E Business and Data Collection

University Degree Business and Administrative studies

1.0 INTRODUCTION

This report aims to identify and describe an application of E Business system which facilitates the capture of data relating to individuals. It also evaluates how the collection and processing of this data contributes to effective management of business. Further the report describes and analyses the ethical challenges presented by the collection and application of this data from a managerial perspective.

E-Business is the conduction of business in the electronic souk. In practice, this involves the introduction of new revenue streams through the use of e-commerce, the enhancement of relationships between clients and partners and improving efficiency from using knowledge management systems. E-business can be conducted over the public Internet, through internal intranets and over secure private extranets. (K-Solutions, 2000)

However the most basic definition or explanation of e-business is “using the internet to connect with customers, partners, and suppliers. But the term also implies the transformation of existing business processes to make them more efficient.” (Netessence, 2003)

E Business in a lay man’s terms is conducting of business over the internet. Today it is more generic than the term e commerce because it not just buying and selling but also about customer servicing and business collaborations.

2.0 E–BUSINESS SYSTEM

“A system is a set of interrelated components working together to achieve a collective goal.” (Bocji 2003)

(Alter 2002a) defines a system as “business processes using computer and communication technologies and computerised data”

An E-Business System (EBS) is a system which performs and co-ordinates business processes using computer and communication technologies and computerized data.

3.0 CUSTOMER RELATIONSHIP MANAGEMENT (CRM)

“Customer Relationship Management (CRM) is an information industry term for methodologies, software, and usually Internet capabilities that help an enterprise manage customer relationships in an organized and efficient manner.” (Marios alexandrou, 2007)

In many a cases, an enterprise builds a database of its customers which describes relationships in sufficient detail so that the management, sales team or the customer service team can access information which matches the customer needs. They use this to communicate and regularly remind customers of service products a customer might be interested in. (Marios alexandrou, 2007)

Customer Relationship Management is a process or methodology used to learn more about customer's needs and behaviours in order to develop stronger relationships with them. There are many technological components to CRM, but thinking about CRM in primarily technological terms is a mistake. (CRM Tutorial, 2008)

“A more useful way to think about CRM is as a process that will help bring together lots of pieces of information about customers, sales, marketing effectiveness, responsiveness and market trends.” (DINFOSYS, 2008) The idea of CRM is that it helps businesses use technology and human resources to gain insight into the behavior of customers and the value of those customers. (SmallBizCRM, 2008)

3.1 TECHNOLOGICAL CONSIDERATIONS

The basic building blocks of CRM are the database a company has in its capacity, customer intelligence, and efficiency and competence management systems.

Database – A database here refers to the information a company holds within its capacity about each real and prospective customer. This database will have the details of all interactions within the organization, which includes but is not limited to customer’s transaction history, orders in the pipeline, support available for the customer, any special request or complaints made by the customer. It at times also includes interviews or market research survey responses of the customer.

Customer Intelligence – Using the information available in the above database a god E Business system interprets customer needs and wants long with and profitability projection to prepare a business strategy. This strategy aims to cluster customers into different segments, captured by customer interactions over the past. These details are then put into the software that tracks the success of the strategy, how neatly it is followed and ensures that the desired results are achieved.

Learning and Competency Management Systems – This system enables the company to achieve the desired and projected results. Complex strategies and systems of CRM require practice in order to achieve desired outcomes, especially when humans and technology are interacting.

3.2 APPLICATION ARCHITECTURE OF CRM

This base and building blocks can be put into practice over a period of time or at individual times, but eventually it needs to be actively coordinated. In a CRM application structure and design there are three components.

3.2.1 OPERATIONAL CRM

Operational CRM refers to the various divisions of the "front office" business processes, which is involved in personal customer contact. This includes sales, marketing and service and various other departments. The various tasks resulting from the operations of these processes are forwarded to the concerned department. The interactions of the company employee and the customers are recorded in the system. This information forms the data for a good CRM and can be accesses in the future for reference purposes. The information stored in this is very vital as this includes the data of personal interaction.

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3.2.1 OPERATIONAL CRM

3.2.2 ANALYTICAL CRM

In the process of an analytical CRM, the information collected within operational CRM are studied to wedge customers and to identify cross- and up-selling potential customers into various groups. In this system collecting and gathering information about the customers is a continuous and ongoing process iterative process. Ideally, business decisions are refined over time, based on feedback from earlier analysis and decisions. Business Intelligence offers some more functionality as separate application software.

3.2.3 COLLABORATIVE CRM

Collaborative CRM provides a platform of interactive connections with customers and prospects through all possible channels of communication – written, fax, voice, internet and e-mail. It strongly supports and is based on co-ordination of employee teams and channels. It is a solution that brings people, processes and data together so companies can better serve and retain their customers. The data/activities can be structured, unstructured, conversational, and/or transactional in nature (Bizforum, 2000)

E-Business system process helps run an organization with better customer service. It helps increase revenues, tap new prospects, enables cross selling of products more effectively and also helps the sales staff to close deals faster and simplify sales and marketing processes. (CRM Tutorial, 2008)

3.2.4 GEOGRAPHIC CRM

Geographic CRM (GCRM) is an extension of CRM. This information system incorporates the geographical information system along with traditional CRM. This system blends information collected from various geographical factors. This may include but is not limited to route movement, types of residence, ambient trading areas and other customer and marketing information which are matched with relevant road conditions, building formations, and a floating population. GCRM enables an organization to examine potential customers and manage existing customers and develop new prospects in their region of operations.

4.0 AN IDEAL CRM ORGANISATION

Bradshaw and Brash (2001) explains that in order to deal with the challenges of customer relationships in the fast-evolving Internet world, even the most customer-focused companies have to understand the three essential insights to getting customer relationships right:

CRM construction in the front office is just the basic beginning, and that it must also incorporate the back office functions like manufacturing, fulfillment and billing. Also not to forget the analytical functions like data warehousing and pushing customer insights back up to the front office.

Further conducting relationships across multiple media requires the correct technical infrastructure; this would allow an organization to interact with their customers in a consistent way across various media, and even add new media as and when required without the need to develop every interface separately and from scratch.
Building the correct strategy for directing customers to different media. For a few organizations the strategy “we will deal with customers on whatever medium they prefer” is right; but for the vast majority of organizations it is a recipe for disaster.

Getting the right process in CRM across multiple channels means the company can deal with customers in and across multiple media and still have a unified up-to-date view of the customer, with no gaps. Ideals such as one-to-one marketing and the market one have been widely written about but rarely realized, except in the occasional corner florist’s. Getting CRM right is the closest approach to achieving these ideals that a large organization can make. Doing this across multiple media is a major achievement that will make the organization ready to face the future.

The purpose of this is to ensure that organizations know their customer fully, and then act according to their needs and the organization’s interest. Important information is generated and used in other areas. Any company that is doing CRM properly must integrate the front office, the back office, and analytical systems.

The back office executes the customer requirements. Generally the only customer contact functions in the back office are billing and logistics, and in even these processes the customer contact is moving into the front office environment.
Analytical software allows the organization to look for patterns in the customer data which they have collected. The outputs from this are strategic and tactical information.

The strategic information can be used to determine various future business strategies. While the information will help to alter the existing practice; increasingly the tactical information is generated and used on the fly in customer interactions.

FIG 1 VIRTUOUS TRIANGLE OF CRM

The current focus on CRM tends to be almost entirely on the front office. This is not harmful; all companies improve their performance in this. However it is not optimal in the long run for sure. Extending CRM into multiple media means integrating the front office and aspects of the back office with different communication channels (Dyche, 2001)

“This has to be done in a methodical way and organizations that get this part right will have thought carefully about the technical infrastructure they need. Standards are rapidly developing in this area and many vendors are building media portals that allow the organizations using them to deal consistently with customers across multiple media.” (Johansson & Sparredal, 2005)

Just because organizations and their internal departments can deal with customers across multiple media does not mean that they should offer the same facilities on each medium; Doing so would result in damage to operations and an ultimate disaster.

For Instance customers are generally prepared to wait for a considerable time to talk to a customer service agent in a call centre. However they aren’t ready to wait the same amount of time for the same transaction on an automated interactive voice response (IVR). (Alter, 2002)

5.0 E-BUSINESS & INFORMATION MANAGEMENT

The arrival of e-business only underlines the necessity for organizations to adopt systematic approaches to sharing knowledge. The demands of e-business for rapid response and agile adaptation to the market-place are a challenge both for the new dotcom spree and the traditional companies trying to adapt to the new world of e business. (Steven Denning, 2004)

A minimal response to enable survival in this fast-paced world is to offer e-commerce which shares existing services and products electronically through the Web. For this purpose, the rapid sharing of know-how among employees is already a necessity. Without it, the company finds itself publicly stumbling through inability to respond to the requirements of the marketplace, whether it be Business to business (B2B), Business to consumer (B2C), or Business to Employee (B2E) (Steven Denning, 2004)

An e-commerce approach may be good and strong enough to enable an organization to get by the death of business. But growth in this new electronic world asks for that wee bit more. It will require innovation and the generation of new businesses, with sharing of know-how among not only staff but also partners and customers in new and unexpected ways. Strategic knowledge sharing, particularly external sharing will affect every aspect of the organization's activities and will become a necessity (ECT, Home of Commerce, 2008)

In CRM the main process of the information sharing position would be to help organization-wide knowledge sharing, so that the organizations know how, information and experience is shared inside and outside the organization with clients, partners, and stakeholders (CRM Tutorial, 2008)

The various functions in the process of information and data sharing are

Promote knowledge sharing through organization's operational business processes and systems
Promote collaborative tools such as activity rooms to facilitate sharing of ideas and work among internal teams and external partners.
Provide support for the establishment and nurturing of communities of practice, including workshops, one-on-one guidance, and troubleshooting.
Share experiences across communities of practice, business units, and networks on innovative approaches in knowledge sharing, including preparation of case studies.
Help monitor and evaluate the knowledge sharing program, including external benchmarking and evaluation programs/opportunities.
Help disseminate information about the organization's knowledge sharing program to internal and external audiences, including organizing knowledge sharing events. (Steven Denning, 2004)

“Many practitioners of knowledge management increasingly see “knowledge sharing” as a better description of what they are about than “knowledge management”. Advantages of "knowledge sharing" as a term include its commonsense comprehensibility, along with a certain degree of inter-activity implicit in any sharing.” (E-sales, 2004)

Drawbacks of knowledge sharing include the possibility that even sharing is insufficiently interactive, and that it implies falsely that the existence of knowledge precedes the sharing process, thereby wrongly separating knowledge management from knowledge creation and innovation and research.” (Chaston, 2001)

Overall knowledge management is increasingly seen as signaling the development of a more organic and holistic way of understanding and exploiting the role of knowledge.

6.0 ETHICAL CHALLENGES FROM A MANAGERIAL PERSPECTIVE.

Ethical challenges are arising with the use of CRM as an e-Business tool or system as a whole. Business and IT activities involve many ethical considerations. Ethical principles and standards codes of conduct can serve only as guidelines for dealing with ethical businesses issues. However one of the most important responsibilities of an organizational management is to assure the security and quality of its e-business activities. Security management tools and policies can ensure the accuracy, integrity and safety of e-business systems and resources. (O Brien, 2002)

Doing business online brings into sharp focus ethical questions regarding privacy, employee monitoring and sharing data in supply chains. (Information Week, 2008)

There are many ethical, legal and web site regulatory issues involved in the CRM system. Electronic copyrights, E-commerce, cash or credit transaction policies, international trade barriers, tariffs, taxes, privacy, digital media offers, and financial security are a few of the keys issues to be considered. The few main criterions are discussed in this section.

Privacy- An important challenge that arises is that companies should have clear privacy policies. Customers will not like to trade on exchanges where the information is not secured or and privacy policies are not in place. Implementation of initiatives like TRUSTe (Refer Appendix 1) goes a long way in establishing company’s creditability and gaining customer confidence. (Information Week, 2008)

Security - Security here refers to IT security. Every company needs to have sounds resources to address security issues. Appropriate measures must exist to provide security to databases, networks, applications, payment systems and transaction systems. Authentication procedures and policies should be developed, implemented and regularly updated to provide secure environment. Introduction of system like ‘Verified by Visa’ (Refer Appendix)payments and use of technologies like encryption, Secured Socket Layer and Public key infrastructure can help organization overcome this challenge. (PWEBS, 2008)

Behavioural and educational challenges - Another barrier that can be difficult to overcome is related to consumer and employee attitude towards getting sued to a new process as it might take them a lot of time learning new processes. It is difficult for companies to encourage customers to change their habits and start shopping online. Besides, companies have a huge task to gaining customers trust and confidence. They have to provide reasonable assurance to trading partners and customers that their private information is secured and will not be compromised.

Initiatives like TRUSTe spearheaded by Electronic Frontier Foundation can go a long way in helping companies overcome this challenge. (Refer Appendix)

Website Issues - Unethical redirects to another webpage with completely different information than what was shown in the search results is a common practice which earns goo money for a company. This majorly gets revenue good enough for the company to sustain their domain and web operation expenses. (PWEBS, 2008)

Fraudulent Phishing Activities – Recently there have been a lot of fraudulent poachers in the web arena especially on portals like Amazon.com and Ebay.co.uk where in an item posted for sale is tried to be bought away from the seller through fraudulent mails. A copy of such mails has been added in the appendix. The mail is assumed to be sent from Amazon or eBay. However the address from which it is sent to is neither Amazon or eBay nor form a secured payment gateway like PayPal. It is a mail come from the fraud form an anonymous from the portal Europe.com or accountant.com.

This was an investigative task carried out in the month of May 2008 and support from Amazon and EBay were quite alert and responsive against such phishing activities and the immediate email alert to the user (Refer Appendix) like the mail in the appendix keeps the customer alert, safe and secure.

7.0 CONCLUSION

This report has clearly defined and explained the term of e-business system ant its processes. The electronic business system explained and described in theis report was Customer Relationship Management (CRM). The meaning and definition of CRM have been illustrated in this report and also a critical analysis of the system has been done in this report.

A critical analysis of collection and processing of information and how it helps improve the business has been illustrated in this report. This report also elucidated the key ethical challenges faced by user online on a e business system of CRM. This particular issue of phishing activities was investigated on a popular portal Amazon and EBay and the exchange of mails etc have been added in the appendix for a better understanding.

E business System and CRM are fantastic as a system process for our future generations. However it is very important to ensure in the name of technology customer privacy, safety and security shouldn’t be taken for granted. Utmost importance needs to be respected to ensure the financial transaction made of these systems is secure.

8.0 REFERENCES

Alter, S. (2002). Information systems: foundation of e-business. (4, Ed.) London: Prentice Hall.
Bradshaw, D. & Brash, C. (2001), Managing customer relationships in the e-business world: how to personalize computer relationships for increased profitability. International Journal of Retail & Distribution Management, Vol. 29, No 12, pp. 520-530.
Bizforum. (2000, January 1). Collaborative CRM. Retrieved May 4, 2008, from Bizforum: www.bizforum.org
Chaston, I. (2001). E-Marketing strategy. London: McGraw-Hill.
CRM Tutorial. (2008, January 30). What is CRM ? Retrieved May 2, 2008, from CRM Tutorial: http://crmtutorial.com/CRM/CRM.aspx
DINFOSYS. (2008, January 1). CRM. Retrieved May 2, 2008, from DINFOSYS: http://www.dinfosys.com/crm.htm
Dyche, J. (2001). The CRM Handbook : A Business Guide to Customer Relationship Management. London: Addison - Wesley Educational Publisher Inc.
ECT, Home of Commerce. (2008, January 1). E-commerce technology. Retrieved May 5, 2008, from ECT, Home of Commerce: www.e-ct.com
E-sales. (2004, January 1). Welcome to e-sales. Retrieved May 6, 208, from Esales.com: http://www.esales.co.nz
Information Week. (2008, January 2). CRM - Ethical Issues in CRM. Retrieved May 2, 2008, from Infromation Week: www.infromationweek.com
Johansson, J., & Sparredal, J. (2005). CRM in E Business. Lulea: Lulea University of Technology.
K-Solutions. (2000, May 31). e-commerc eEbusiness white paper 31 May 2000. Retrieved March 20, 2008, from http://www.k-solutions.com/library/whitepapers/e-commerceEbusinesswhitepaper31May2000.html
Marios alexandrou. (2007, December 31). CRM Definition. Retrieved May 1, 2008, from Mariosalexandrou.com: http://www.mariosalexandrou.com/definition/crm.asp
Netessence. (2003). B2C. Retrieved March 20, 2008, from Business Consultants Cyprus: http://www.netessence.com.cy/downloads/b2c.pdf
O Brien, J. (2002). Introduction to information System. London: McGraw-Hill .
PWEBS. (2008, January 2). What are the e-business ethical, legal and regulatory issues. Retrieved May 3, 2008, from PWEBS: http://pwebs.net/marketing/ethics/articles/internetethics.html
SmallBizCRM. (2008, January 1). CRM Definitions. Retrieved May 2, 2008, from SmallBizCRM.com: http://www.smallbizcrm.com/crm-definitions.html
Steven Denning. (2004, January 4). Quotations on knowledge- What great writers say about knowledge & literature. Retrieved May 4, 2008, from stevendenning.com: http://www.stevedenning.com/what_is_knowledge_management.html

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