak areas and work on them. The advantages of outsourcing include the ability to rectify problems without the need to implement new technologies and learning management strategies from the outsourced services. The risks involved with outsourcing include disclosure of operational models to another organization; this may work against an organization, as its classified information may lead to the competition.
This section discusses organizational structures and their relation to information management through Leavitt’s model.
Leavitt’s Diamond depicts the interconnectivity between organizational tasks and processes showing how people and technology influence them. Technology and people, on the other hand, are influenced as they alter the organizational structure. Given that tasks and processes of an organization have to be delivered with the help of technology, people are connected to the organizational structure, tasks, and processes through technology. Information management is taken care of during the tasks and processes stage, while, at the same time, the organizational structure is defined through the technological backbone responsible for disseminating information and generating data. Information management is, therefore, attained using a reliable technology; tasks and processes are performed by the technology and presented to people. They make decisions on what tasks and processes to implement or scrap in order to have a better information management approach.
This section discusses the impact of mobile and wireless technologies in the business environment.
Mobile and wireless technologies have influenced organizations and individuals in a manner that they are able to keep track of economic changes. More and more people are getting connected to each other, and their business ideas travel faster. With regard to organizations, people find relevance in searching content related to modern business models. Social relations have also changed so that organizations can track the needs of their customers through fast and reliable means presented by social media.