e-business systems- Competitive advantage

E-business involves all commercial activities, a dynamic set of technologies, applications and business processes performed across computer platforms that link organizations to their customers, suppliers and other business partners through electronic exchange. (Indrit Troshani, 2007)

The exponential growth and rapid changes of e-business technologies bring forth new opportunities and challenges to businesses. The underlying technologies of e-business solutions such as data storage, processing and transport are becoming increasingly indistinguishable and are susceptible to commoditization. (Indrit Troshani, 2007)

 Investments in e-business are a competitive necessity rather than a source of competitive advantage. Value will be added only when e-business applications can be harnessed to achieve organizational goals more effectively and efficiently than competitors. Gaining competitive advantage depends on the extent to which e-business applications are aligned with organizational goals (Indrit Troshani, 2007)

E-business advantage framework components

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·         Alignment between e-business and overall business strategies: - This alignment is difficult to replicate as both e-business and overall business strategies are likely to evolve uniquely for each organization.

·         Inter-organizational linkages: - Linkages to facilitate complex interactions and collaborative relationships between organizations are most likely to be unique, and therefore, more likely to survive competitive imitation.

·         E-business integration with business processes :- Innovations in business practices and their integration with e-business solutions are likely to be organization specific

·         Organizational agility: -   E-business application can facilitate significant alterations of leadership styles from coercive or directive to consultative or collaborative which are likely to result in different levels of organizational agility.

·         Management Commitment and support: - It has potential to distinguish from successful and unsuccessful e-business investments.

·         Interactions between IT professionals and e-business application users-Patterns of interactions between IT professionals and end-users are different in different organizations and constitute an opportunity for asymmetric distinctiveness across organizations.

·         Organizational Culture: - Key source of enduring competitive advantage as it creates a climate for either encouraging or discouraging risk-taking or experimentation with e-business solutions.

·         Intellectual resources: - Organization specific interpersonal relationships, application development, technology integration skills, corporate –level knowledge assets and managerial human resources become difficult to acquire and highly complex to imitate by competitors.

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E-commerce is one of the most popular forms of e-business. Some of the big Internet companies are highly competitive to the brick and mortar stores. There are a few strategies that have allowed e-commerce to reach the masses:

1. Subscription-based commerce- Consumers no longer have to go to the store. Instead, they can easily get access to their favorite items right at their doorstep. Dollar Shave Club has had much success with this type of model. Knowing that many men shave on a weekly/monthly basis, men can get high-quality razors at a reasonable price without going to the store.

2. Mobile commerce- Most consumers have a phone; therefore, it would be wise for a company to be able to reach a company via mobile application. "Mobile commerce is growing at a rate of over 130 percent annually" (Evans). Many banking companies have made apps; however, Wells Fargo seems to know what customers want. "Anything to enhance the customer experience is key because it can be the difference between keeping the customer or having them go to a competitor" (Needle).

3. Internet-only merchandise- Without going into the store, some companies have been able to grab consumers' attention via the Web. Dell was one of the first companies to integrate ecommerce in their sales process. (NetonomyNET). It was not just about the company's ability to provide computers online; much of Dell's success was due to its innovation of customizable computers. Either way, the company was able to provide a unique approach to e-commerce.

Works Cited

Evans, M. (2014, January 16). 12 E-Commerce Strategies To Grow Your Business This Year. Forbes. Retrieved June 30, 2014, from http://www.forbes.com/sites/allbusiness/2014/01/16/12-e-commerce-strategies-to-grow-your-business-this-year/

Needle, D. (2013, November 13). Wells Fargo has over a million iPad app customers for online banking. TabTimes. Retrieved June 30, 2014, from http://tabtimes.com/news/finance-insurance/2013/11/13/wells-fargo-has-over-million-customers-only-use-tablets

Top 5 Largest Online Retailers - Who Are These Companies And How Did They Make It To The Top?. (2013, January 30). NetonomyNET. Retrieved June 30, 2014, from http://netonomy.net/2013/01/30/top-5-largest-online-retailers-who-companies-how-did-they-make-it/

Indrit Troshani Enabling e-business competitive advantage [Online] // knowledgetaiwan.org. - 2007. - http://www.knowledgetaiwan.org/ojs/files/Vol2No1/4_Enabling_e-Business_Competitive_Advantage.pdf.

Business Intelligence Systems

These days, companies can not rely on certain reports to run their business. Instead, some companies have resorted to business intelligence systems to help them. It is "a process for analyzing large volumes of data within companies, usually stored in data warehouses to determine patterns and trends which are applicable to make the best decisions for the company’s growth." (Bucur, 2012)

A BI system facilitates a company to streamline business, reduce costs and identify new business opportunities by :
-Eliminating uncertainty – ensuring accurate data, providing real-time updates and overviews, trends and forecasts to take informed decisions

·         -Rapid provision of information – hence reducing the time to study large volumes of information printed

·         -Easy access to economic indicators anywhere, anytime – provide sales and marketing personnel critical data on mobile devices

·        -Determine crucial areas of profitability – Identification of class of customers and markets

·         -Improve decision making and identify potential/deficient market segments

·         -Determine key performance factors

·         -Analyze large amounts of historical data to identify trends that may affect business

Most users use 68% of the reporting capabilities of a BI system. There is a downward trend in the use of ad hoc reports and a growth trend in interactive-visual solutions that will most likely be increasingly deployed in the coming years. 

User perceptions on the benefits of implementing a BI system. (Bucur, 2012)

Graphical data visualization of retail sales
Business users will most likely place emphasis on different features or functionalities than IT users, and those features will drive BI purchase trends. Business users value data visualization as it allows them to promptly to identify issues, patterns, outliers or trends and take pre-emptive and necessary action without having to manually search through heaps of data.   Users can see the business overview and minimize human errors and save valuable time. (Santosh S Venkatraman Alicia M Brooks, 2012)

Dashboards

Dashboards display summary data graphically so it can be consumed at a glance and features such as drill down links and filters allow business users to view detailed metrics. Data discovery tools are very expensive considering the cost-per-user but are popuar due to easy user interfaces and great benefits. (Santosh S Venkatraman Alicia M Brooks, 2012)

   

Current trends in business intelligence- Spatial Visualization

 GPS combined with power of business intelligence analytics –users can visualize events given any geographical location. The figure below depicts the number of customers for a particular business stacked up in different cities in texas, and it also shows the distance and direction of customers from the factory. (Santosh S Venkatraman Alicia M Brooks, 2012)

Customer data in Spatial Visualization

A fine example of successful spatial visualization use would be competitor analysis. Mapping new, remodeled, or relocated competitors facilitates an organization to quickly identify locations that will potentially be affected by incoming competitors. Organizations gain lead time to implement effective strategies within the impacted areas and mitigate negative impact.  Oracle has incorporated special visualization into its popular business intelligence 11g platform. (Santosh S Venkatraman Alicia M Brooks, 2012)

Spatial visualization that measures units and variable sales of a particular set of products in a manufacturing organization.

Costs 

Boris Evelson discusses the costs associated in Business Intelligence, and his best and only real answer is "it depends." (Evelson, 2011) Although he risks the idea of oversimplification, Evelson suggest that since every BI is unique to an individual business due to the "scope, requirements, technology used, corporate culture and at least a few dozen of more dimensions," in many cases we can often apply the good old 80/20 rule. The following is a breakdown of his analysis: 

Components

• ~20% for software, hardware, and other data center and communications infrastructure
• ~80% for full time employees, outside services (analysis, design, coding, testing, integration, implementation, etc), new processes, new initiatives (governance, change management, training)

Initial software costs (~80%) vs. Ongoing software license maintenance costs (~20% / year)

Direct (~20%) vs. Indirect costs (~80%). Here are some examples:

Direct ~20%

• Data integration for reporting and analysis
• Data cleansing processes for reporting and analysis
• Reporting and analytical data bases such as Data Warehouses, Data Marts
• Reporting / querying / dashboards
• OLAP (Online Analytical Processing)
• Analytical MDM (Master Data Management)
• Analytical metadata management
• Data mining, predictive analytics
• BI specific  SOA (Services Oriented Architecture) or other types of EAI (Enterprise Application Integration)

Indirect ~ 80%

• Data integration for operational purposes
• Operational databases (ODS)
• Operational data quality processes
• Portals
• Collaboration
• Search, knowledge management
• Operational master/reference data management
• Operational metadata management
• Performance management (scorecards, metrics management)
• Text mining / text analytics

Initial Design and Build of Data Integration (ETL, quality, DW, MDM, metadata, etc) (~80%) vs. Reporting and Analytics (~20%)

Ongoing support of Data Integration (~20%) vs. Reporting and Analytics (~80%)   (Evelson, 2011)

Cultural Issues

Howard Dresner, who created the phrase Business Intelligence in the 1980’s states overcoming cultural obstructions are just as important to the successful outcome of any Business Intelligence project, if not more important than any other barrier. To ensure the success of any BI project, Dresner states “companies need to develop a performance-directed culture, one in which business and IT work together.” (Tech Target, 2009)

By culture Dresner meant “people and groups of people - their beliefs, motives, attitudes, organization, customs, processes, etc.” Transparency, accountability, and constructive conflict resolution are the keys to a performance based culture and the most successful organizations are able to sustain this culture. (Dresner, 2009)

The cultural aspects of information use are extremely important for Business Intelligence. If people are giving incentives to use information, whether information is hoarded for power, which individuals are responsible for maintaining the information, financially how it impacts people’s bonuses, and how the people involved in providing information to the business are organized. (Elliot, 2014)

Implementation Issues
Although business intelligence systems have become easier to implement, there are still many implementation issues that companies need to look over before selecting a business intelligence system. The purpose of a business intelligence system is to use the company's data and transform it into reports/metrics that are meaningful. First, a company has to understand what they are trying to accomplish and state their goals.
Without having an objective, the company could easily being spending tons of money for a system that is not fulfilling its purpose. Implementing a business intelligence system is costly; therefore, a company must be swift in order to "access information that could give them a competitive edge over the rest of the field" (Thelwell, 2014) Purchasing the system is not the only issue. In addition to that, the company has to deal with other costs such as "installation, hardware, consultancy support and additional staffing requirements" (Thelwell, 2014). It is key for a company to think about all of the costs that are involved in addition to the cost of the actual system.

A company's goals and objectives go hand in hand with the implementation of a business intelligence system. When installing this system, the company needs the correct infrastructure so that the system is working properly. Quite often, a company seeking a business intelligence system does not hold a strong enough infrastructure; therefore, more money has to be invested into the project. Not only that, additional costs and time are needed to train employees.

Lastly, security is a huge concern. Companies are hesitant to implement to move to business intelligence systems because so much data, confidential information for that matter, is being moved in high volumes.

Works Cited

Evelson, Boris. (2011, March 1). Does The Good Old 80/20 Rule Work For Estimating BI Costs? Retrieved from Forrester: http://blogs.forrester.com/boris_evelson/09-02-03-does_good_old_8020_rule_work_estimating_bi_costs

Bucur Cristian Implications and directions of development of web business intelligence systems for business community [Online] // http://eds.a.ebscohost.com.ulm.idm.oclc.org. - 2012. - http://eds.a.ebscohost.com.ulm.idm.oclc.org/eds/pdfviewer/pdfviewer?sid=caf042a4-2b10-4f35-840a-5768d1c0dcb6%40sessionmgr4001&vid=3&hid=4105.

Santosh S Venkatraman Alicia M Brooks Quest for business intelligence [Online] // http://eds.b.ebscohost.com.ulm.idm.oclc.org/. - march 2012. - http://eds.b.ebscohost.com.ulm.idm.oclc.org/eds/pdfviewer/pdfviewer?sid=c51acc11-99c6-42fc-8efb-f5539c697626%40sessionmgr110&vid=3&hid=109.

Dresner, H. (2009, june 15). It's all about culture - a glimpse into my new book. Retrieved from Business Intelligence: http://businesssintelligence.blogspot.com/2009/06/its-all-about-culture-glimpse-into-my.html

Elliot, T. (2014, 4 29). Q&A: Self-Service vs Traditional Business Intelligence. Retrieved from Business Analytics: http://timoelliott.com/blog/2014/04/qa-self-service-vs-traditional-business-intelligence.html
Implementing Successful Business Intelligence Projects: What the 2014 World Cup Can Teach Us. (n.d.). RSS. Retrieved June 24, 2014, from http://smartdatacollective.com/matillion-limited/204506/implementing-successful-business-intelligence-projects-what-2014-world-cup-

Tech Target. (2009). For business intelligence success, culture counts as much as technology. Retrieved from Tech Target: http://searchbusinessanalytics.techtarget.com/podcast/For-business-intelligence-success-culture-counts-as-much-as-technology