Recent Developments in Information Technology

Advantages of using video conferencing include:

• People in different locations can have meetings
• Better interaction than just telephone
• Easy to set up meetings
• Can send computer files
• No need to travel

Disadvantages of using video conferencing include:

• The equipment is very expensive
• High bandwidth required
• Jerky pictures

Accessing the Company network from home

According to IKEA, the Internet can be defined as, ‘a world-wide computer network combining a number of separate computer networks, and these in turn connects a number of individual computers. 

IKEA uses the Internet to extracting relevant information and to encourage customers to visit their website, to look at the wide range of products that the business has to offer. In 2004, 153,000 visits a day were made to the Company website.

This is a corporate site of IKEA Group:

This is a website of the Wednesbury branch of IKEA:

Advantages of using an Internet include:

• It is always up-to-date
• Multimedia- many website contain text, sound, images and movie clips. Also, messages can be put across in all sorts of imaginative and innovative ways
• It is big- a huge amount of information is available for online users and the Internet is constantly growing rapidly
• It is good for business- the Internet is good for: advertising; getting customer details for mailing lists; communicating with other businesses; communicating with customers; conducting business transactions; displaying full details of goods and services; doing business in new ways; and, entering new markets (possibly globally)
• It is accessible- most people in developed countries have access to most of the information on the internet
• It is good for customers- it is easy for disabled or ill customers to shop and bank on-line. A wide range of goods are available trough the Internet and delivery of goods can be very rapid. Also, prices of goods are much cheaper. For example, buying a car from another country is cheaper than buying a car in Britain

Disadvantages of using an Internet include:

• Undesirable materials- there are a vast of information that is offensive, misleading, unreliable or plain rubbish to online users
• Security- data on the Internet is not secure. Because of this, some online users are cautious about using e-commerce and on-line banking. This is a particular concern about sending credit card details over the Internet
• Finding information- there is so much information on the Internet and it is constantly expanding, that is often very difficult to find what the user need
• Filtering- filters are available both within web browsers and as extra software. They aim to block specific sites or types of site

Looking at IKEA Internet Policy, I have found out that IKEA uses the World Wide Web (WWW) for a number of different services, e.g. marketing shopping, business to business services, mail, bulletin board, search for documents (library) and pictures, sound, video and audio.  I have also found out, that IKEA co-workers have to follow the rules and guidelines in the IKEA Information Security Handbook, to prevent the misuse of the Internet within the organisation. A copy of IKEA Internet Policy is in the Appendix section. I have also included a copy of IKEA Information Security Policy in the Appendix section.

Mobile computing

Mobile computing describes the user’s ability to use application software through the application of small, portable, and wireless computing and communication devices. This includes devices such as, laptops with wireless LAN technology, mobile phones, Personal Digital Assistants (PDAs) with Bluetooth, and USB flash drives.

IKEA uses a wide range of wireless computing and communication devices. For example, IKEA co-workers use laptops to work at home. This is often called teleworking.

Advantages of teleworking include:

• Less travelling- as this reduces the environmental costs of commuting and the personal stress and loss of time caused by a daily trip to work
• Working hours suit the individual- family time can be fitted in better
• No need to live near work place- teleworking can be done anywhere, e.g. from London to Scotland.
• Savings on expensive office space

Disadvantage of teleworking include:

• Less social contact
• A suitable room has to be found at home
• Likelihood of interruptions from family

Intranets

According to Wikipedia, an intranet can be defined as, ‘a private network that uses Internet Protocols, network connectivity, and possibly the public telecommunication system to securely share part of an organisation’s information or operations with its employees’. 

An intranet will allow IKEA co-workers to share information, fix up appointments with each other, pass important documents internally, and many other functions.

Advantages of using an intranet include:

• Workforce productivity- with intranet, employees can quickly find and view information and applications relevant to their roles and responsibilities
• Time- with intranet, businesses can provide more accurate information to employees on a pull basis rather than being flooded by random emails
• Communication- intranet can serve as powerful tools for communication in a business, vertically and horizontally

Extranets

An extranet is a private network for customers rather than the general public. It can provide access for customers to research, current inventories and internal databases, and any information that is private and not published for everyone. It uses the Internet as its transmission system, but passwords are needed to gain entrance. Access to the site may be free or require payment for some or all of the services offered. An extranet requires security and privacy. This can be achieved by installing firewall software, encrypting messages, and using server management.

Corporate data integration

Corporate data integration is a process which allows customers to see how the business is doing on a monthly basis. For example, a bank would show interest rates, stock exchange and other information that their customers want to see once a month. This process can be very frustrating, especially if a customer is anxious to see how well the business’ shares are doing.

Access to corporate data for on-line just-in-time reporting

This is a process where customers can able to see what is really happening in businesses, such as IKEA.

E-mail

An e-mail (also known as electronic mail) is a way of sending messages, data, files or graphics to other users on the network.

An e-mail will allow messages to be sent to anyone on the network, even on the other side of the world, just for a price of a local telephone call. When messages arrive to their destination, they are then stored in a mailbox. When the user receiving the message connects to the network, they are informed of the incoming mail, waiting to be read.

After reading the e-mail, the user can: delete the message; file the message by storing it on the disk; send back a reply; or forward the message to one or more people.

IKEA use e-mail as a means of internal and external communication. For example, a HR manager sends a copy of the Health and Safety regulations to the Warehouse manager. Another example is a staff member sends an urgent letter to a supplier.

IKEA customers also use e-mail to contact their local IKEA store by sending the message through their Company website.

Advantages of using an e-mail include:

• The message is usually receive instantaneously
• It is very simple to compose, send and reply to e-mail
• Large files, such as video clips, audio files and documents can be attached
• E-mail can be encrypted for extra security
• It is a convenient and low-cost communication
• Messages can be sent from your PC without having to leave your desk

Disadvantages of using an e-mail include:

• Sometimes an important message may get lost along with other ‘Spam’ (junk) e-mails
• An e-mail message may seem less formal and important so may only get a casual response
• Constant e-mailing can be intrusion on a worker’s day
• Personal working relationships do not develop as well without voice contact
• Can be abused and used for unsavoury communications which may offend people
• Viruses sent with attachments can infect the recipient’s computer

The Wednesbury branch of IKEA uses information technology as a mean of internal communication, when it wants to communicate between members of the organisation. The organisation use internal communication to transfer information and initiate action. The organisation also use internal communication to pass on restricted information within the organisation, for example new furniture that IKEA is designing.

The Wednesbury branch of IKEA uses information technology as a mean of external communication, when it wants to communicate outside the organisation. The organisation has a public image, and this conveys a message which influences everyone who is connected with it, i.e. customers, shareholders, competitors, suppliers, the government, and the community. It is important to provide a strong image to these people because; it will create a better external environment for the organisation. The Wednesbury branch of IKEA has a Company website that provides members of the public, formal information about the organisation.

Looking at the Corporate I.T Network Policy of IKEA, the organisation has an ISDN (Integrated Services Digital Network) network. The advantages of having an ISDN network are: it can transmit video and voice signals in digitised format; there is no need for modems; there is no need to transform the computer’s information into sound; and information transfer is faster and more reliable. A copy of IKEA’s I.T policy is in the Appendix section.

 

The uses of e-commerce

E-commerce (electronic commerce) is an important aspect of the Internet, to have emerged in the recent times. According to Scottish Enterprise, ‘e-commerce is a business transaction through electronic media (Internet, e-mail, extranet, intranet, EDI), which supports the buying or selling of goods or services’. E-commerce can be sub-divided into three categories: business-to-business (B2B); business-to-consumer (B2C); and consumer-to-business transactions (C2C). E-commerce is often referred as an e-tail, e-trade, e-business, or trading online.

There are number of purposes of having an e-commerce in an organisation, such as IKEA. The main purposes include:

1. Marketing of goods and services
2. Retail of goods and services
3. Customer service
4. Supply chain management (also called an e-procurement).

1. Marketing of goods and services

Marketing of goods and services can be sub-divided into two sections: marketing products in a website and marketing the website.

1. Marketing products on a website

Businesses can successfully market the products on a website, depending on the navigation, frequent changes, interactivity and a choice of headline products on the home page. Navigation ensures that the minimum number of mouse clicks is needed to find a particular product. Frequent updates can encourage repeat visits. Interactivity can be used to retain customer loyalty. Businesses such as IKEA need to ensure that the customers are informed about the promotional offers, when they log on.

2. Marketing the website

Marketing the website may involve an organisation adding an e-commerce site to their existing retail operations (this is known as ‘clicks and mortar’). This may make it easier for e-commerce businesses to market their products and services. They need to encourage customers to use their e-commerce, by offering them tangible benefits, such as lower prices and home delivery.

2. Retail of goods and services

Retail of goods and services can be sub-divided into two sections: traditional retailers and dotcom companies.

3. Traditional retailers

Traditional retailers, such as Tesco have a customer base, which can easily attract customers to their website. The chief of these traditional retailers will be concern with payment, packaging and delivery. An e-commerce organisation can set up credit card facilities, using a bank’s merchant services. An e-commerce organisation can negotiate deals with distributors, such as the post office, to deliver goods within pre-set time. Also, an e-commerce organisation can establish a call centre to deal with customer’s complaints and enquires.

4. Dotcom companies

Dotcom companies are start-up companies that sell goods and services over the Internet. Many dotcom companies are constantly trying to recreate a similar shopping experience that is offered by the traditional retailer, for example sound, video, and interactive product demonstrations. This may go beyond the two-dimensional nature of e-commerce, known as e-tailing.

3. Customer service

An e-commerce organisation can combine customer purchases with back office systems, like stock control to give accurate information and feaster delivery. An e-commerce organisation can able to provide a more personalised service to its customers, by providing the retailer’s contact details. An e-commerce organisation can deal with common queries in the Frequently Asked Questions (FAQ’s) section. Customers can receive a 24 hour service and their e-mail queries can be dealt with on time. Also, an e-commerce organisation can set up a small-scale call centre operation, to deal with their customer’s enquires.

4. Supply chain management

A supply chain management is a business-to-business function, which enable small businesses to provide its goods and services, without the need to keep a large stock. These small businesses can make orders from its suppliers at the latest possible moment, to sell the goods immediately and reduce the stock level. This may lead to improve cash-flow.

IKEA use e-commerce for marketing goods and services and customer service. The organisation provides high-quality products at lower prices and this attracts customers to visit their website. In fact, 153,000 visits a day were made to the Company website in 2004.

Customers can easily access to see IKEA’s products, just by clicking onto ‘Our products’ section.

The Company website is very colourful and attractive to the customers. The information displayed on the website is easy-to-understand and clear to read.

The IKEA’s product section contains a list of products that the organisation offers to its customers. Each product contains information about the product and a graphic image of how it looks like.

The organisation offers a wide range of special offers and tangible benefits, such as home delivery.

The Company website provides customer service to its potential customers. The organisation provides answers to common queries to its customers in the Frequently Asked Questions (FAQ’s) section.

Also, the Company website has an IKEA Help Centre, which enables customers to communicate with IKEA’s online assistant, at the other side of the Internet.

However, IKEA Help Centre is very time-consuming and sometimes the online assistant does not provide the relevant information that the customer requires.

A successful organisation needs to have a well-organised business structure and a secure, well-design website. To do this, the organisation needs to consider such factors, e.g.:

1. Providing easy and secure way for customers to order- for example, using credit cards
2. Providing reliability and security- for example parallel servers and firewalls
3. Providing 360 degree view of the customer relationship- this ensures that all employees, suppliers and partners have a complete view and the same view of the customers
4. Setting up an organisation of sufficient agility to respond quickly to changes in the economic, social and physical environment.
5. Providing an attractive website- this may include the use of colour, graphics, photographs, animations, fonts an d white space percentage

A successful organisation also needs to provide an enjoyable and rewarding experience to its customers. To do this, the organisation needs to consider such factors, e.g.:

1. Providing value to its customers- vendors can achieve this by offering a product that attracts customers at a competitive price
2. Providing service and performance- this can be achieved by providing a responsive, user-friendly purchasing experience
3. Providing an incentive for customers to buy and to return- this can be achieved through sales promotions, cross-linked websites and advertising affiliate programs (also called a loyalty program)
4. Providing personal attention- this can be achieved through personalised websites, purchase suggestions and personalised special offers
5. Providing a sense of community- this can be achieve by setting up chat rooms, discussion boards and affiliate programs

Advantages to having an e-commerce include:

• A worldwide market with no geographical limitation on the customer and the opportunity of finding new customers
• The ability to find information on competitors and to compete with larger businesses on an equal basis
• Lower operating costs
• Cost savings on marketing and promotion- for example, producing fewer brochures
• The ability to buy as well as sell goods on the Internet
• Forging better customer relationships
• Being faster than traditional retailing
• Offering more choice than traditional retailing

Disadvantages of e-commerce:

• Staff- technical staff are an expensive resource
• Building a customer base is expensive
• Distribution- it is difficult when delivering orders to customers within a reasonable time period
• Quality- online products should be equal in standard to the offline products
• Expensive to set up e-commerce systems
• Risk of fraud
• Lack of knowledge
• Lack of IT facilities

However, most of these barriers can be overcome through such things as government initiatives and training.

Recent Developments in e-commerce

According to Peter Högsted, the head of IKEA UK, the Company will be planning to launch an e-commerce home shopping service within the next 12 months (see Appendix). IKEA will soft launch the new e-commerce service in the summer and autumn. This new e-commerce service will target customers living in certain areas outside London, enabling them to pay for products over the Internet. If the new e-commerce service becomes successful, IKEA will then launch it throughout the UK later this year (2006) or early next year.

At the moment, IKEA’s customers can only browse the products displayed on the Company website, before going to the stores.

Advantages of online-shopping include:

• The stores are never closed
• There is no dress code
• There are no parking woes
• You do not have aggressive salespeople bothering you
• Vast resources for product and price comparison are available
• Products can be found that are not available locally

The drawbacks of online-shopping include:

• The inabilities to physically check out the items you are purchasing
• Losing the power to negotiate the price and payment terms that may exist in local stores.
• Items ordered online are sometimes on backorder but the consumer is not always informed until weeks after the purchase is made
• Not always knowing if a site is a legitimate and safe site to shop
• Having to pay for shipping costs that far exceed the true shipping rate
• Returns and exchanges can sometimes be difficult because of the lack of face to face negotiations