Very often managers are overwhelmed by information about all kinds of new technologies. EDI (Electronic Data Interexchange), leased lines, intranets, extranets, World Wide Web, email, networks security, virtual private networks, messaging, surfing, browsing, lite-EDI, encryption, PKI, TTPs, ISPs, merchant servers, mulit-media, hotlinks, standards, open systems, firewalls, integration, forms-based EDI…The plethora of options, solutions and jargon can be an impenetrable jungle or a dangerous minefield! The media reinforces the idea that they should invest more into IT, and quickly. The offer in terms of hardware and software is immense. Advertising on each feature can be read in every professional magazine. Executives that are unable to invest more, probably feel bad. Not surprisingly, one can find quite the same pressure in the consumer market to buy CD ROMs, computers, mobile phones, etc. The European market has probably inherited this from the American marketing culture. This implies that there is no need to wait until the market has a new need. Companies should use the “push” solution. We understand by “push” strategy, the fact that companies use all marketing tools to constantly advertise about their products and therefore push them to the potential clients. This is quite new in Europe and managers can so often hear about new technologies that they become worried about no using them. However, we can pretend that the most important thing is to take into account the need of all market players (organisations, companies, households, communities, administrations etc.) that will be involved in the building of the networks (Internet) in the long run. Whatever the combination of technologies suited to your organisation, electronic commerce represents a business opportunity. In other words, what do people and companies expect, and what are their needs?
One year ago, which in the Internet age is a virtual eternity, IBM launched its new electronic commerce concept. Even though quite successful, with a clever name, the concept ‘e-business’ hasn’t become relevant in most managers’ minds. According to 01 Informatique from January 1999, only 6 % of the managers asked in a survey[26] lead by the Big Blue knew e-business was related to electronic commerce and the extranet technology. 54 % of the people must have seen the advertising, because they assumed e-business had something to do with economic development or e-mail. 30 % said they would wait for a long time before starting such activity. The conclusion we can draw from this survey is the following if this advertising was clear about the fact that e-business is an electronic commerce solution: a large number of managers don't have the time to understand electronic commerce challenges and the existence of an emerging electronic market. Most managers think that Internet is a wired media to advertise and the other half think it is a supplementary distribution channel. The first need in the area of new technologies is not to be overwhelmed byIT (Information Technology) offers. There are just too many solutions, which can be used by companies to address their needs. Of course, managers could try to follow IT evolution but this high-tech environment quickly becomes complex and managers, especially SMEs managers, are having difficulties in finding the time to understand it all. Some others do not want their company to focus on IT and consider, and rightly so, that IT is only a support tool and not the aim of their company. In 1997, M Xavier Goût, Head of computer department of UAP, an insurance company in France, said, “in the past 30 years, I have seen enormous break-throughs in technologies which were said to be revolutionary and which were supposed to affect the whole society. If we had given way and followed the fashion, we would have changed the whole company's organisation and computers every four years. In the end, however, what we do is insurance contracts, we are not an IT company with extraneous insurance activities.” Source: 01: Informatique 1998. This point of view is extreme but must nonetheless be taken into account.
The first step towards a successful project is, without a doubt, the manager’s ability to understand both the challenges of the information society and the current situation of their own company within it. Only then can a strategy be selected for investment in IT networks. Clearly, this need is tied to the education level and experiences of the manager. Managers working in the field of technologies where computer systems and evolution are commonplace should be able to foresee new trends.
Even if managers cannot possibly transform their office into libraries, they should try to organise themselves to get accurate and compendious information even if it has a cost. A good way is to use precise information on the web.One must find out the best web sites (related to the activity of the company)in terms of content and apply to newsletters[27]. This would relieve managers of sifting through the same kind of information every day. Concerning such sources, one of the best in France is surely the review "le journal de l'Atelier" issued every three months by one of the largest banks: Paribas. Branch meetings never sound very interesting to managers but considering the current shift of the economy through IT, they should maybe try to meet other managers of the same industry to discuss this issue. If the traditional structure at their disposal is not enough, they definitely should not stop there. In terms of electronic business for example, more and more associations are being created such as the IICE[28][29] and the E-centre[30] in the United Kingdom. Another way of meeting people and sharing ideas can be the use of forums[31] on the Internet. They are not easy to find, but once you have one contact, you can easily discover several others. Depending on what extent people can share ideas, the result can also develop into a new community with similar objectives. Eventually, managers have to take some time out of the company for specific training, viz., use of IT, information systems, and networks in the field of their activity.
Once the manager has been convinced that there is truly an emerging electronic market, that this technology is not extremely expensive, and that it might be relevant to acquire new skills in this domain, the second step towards action is the search for venture capital. Of course, SMEs and MNCs don’t have the same difficulties in that matter. However, one should really try to understand the differences between the way financial support can be found in the USA and in Europe. One thing is that the biggest market, the stock-exchange, will provide almost any company with a sufficient capital to start a business, no matter its size. The main characteristic is the speed at which it is possible to achieve this goal. It is said, for instance, that in California you can start a business within 24 hours. In France, the situation is slightly different. It is not that easy. Nevertheless, just as in many other countries in Europe, the government is involved in the market. This, in terms of IT brings two different kinds of opportunities for entrepreneurs. The first one resides in public calls for tender, to organise the web sites of the government for example. The second one resides in the fact that companies, especially SMEs can receive financial aid. The DRIRE[32] is one of the French government organisations that might support projects. Companies can search for such subventions at two levels: from their country of origin, and directly from the European Commission. It is possible to get a guide of all financial aid in France at : www. Edifrance.asso.fr. The main objectives for companies is to understand the costs implied by IT projects and how they can calculate their return on investment.
The use of information technology can suffer from the background of data processing projects. In the past, the work of programmers was not very easy to manage. One had to be able to understand all constraints of their job. Projects were totally in charge of the computer department whereas now, projects are more organisational and all market players, at least within the company, are implied. In the past programmers themselves had difficulties just delivering a new application on time. In the end, even if the project was successful, nobody ever tried to understand exactly the whole cost (investment and running costs) of it and its return on the initial investment. Sometimes the investment costs of the project would be unexpected, even if reasonable. The side costs like maintenance, however, would end up being far higher than expected. This background has had a strong influence on the current IT projects. In the end, managers are not sure about what can be performed because they still have problems understanding this technology which now is further complicated by network issues. It gets even more confusing with other unrelated computer problems such as the year 2 000 bug or the impact on the accountancy system of the Euro currency.IT finally ends up being a threat. In this condition, it is difficult to have managers think clearly in this electronic market, understand the challenges and finally decide to invest in electronic commerce. According to IBM, the computer budget division in Europe is the following in terms of priorities after investigating among managers.
1
Budget to adapt the company to the new Euro currency
2
Budget for the year 2000 issue
3
Decision support tools
4 Internet
IT still is considered to be a cost for the European managers, whereas American executives consider it as a strategic investment.
A solution could also be to recruit managers that understand the technology even if they don’t master it.Such managers will at least be able to plan and calculate the ROI (Return On Investments) on the use of IT.Indeed, in the past years investment in web sites did suffer from lack of visibility of outcomes. Since transactions are now possible on line, however, companies are able to sell and attribute a new budget to IT.
Example of the opportunity company have to control money spent on-line for advertising: With common media can you measure the spending in terms of advertising for a new buyer?No, but on the net you can:
In the US, one banner costs currently $35 CPM (cost per thousand page views) on an average web site. Then it is easy to evaluate the CTR (click trough rate) to determine how many people actually click on your banner. This rate has fallen recently according to www. Business-village.fr from 2 to 1 percent for most sites and 4 to 10 percent for commercial web sites which seem more attractive because people can buy on line.Let’s take the example of 5 % of CTR. It costs $7 of advertising to bring one person into the commercial web site. Typically, while they are visiting the shop, there is an attractive questionnaire to register people and a large number of visitors do it. This can help to follow their journey on the site and understand why some sites are successful in leading to a sale while others are not. Finally, one can calculate the number of visitors that “transform” into buyers. If there is one percent (which is good), the advertising will have cost $14 for one buyer for the first sale.
There is no way with traditional media you could ever count the number of persons that actually did listen to the company’s advert on radio, how long, and if they finally decided to drive to your shop, enter it, and see what kind of products they were interested in and what there address is. These kind of measuring methods should boost the will of managers to invest, knowing that each time they can see the exact financial result of the action. No more need to walk further in the fog.
Another way of financially controlling a project is to use information system management specialists. These consultants should be able to manage the programmers work well. They usually start by mapping all activities within the concerned department. Every single task and its use or not of computer tools (database..) should be described. Then, the average length of time will be measured and, according to the skills and salary of the people involved in this process, we can evaluate the average cost of each one. As soon as all task mapping is performed, then all task successions are linked and studied.
For example, you can see on the map what happens when a client calls to order one product. It is possible to follow the “journey” of the work performed to answer its need. This work being completed, all inefficient or logical “journeys” (exchanges of information) become obvious. At this stage, it becomes easy to make a proposal to the company in terms of workflow reorganisation and IT implementation and then describe exactly how the task’s successions will be improved and therefore more rapidly performed. IT consultants then have a high level of understanding of the company’s workflow. Eventually a difference can be calculated between the two situations: before and after. Information systems are one of the best ways to have a global understanding of the company and they should be used to perform such financial control.
Companies used to evolve in a very steady environment. Work or tasks used to be very specialised. Most companies used to have all their human resources in the same place, busy at the same time. Times have changed. Companies now have fewer hierarchical levels, fewer separated departments, more project leaders, and more outsourcing. They actually look increasingly like networks. The first central network (networks in terms of human interactions not physical links) is composed of all the members who work for the company and the people who directly control it, like shareholders. The“second” network is composed of the company's partners, for instance the main suppliers and the outsourcing team. Then, all other network such as local authorities, chambers of commerce, the boss’ sport club, or labour syndicates can be tied to the company's network and influence it as well. These networks may take various forms: agreements, contracts, alliances, joint venture and they may also finally result in other forms of inter-organisational “co-operation” such as mergers. Only the best managers understand this need to open their company to this environment, and benefit from all networks. A clever example, is the fact that some companies decide to be based close to a campus of a technological universities to provide their network an access to state-of-the-art expertise. One such example is the organisation ADEC in France, which isbecoming a leader with universities in terms of use of IT and business. In terms of organisational needs, companies have to acquire the ability to manage transactional process between sparse partners. The question is: which IT tools could they use for all these networks? One should carefully study the current information system the organisation has and the needs of every close actor before thinking of using new technologies. The company's existence is increasingly linked to the existence of partners. How can managers constantly understand and somehow follow options chosen by partners? The point is addressed further on in this paper: IOS (Inter Organisational System, part E / solutions).
Another challenge companies have to face in terms of organising their activities and daily tasks is telecommuting, which is becoming commonplace for anyone working in the field of IT or research and who is connected at home. This means that not only salespeople are used to working outside the company but other staff members as well. The question is, how will companies be able to provide them with the right information, at the right time so they will be able to do their job properly? How can they have remote access to the databases to check the company's stocks or client's profile? In terms of technology what is possible to improve the life of what we call cyberworkers?
Another practical aspect of companies’ constraints is their ability to manage workflow between co-workers that are busy at different times and at different different places. The following matrix sums-up the answer given by IT for each of these aspects :
|
|
Same place |
Different places |
|
Same time |
Electronic meeting Meeting room Blackboard Electronic blackboard |
Videoconferencing Screen sharing Document sharing Blackboard |
|
Different time |
Mailbox Electronic forum Electronic publishing |
Electronic mailbox Workflow Form for completion announcement (notification) |
Source : Johansen’s scheme, 1985
Another challenge is within the company: how does one maintain the know-how/ People learn and acquire skills on each project. Time after time, they use their experience to be quicker, they know better how to deal with issues. Therefore, a huge challenge within the workplace is how to organise the memory? Is it possible to some how “save” the way people add value? This concept of learning organisation should be further detailed, but the use of the Intranet technology can be a solution to give appropriate tools to the staff to share and remember events and above all problems resolutions methods. A good example, is as simple as remembering everything about one client no matter who he or she talked to within the company. It could be the accountant or a secretary, the marketing manager and so on. Let’s imagine, all members of the staff could put in common everything they know about this precise customer and why he likes the company. Then, any person, the new salesman of the company for example, who will have to meet him to sell a new range of services, could benefit from the experience of the others and get to know his interlocutor in advance. This kind of database is easy to use and update with an Intranet. The most important thing in this last example is the fact that the customers is becoming in terms of information system organisation, the central player on which the organisation focuses.
Eventually, the needs of companies follow the same logic even if constraints are different. Anyway, in the field of electronic business it is also very strategic to understand the final consumer expectations on line.
Marketing theories have always tried to give a standardised picture of each market share, which becomes target market. As soon as identified, each market share will be offered a standardised product that fits the target. In other words, this is called mass production and consumption. One must simply advertise heavily to reach one’s goal. Some companies, like some French supermarkets are actually acting this way on this new electronic market place. Their commercial web site was developed within a few hours and is aimed at scanning all pictures of the catalogue. The added value they offer to consumers is below all expectations. The content of these commercial web sites is synonymous to emptiness in terms of information given to visitors. In the end, this “point of sale” remains virtual in terms of sales. Is that the way companies should treat their clients on this new market place? Before starting anything, companies should try to understand who is behind its screen.
Jacques Paitra, president of Cofremca and Démoscopie (famous French marketing institute) which did a thorough survey and analysis about the kind of people that connect to the networks and who are likely to buy on line, describes e-shoppers in a way that seems quite relevant.
“They” (the people) trust IT (Information Technology), they are well-educated people, and emotions are meaningful to them. They are looking for their “way”. They do not consider that work and buy is exciting anymore. They would rather use things than be proud to own them. Harmony and equilibrium is their objective. The consumer of the year 2000 evolves in a network society formed by friends, colleagues that have new value in life. They need to use their imagination in their daily life even when they are buying things. They expect companies to be honest. The market place expects sincerity. Competition is rough and they will be more tempted by services that are completely adapted to their needs (customised). They can easily form virtual communities that can strongly influence business and give back power to the consumers, which will be able to use its single community voice. A very good example is the “Microsoft refund day”. All wired people (Internet users) found out that one person in Australia could receive his money back because he actually bought a computer with, as usual, all Microsoft software included. He did not need it, and got the value of the Microsoft software back from the shop. Anyway, why should every computer on earth be equipped with this specific software if, like this man, you want to use other software. Then, that kind of news is spread as fast as light speed on the net with E-mail. Few days afterwards, the 15 of February 1999, all consumers organised the Microsoft refund day to all ask Microsoft on the same day to get their money back. Companies should be aware that they are more and more likely to get a response from all their customers at once. MNCs have to think about creating a dedicated Internet public relations department. Some companies are already using this new communication concept. Theycan dedicate a budget to offer a free service to these communities. For example, an IT company will take part in a beginner forum and answer all their questions about computer problems. Word of mouth is very strong on line! It takes only one second to resent a letter to 1 000 “friends”! For the first time, all customers of a company will be able to join in order to create worldwide users’ communities.
To conclude on the global “demand,”
needs of companies, and expectations of consumers, we can infer that the
on line market will be different from the traditional one. Information
technologyneeds to be improved
to fit professionals needs not the other way round. But what are companies
using now ?