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This paper focuses on the rapidly growing area of e-commerce, more so with the emergence of the National Information Infrastructure.

Extracts from this document...

Introduction

CONTENTS PAGE 1 EXECUTIVE SUMMARY OF KEY ISSUES 1 2 CRITICAL ANALYSIS OF THE JOURNAL 2 2.1 Microenvironment Forces 3 2.1.1 Social & Cultural 3 2.1.2 Legal 3 2.1.3 Economical 4 2.1.4 Political 4 2.1.5 Technological 4 2.2 Key Components 4 2.2.1 Marketing 4 2.2.2 Organizational Processes 6 2.2.3 E-Procurement 7 2.2.4 Communicating Across The Value Chain 8 2.2.5 Payment System 8 3 ASSUMPTIONS POINTS 10 3.1.1 Point 1 10 3.1.2 Point 2 10 3.1.3 Point 3 11 3.1.4 Point 4 11 3.1.5 Point 5 12 4 CRTICAL ISSUES TO CONSIDER FOR RSC 13 5 CONCLUSION 14 6 REFERENCES 14 6.1 Appendix A 15 6.2 Appendix B 17 1 EXECUTIVE SUMMARY OF KEY ISSUES This paper focuses on the rapidly growing area of e-commerce, more so with the emergence of the National Information Infrastructure. Many companies are positioning themselves to gain from the efficiencies and effectiveness derived within its operations of an e-commerce environment. The paper explains transactions cost theory, its effects on the economizing on coordination cost and rapid cost performance improvement that could be conducted via the e-commerce environment. It explains how the e-commerce environment could substantially reduce profit margins, as consumers will be spoilt with choices expecting cheaper goods whilst firms will be competing for consumers thus reducing its product's prices to stay competitive. Hence, the article suggests that firms would resort to marketing restriction methodology to retain its existing customers. Furthermore, the overall expansion of the e-commerce environment would have an impact on the existing supply chain management, hence emphasising the need to rethink and redefine the value/supply chain management resulting in the value/supply chain reconfiguration. As the evolving infrastructure would link the various groups, namely producers of information, producers of physical goods, electronic retailers, electronic markets, physical distribution networks and electronic channels, the article suggests that an essential market choice box would emerge as a critical technological device to link these groups. ...read more.

Middle

This then provides the ultimate customer superior value, i.e. deliver products to customers with greater efficiency and lower cost, and also reduces operational cost and so increases profitability. Hence, firms have to consider issues involved in modifying the supply chain in response to e-commerce, i.e. in its upstream and downstream processes, as it should be recognised that process are not confined within one department but they cross the supply chain of all activities. Strategies for the supply chain improvement, as categorized by Hughes et.al. (1998), is based on the scope of change and the speed of change. These changes are associated with business process reengineering and business process improvement (Bocij et al., 1999). Whilst the downstream supply chain management effectiveness and efficiencies have been explained above in the e-marketing concept, here the upstream supply chain management will touch on the e-procurement concepts. 2.2.3 E-Procurement The growing importance of e-procurement was highlighted by the Tranmit plc (1999) report that showed that around 90% of firms said that they planned to implement an e-procurement management report within the next 5 years, because of the cost saving issues. E-procurement is defined as, electronic integration and management of all procurement activities including purchase request, authorization, ordering, delivery and payment between purchaser and supplier. The primary driver for e-procurement in firms is cost reduction through the need for less material in stock due to faster purchase cycle time. Kluge (1997) and Kalakota and Robinson (2000) consider procurement to be a strategic issue since, significant savings can be made and these cost reductions should increase greater profitability. However, there are risks and impacts that are associated to e-procurement that firms should be aware of. Security concerns and lack of thrust are amongst the risks factors. As stated by Potter (2002), 'people need to be satisfied about who they are dealing with. They need to know that their message have not been intercepted or corrupted on the way, and most importantly they are legally non-repudiable - meaning the other party can't walk away from it in the court of law'. ...read more.

Conclusion

There could also be on-line processing of tenders and purchase orders and as such increase efficiency and effectiveness. As an example, RSC buys a lot of liquor and beverages and F&B peripherals from many different intermediaries and upstream supplier."B2B" is applicable here (E-procurement). E-Commerce helps expand the club into a global reach. Remembering the different categories of membership that the club has, will explain the need of global reach. The ability to reach all members at all time through its ubiquitous access and speed of delivery increases business opportunities. For example when a member has to go outstation or affiliated members coming to KL, they will find it easier to request for affiliation club approval via the website. Furthermore this expansion could result into maintaining a leading edge technology position and image in the market place and against competitors (E-marketing). 5 CONCLUSION No one should underestimate the resources needed to bring an e-commerce environment into its business. The impact the resources have on the adoption of e-commerce would be high on the Capex and the Opex, i.e. hardware, software, maintenance and human resources. However this could be overcome with proper outsourcing methodology. Nevertheless, even though the benefits of e-commerce could be enormous, it is imperative to understand and manage the transition from the traditional concepts into the e-commerce strategies with care. The risk of not venturing into the e-commerce could be far greater than the investments required. While a lot of the views and thoughts reflected in this paper were assumptions and inspiration from years of practical, hands-on supervisory/managerial experience, I do not profess to come up with the management fads and revolutionary thinking on my own. On this score, many of the contemporary views and management fundamentals used or described in this paper have been gathered from various sources and articles including, E-Business and E-Commerce Management- Dave Chaffey, and other websites etc as noted. There might be other management ideas and thoughts linked to other sources which might be deemed to be 'acknowledged' here even if no direct translation or quotes have been extracted. ...read more.

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