What is e-commerce?

Appendix3………………………………………………………………………….18

Introduction/what is e-commerce

Whilst E-Commerce is seen as a quite recent technology, it is important to appreciate that it began to evolve in the only 1970's. The roots of modern E-Commerce are EDI (Electronic Data Interchange) and EFT (Electronic Funds Transfer) - technologies that are some 30 years old! It can also be said that Transaction Processing (with the use of ATM's Automatic Teller Machines) is also a form of E-Commerce. However, for many, it is the emergence of the World Wide Web and the Internet that signifies the beginning of real electronic commerce.

E-Commerce can mean different things to different people. One definition, from the Automotive Industry Action Group in North America is:

• "The application of advanced information technology to increase the effectiveness of the business relationships between Trading Partners."
• So E-Commerce is buying, selling or the exchange of products and services via computer networks
• “E-Commerce is wreaking havoc on traditional distribution philosophy, creating obsolescence for many conventional intermediaries and channels”, (Pamela Barnes Yieyra, Cindy Claycomb )

What e-Commerce can deliver:

E-Commerce can provide a number of benefits to both business and consumer a number of things are illustrated below:

• Providing a 'window' for a company's goods and services to be seen both nationally and internationally.
• General consumer services including entertainment, home banking, stock trading and home shopping.
• Health services such as remote consultation and the exchange of information between hospitals.
• Local authority services such as Education (distance learning), Leisure Services (facilities booking) and Planning and Transportation, citizens advice etc.

Who is interested in E-Commerce

What is perhaps most interesting about eCommerce is the key influence technology on the different function in any business such as on - marketing, finance, economics, management (including management of information systems), accounting and auditing, business law and ethics, psychology, sociology etc. etc….

Internet and E-Commerce

It can be argued that the provision of an electronic marketplace within the Internet has significantly improved the productivity and competitiveness of all participating companies regardless of whether they are suppliers or customers. The Internet provides access to an online global marketplace that operates on a 24/7 basis, with millions of customers and thousands of products and services. It also provides companies with new, more cost effective and time-efficient means for working with customers, suppliers and development partners. Internet based electronic commerce will enable companies to:

• Shorten procurement cycles through use of online catalogues, ordering and payment.

• Savings due to "just in time delivery" and "just in time manufacturing".  Cut costs on both stock and manufactured parts through competitive bidding. Reduce development cycles and accelerate time-to-market through collaborative engineering and product implementation.

• Gain access to worldwide markets at a fraction of traditional costs.

• Ensure product, marketing information and prices are always up to date.

After seeing the benefits of E-Commerce managers of SME’s have a decision to make about whether to broaden their customer base by embracing E-Commerce. Decision-making is the act of seeking and interpreting information and arriving at conclusions considering strategic issues. (E. Frank Harrison)

Problems facing e-commerce managers (three case study)

There are a number of problems facing E-Commerce managers a number of which are examined below:

Lack of website designers

In the case of ask the builder; Tim Carter lack of web designing delayed his responds to customer’s queries so he had to seek some professional consultations, which developed his skills in web designing.

Handling customer queries

Customer base was rising by time through promotional activities and word-of-mouth. However, this rise in customer base reduced time and services devoted to each customer.

Increase in inventory level

A large number of items offered online raised the level of inventory, which consumed more time.

Weak website quality

If competitors provide websites with a better quality and word-of-mouth can impact negatively on a business customer base.

Lack of professional mangers

Between every sale and production line there should be a managerial line to coordinate customer’s orders specification and production.

Delivery delay

Quality of the product establishes customer loyalty, but no matter how good the product is customers will not accept delays in delivery unless it is a monopoly market!

Poor business image

Delivery delay and poor product quality can generate a negative impact on the product demand.

Financial crises

Delay in delivery have a “Knock on” effect on the invoicing process which may create cash flow problems in the short term which if not addressed will create financial crises in the long term.

Method of Approach

In order to conduct an initial analysis of the case studies, we merged the problems and desired objectives of the three case studies. Five different phases were used to approach a clearer understanding of the problems.

Intelligent phase:

During this phase, activities to be conducted included:

• Reading the case studies.
• Understanding the relationship between all variables and how a change in one could have an effect on the other.
• Going through the Stella 7.0.2 User guide and learning its use with hands on laboratory sessions.
• Conducting various exercises to see the behaviour of Stella under different conditions.

Design phase:

During this phase, activities to be conducted included:

• Drawing an “Influence Diagram”.
• Identifying the deferent sectors that are common in the three case studies.
• Placing the variables in the right sectors.

Choice phase:

During this phase, activities conducted included:

• Making changes to the model, if results were not as expected.
• Adding variables, which were not considered previously but were relevant to the case studies.
• Reviewing the model on a continuous basis so it becomes an accurate reflection of reality.

Implementation phase:

No activities were conducted in this phase, as the whole exercise was to create a Learning Laboratory (Micro world) to aid decision support analysts and e-commerce managers in decision-making.

Reality:

All of the above phases fed back into the “reality” sector. The aim was to compare each activity with the real life scenario, so that we did not side step.

In order to achieve this, regular guidance was sought from DSS experts at the university.

In addition team meetings were held on a regular basis between all members, to discuss the case study and to make sure we were heading in the correct direction.

Project plan

Resources

• Good knowledge on STELLA
• Extensive research on similar e-commerce problems
• Internet surfing to visit website related to our case study i.e. ask the builder. http://www.askthebuilder.com

What is to be achieved?

Arrive at a solution model to assist e-commerce managers to provide:

• Better customer services
• More sales to gain higher turnover
• Be able to handle high order rates
• To maintain inventory level with high customer base

Risk management

Risk Assessment Checklist with Probability and Impact

Decision-making process

The components of the decision-making process are the functions of decision-making.

These functions are:

Setting managerial objectives.

E-commerce managers in the related case studies they did not sit managerial objectives when establishing their e-commerce business. In fact, they resolve managerial issues as they arise.

Searching for alternatives.

In order to control the cost of IT staff, e-commerce managers could have employed a hosting company to update their website. Alternatively, courses on web designing are available in a short period of time. Surfing the net for similar businesses would give a good picture on how competitors handling their e-commerce.

Comparing and evaluating alternatives.

Conducting customer satisfaction surveys will allow business to take on board customer’s feedback and make revisions to products or services in line with clearing customer demand.

The act of choice/ Implementing the decision.

E-Commerce managers should be aware that decision need to achieve the satisfactory results in long run might involve poor short performance. And decision made will have to be balanced against the lifecycle of the product and the perceived sustainability in demand.

Follow-up and control.

If a decision was made to raise order rate in response to customer demand, inventory levels should be monitored. This function is intended to ensure that the implemented decision is controlled and remains consistent with the intended objectives. Any course of action must be flexible enough to be changed in the face of demand.

 The process and issues perceived by the team.  

During the initial group meeting, we assessed our own experiences and mapped out the requirements of the project. After our goals and time line, based on our schedule had been established, we were able to make a draft task plan of the project.

Task Allocation

• Al-fughom          Writing up the report and contributed in building up the model

                                    And analysis the extent research

• Liao                     Writing up the report and sharing ideas in the model

                                    And analysis the extent research

• Bjssessur             Mainly building up the model and shared ideas in the report

                                    Also finding the extent research

Description of work done on each task

Plan for the report

After the first few meetings our group members came to an agreement of that my colleague Bader and I would be responsible of writing up the group report, and we have also plan out for the contents and some of the research fields. In addition it was agreed that we would be contributing the STELLA model and the extent researches.

The group did not experience any major problems during the research of the report since that internet was of particular help not only for deriving information required for the project, but also for helping us find new facts, many new articles and different statistics which otherwise we might not have come across.

Build STELLA Model

All the members in our group contributed to the building of the STELLA model but our colleague Bjssessur was the driving force behind the building of the STELLA model due to his superior understanding of this software package than others.

Although our group faced some major problems using STELLA to build up the Model at the beginning. Bader and I were proficient in the use of STELLA before the course and we decided that some form of training would be required for all of us. We found the tutorials and the online guide to STELLA provided on the course website to be very useful. Offering a complete step-by-step guide to the software and allowing us to getting start of building the model.

Problem Perceived

During the process of building the model, we came across a major problem. None of us have any right idea of setting up the equations and we also weren’t too sure about the units as well. To solve these problems we visited our tutor and discussed about our problems with him from time to time and he was very pleased to help us to solve the problems.

Test The Model

This was one of the more technical aspects of the project and required the team member with the most technical skill to execute. We had some difficulties in running the model and using it to create the diagrams, and we spent a considerable amount of time just try to get it to work. With further help from our tutor we eventually got the model running correctly.

Finalize And Delivery

Any last minute issues would be resolved in this part of the project. Final touches to the report, printing etc.

Communication Strategic

We agreed to have at least one meeting per week, but two when possible; on Monday and Tuesday evenings, as most members would not be available on other days of the week.

Problems and Solutions

Problems were encountered at various stages of the project and were resolved as they occurred. At the testing stage there were problems with running the model and these problems were resolved by Bjssessur.

References

1. Foundations of strategic decision effectiveness.

E. Frank Harrison, College of Business, San Francisco State University, San Francisco, CA, USA.

Monique A. Pelletier College of Business, San Francisco State University, San Francisco, CA, USA.

2. Revisiting strategic decision success.

E. Frank Harrison,  San Francisco State University, Napa, California, USA.

       Monique A. Pelletier  San Francisco State University, Napa, California, USA.

3.    A paradigm of strategic decision success.

       E. Frank Harrison and Monique A. Pelletier

4.     A Process prospective on management decision making

        E. Frank Harrison Professor of Management, San Francisco, State University, USA.

5.    Levels of strategic decision success.

       E. Frank Harrison  Professor of Management, San Francisco State University, USA.

       Monique A. Pelletier Professor of Management, San Francisco State University, USA.

6.    Strategic determinants: The context of managerial decision making

Roland H. Simons and Briony M. Thomson.

School of Applied Psychology, Griffith University, Australia.

7. Managerial attitudes towards strategic decisions: Maximizing versus staisficing outcomes

       E. Frank Harrison College of Business, San Francisco State University, California, USA.

        Monique A. Pelletier  San Francisco State University, California, USA.

8. The impact of third parties on strategic decision making.

Todd Saxton, Department of management, Indiana University, Bloomington, Indiana, USA.

9. IT and strategic decision making.

Lisbeth Hedelin Department of psychology, Goteborg University, Sweden

Carl Martin Allwood. Department of psychology, Lund University, Sweden

10.   A group decision support system for strategic alternatives selection.

Alberto Carneiro University of Lusofona of Humanities and Technologies, Lisbon, Portugal.

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