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Internet is a technology that provides global network and has become an unavoidable concept in the last few years. This technology which started as a basic tool within military, government & university operations has exploded into a world class communication medium and has become the backbone for organisations. Businesses are exploiting this technology on a large scale and implementing it widely in all their functional processes (Aguiar & Oliveira, nd). In this report we touch base on the aspects of gaining competitive advantage, limitation and management issues relating to the technology of internet. The information has been gathered through search on various websites and AUT library database and all citations have been referenced appropriately.
Management or Implementation Issues
Major management issue for most organisations is to understand the percentage of assistance required from Internet technology. Management needs to understand the structure of the organization, nature of the business, employee skills and customer database. Alignment should be based on company goal and future requirements rather than generic reasons (Schwartz, 2008). Closely associated to the alignment problem is the issue of organisational culture. Considerations have to be made on how the culture of the company can be managed with the ever-rising technology of the Internet. Technology is moving at a rapid pace but it is important for the staff to understand the relationship between the use of advanced technology and organisational benefits. Management need to have a clear understanding of organisational goals, value and business plan to all stakeholders. Implementation and sophistication in one office is difficult to be transferred across national borders due to cultural implications (Haynes, 2002). Staff training is also a management issue due to the rapid development of new technologies over the Internet. Another major issue for management is the loss of personal relationships. Lack of human touch may not allow the employees and customers to develop a rapport that may erode emotional attachment. Research indicates customers are loyal and perceive less risk in a face-to-face interaction as compared to interacting online (Colgate, Buchanan & Elmsly, 2005).
Another major implementation issue has been the amount of employee access to the Internet. As Internet is a great source of communication, staff access needs to be controlled to increase their productivity at work. Employment records and criminal history has to be processed before recruiting new staff.
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Finally the security issue needs to be identified here by the management. Outside offenders are constantly trying to gain inside knowledge through the Internet and thus organisations need to have effective systems implemented (Aguiar & Oliveira, nd).
Define Organisation’s Internet Strategy
The Internet serves differently in different type of organisations. It can be a marketplace, an information platform, a customer service channel, a management approach or a combination of these. It depends on the strategy of the organisation. In this part we are going to discuss how the Internet can serve an organisation and be exploited to enhance an organisation’s competitive advantage.
Firstly the organisation must define its strategy of using the internet. Different purposes of using the Internet will lead to different types of websites. A commerce organisation should design its website based on market view. A news agency better makes use of its websites as an information platform. Banks need to have user-friendly and customised online banking websites. Internet can also serve as an internal management facility since all executives and employee can easily access to this channel without meeting face to face.
Build up an Effective Website
The website must be designed and built to work for the organisation’s strategy. Basically there are two essentials of an effective website, attractiveness and meeting the needs of visitors.
Technologies that an organisation could choose to “enable the Web to deliver rich information” (Oz, 2006) are HTTP, HTML and XML, FTP, RSS, Blogs, podcasting, Instant Messaging, Cookies and proprietary technologies.
The organisation can choose to own and maintain a server to build the website with its own IT staff or outsource the service from website hosting service or storefront broker.
The organization should register a domain name related to its business, and include a Meta tag to make the website search engine friendly so that people can easily find the website when not knowing the address.
If the website serves the organization for its global strategy, the website should be able to adapt to the local culture and language to the target market.
Internet in Supply Chain
Internet has helped to speed up the goods and information flow between manufacturers, distributors, retailers and customers. By connecting Supply Chain Management (SCM) Systems to the suppliers and buyers, organisations shall be able to better plan the demand, control inventory and fulfil demands more effectively and efficiently. It helps organisations to reduce the risk of under or over stocking inventory levels and thus reduce the investment. XML technology is widely adopted as it enables the data exchanging the SCM systems of two organisations can be stored in databases at the same time.
Besides, many of online organisations outsource the order fulfilment to specialised delivery firms. By linking the SCM systems with the delivery firms’ service system, fulfilment can be made much faster and efficiently, thus shorten the business cycle. “A shorter business cycle is not only important for customer satisfaction but also enables the company to collect faster because credit cards are usually charged upon shipping.” (Oz, 2006)
Internet in Marketing and Sales
Organisations can use Internet to facilitate marketing and sales efforts in tailoring the webpage to specifically target individual customers. By using Customer Relationship Management (CRM) software, organisation can use its websites to collect information about customers like behaviours, preference, hobbies, purchasing patterns, etc. in an easy way. The information can be categorised and stored in the database which is then linked to the website. Then the webpage can be tailored and personalised in different categories according to the customer’s profile. So when the customer logged in the next time, a personalised webpage will show up before the customer.
Marketing and sales efforts can also reach the customer by emailing to inform the customer about special offers that the customer might be interested in.
These enable the organisation to meet the needs of the customer more efficiently and effectively and also increase the satisfaction of the customer the likelihood of repeating visits.
The Internet also enables the travelling salespeople and regional offices to communicate with the organisation’s information system more effectively. By using laptops or Personal Digital Assistants (PDAs), salespeople or field representatives can obtain the inventory status and update promotion activities, provide the product and service information more specifically to the customer. Global organisations thus can improve the sales productivity more efficiently.
There are always risks of operating the business on the internet. The organisation must safeguard its website to protect itself from malicious attacks, such as denial-of-service and hijacking. So the organisation shall be prepared in assess control and data backup. For example it can adopt a digital certificate to identify a sender. Organisations also need to have recovery measures in place to prepare for disasters, some of which cannot be prevented.
Organisations shall also take the responsibility of the security for customers. The main elements are identification, encryption and safeguarded transactions. Sensitive data such as credit card and banking information of customers must be protected. Organization can use Secure Socket Layer communication protocol to protect such data exchanging. E-cash, e-wallet, and smart, credit, charge and debit cards are options for the payments. Customers always choose the safer websites to shop or do business. Organization need to be more considerate in providing payment options.
Communication- Managing the end to end services or resources for a business enterprise over the internet can involve issues around performance and cost. Some low cost solutions such as IP-SEC based internet VPNs that connect office sites provide unreliable replacements for a WAN. Although unpredictable performance may be fine within a home environment in terms of end user browsing it is not for real time services such VoIP that a business will rely on e.g. break ups of voice over an IP call when using services such as Skype due to packet loss and VoIP software subsequently trying to interpolate the gaps. (Technologyinside.com, 2007)
Another problem in communication over the internet is delay and if the delay is over 180mS then distortion becomes very noticeable and speech unintelligible. If you compound this with packet loss then calls will be even more unintelligible. We don’t expect speech over the PSTN to be distorted or unintelligible and telecommunication companies have standards in place to prevent this from occurring.
Video conferencing is another potential limitation in terms of performance as per the above packet loss and delay reasons mentioned above. Email s also required to be delivered in real time and not held up on servers.
Speed – The speed in which data is transmitted across the internet is dependent on the bandwidth of the channel or more commonly referred to as the pipe. Telephone companies around the world have for a number of years been developing digital subscriber lines (DSL) with various degrees of investment. Here in New Zealand Telecom NZ have been the monopolistic company that has shaped the network that we have here in New Zealand today as all fixed line communications at some point interface with their network or in other words the cables in the street. The inherent limitation for internet speeds using DSL over a copper network is distance from the DSLAM located in the telephone exchanges. Another issue are multiples or bridges on the circuit that cause reflections to the signal. In a business environment it may be awkward to have employees working from home if they are unable to make use DSL as a means of communicating as other methods such as ISDN or 2Meg data become more expensive in comparison with broadband.
Aguiar, R. L & Oliveira, J.L (nd). Issues of Internet Evolution & Management. Retrieved May 31, 2008, from http://www.av.it.pt/ruilaa/papers/be2000/iceis_1999.pdf.
Colgate. M, Buchanan, M, E & Elmsly, R. (2005). Relationship Benefit in an Internet Environment. Managing Service Quality. 15 (5), 426-436
Haynes, J. D (2002). Internet Management Issue: A Global Perspective. Retrieved May 31, 2008, from http://books.google.co.nz/books?hl=en&id=1UW7Y6zj17wC&dq=management+issue+and+internet&printsec=frontcover&source=web&ots=0UCeambdSJ&sig=o8hQEgJh2uC5Df91o4AvpeGS0zg#PPP1,M1
Oz, E. Management Information Systems, Thomson Course Technology, 5th ed., 2006
Schwartz, J (2008). Should KMS Embrace Open Source Software: Harvard Business Review.
Unknown. (2007). MPLS and the limitations of the Internet. Retrieved June 2, 2008, from Tecnologyinside.com