E-Business: Issues and Challenges with Implemetation

Introduction                                          

The commercialization of the internet and the seemingly insatiable thirst for obtaining a competitive advantage has created a global demand for the use of Information Communication Technology (ICT) in managing businesses. Organizations continue to invest heavily in implementing new technologies hoping it will transcend to greater market share and increase in profit.

Defining Key Concepts

• Electronic Business:

The term E-business (Electronic Business) involves the use of technological infrastructures and applications to synthesize and optimize new and existing business processes (Payne, 2001). E-business involves several innovative technological applications that help enhance the competiveness of a corporation and its relationship with its stakeholders. It includes activities like buying and selling, servicing customers, collaborating with business partners, and conducting electronic transactions within an organisation (Feng, 2007). The extent of the application of E-business Technology almost limitless, as it cuts across different business functions, ranging from inventory control, marketing, accounting, human resource, operations, sales, product development, profit analysis and market forecasting. Many companies have now recognized the power, convenience, and world-wide reach of electronic networks and have employed it use in their businesses, IBM, Amazon, and Wal-Mart are good examples.



• E-Commerce:

E-commerce (Electronic Commerce), although interchangeably used with E-business, E-commerce has a peculiar meaning of its own. The UK Cabinet in 2009 defined E-commerce as “the exchange of information across electronic networks at any stage within the supply chain”. It involves all electronic exchange of data between an organization and its stakeholders as well as technology infrastructure and applications used to support these transactions. (Payne, 2001). It is basically carrying out commercial activities electronically, and is best considered a sub-sect of E-business. E-commerce transactions can be classified into either buy-side e-commerce or sell-side e-commerce.

• Management Strategies & Technology

The above phrase refers to the plan a management has in regard to the application of technological solutions in the course of running a firm, it includes processes such as controlling, leading, monitoring, organizing, and planning. According to Johnson and Scholes(1999), e-business strategy is,

“the direction and scope of an organization over the long-term; which achieves advantage for the organization through its configuration of resources within a changing environment to meet the needs of markets and to fulfill stakeholder expectations.”

To be effective, a management strategy must identify the key needs and issues within the organisation, and provide a framework for addressing the inherent problems.

The E-Business Matrix

E-business technology has evolved so much that it can be implemented in different business segments. The diagram below shows the different classifications of commercial activities where e-business solutions can be implemented as well as providing examples.

Issues with Implementing E Business Technology

In implementing either a new form of e-business technology, or amend an existing one, there are several technological and business issues companies consider, some of which include:

• Security & Fraud: Relatively, ICT platforms are very susceptible to security issues. Hacking, stealing confidential information and disruption of operations are quite common. Businesses will definitely consider this issue a priority when implementing E-business technology.

• Cost and uncertainty of cost: Corporations are often bothered about the cost implications or the uncertainty on what the eventual cost of implementation would be.

• The Company’s business strategy: E-business technologies are implemented in tandem with a corporations business strategy, hence a crucial issue for consideration bother on what the company’s business strategy is, and how e-business can facilitate the ultimate goal of the strategy.

• Potential for Business Growth: Companies are bound to question the benefit accruable to their organization, if the e-business solution is successfully implemented. Does it improve the business? Or provide better revenue?

• Man-power concerns: Another major issue is whether the company has adequate human resource and skill to implement the E-business technology.

• Legal and Governmental restrictions: One paramount issue to be considered is the legality of implementing such technology. Are there any restrictions placed by government? Are the privacy or consumer protection issues involved? Breaching such regulation may have dire repercussions for corporations and its stakeholders.

• Maintenance & Support: Another issue is whether a company is able to obtain adequate maintenance and support after implementation? Any organization implementing E-business Strategies would consider this an issue.

• Simplifying Processes/Increase Efficiency/Reliability: An issue for consideration is how much efficiency, simplification of processes and reliability a corporation can place on a new e-business solution.

• Compatibility or Interoperability: Before adopting new e-business technology, companies would consider how compatible the new system is with other complimentary systems. The more compatible it is, the better for the company implementing the new solution.

• Impact and risk on existing system: Another major issue for consideration is what the effects of implementing a new e-business strategy have on the existing system. Some time, introducing a new system can expose the business to a lot of risk.

• Parameters for judging Success: One key issue on implementation relates to the factors in which a business will use to evaluate how successful it has been in the implementation of E-business.

When is an E-business Solution Successful?

It is not sufficient for a company to implement a new E-business strategy; corporations must also have a detailed system for reviewing the success of the implemented technology, in consonance with its business objectives. Intermediary websites or analytic tools can be used to measure performance (Chaffey, 41, 2007). Outlined below are some parameters used to examine the degree of success of an E-business solution are:

 Compatibility with business strategic objectives: When an e-business solution is functioning in compatibility with the business objective of accompany, it’s likely to be deemed more successful than otherwise.

 Has the E-business solution achieved its aims? : E-business solutions are adopted for specific purposes, the can be deemed successful if they achieve the purpose for which they were created.

 Maximal performance with minimal risk: An E-business technology that performs maximally at minimal risk could also be considered successful.

 Ease to use: Some E-business solution can be considered successful if they help simplify processes and are less cumbersome to use.

The Business Risk of Implementing New E-Business Technology

Implementing new e-business solutions or amending existing portends some risks to businesses, some of which are:

• Wrongful Implementing E-business Technology: By implementing wrong or defective E-business technology, companies may suffer financial and reputational loss.

• Cyber Crime and E-Fraud risks: By implementing E-business solutions, a company, and its customers are more exposed to the risk of being victims of cybercrime (Chaffey 2007). Businesses have the onus of ensuring a secured E-environment.

• Poor Customer Experience/Complexity: E-business technology can sometimes be too complex or not customer oriented, the business risk here, is a reduction in patronage, or more mistakes in the conduct of processes.

• Infrastructure Risk: By implementing new E-business processes, corporations sometimes expose their infrastructure to external threats, physical and otherwise. Viruses, worms, and other means of sabotage are examples.

• Loss of Man-power: E-business environments are flexible, innovative, and often with an empowered workforce. Such environments make “employee poaching” a regular figure. (David Smith, 29 November 2000)

• Damage to an organization’s reputation: When e-business processes fail, the result is a dent in the public image of the company. (David Smith, 29 November 2000)

• Changing Business Strategic: Implementing new e-business technology can make business more susceptible to changing their business strategies in order to accommodate new e-business solutions. The risk is inherent in the instability, as strategies continue to change.

• Late delivery or incomplete transactions: A failed E-business process may lead to late deliveries or incomplete transactions, and this is a risk that threatens the success of any organization.

The Cultural Challenges

There are several cultural challenges to the implementation of e-business; while some are from internal processes, others are external i.e. between organizations and external stakeholders or end users. Some cultural challenges are outlined below:

• It is not unusual for staff in an organization to resent the implementation of E-business solutions because they are use to a specific work-culture, and do not want to change the organizational culture of doing business in a different way. (Tucker, Younis, and Shalaby 2002)

• The non-localization of websites or some e-business processes is another barrier; the rationale is that different communities have peculiar languages, cultural beliefs, and behavioral pattern. The more general an e-business process is, the more culturally challenging it is for the end-users. (Chaffey, 2007).

• Having and understanding a virtual reality experience is crucial to the successful implementation of an e-business technology. Some cultural beliefs encourage more confidence in business processes that are tangible, hence creating a barrier to the adoption of e-business.

• It is not rare to have some apathy towards the introduction of new e-business technology because of previous failures, inadequate education or reliability issues. A good example is the present payment system in most third-world countries, where the culture of payment, is principally cash-based, not because of an absence of credit cards or online presence, but majorly because of an absence of trust. (Tucker, Younis, and Shalaby 2002)

• In some societies and organizations, those on the older divide of the generation gap find it a little to grasp the intricacies of e-business; hence they have more resentment to adopting it.

• There are cultural misgivings in some societies (particularly third world countries), that e-business processes are only for the rich and extravagant, and this belief has affected the implementation of e-business negatively. Implementing E-business processes in such environments would be considerably difficult Grover, Segars & Durand (1994).

• According to Pahladsingh (March 2006), 80% of the world’s internet content is in English, while half of the world’s internet users cannot comprehend the English language. The presence of different languages further compounds the cultural complexity of E-business.

Most of these cultural barriers can be tackled with better education, improved infrastructure and greater emphases on the benefits of E-businesses.

Management Strategies as a Panacea

In order to be “on top of their game”, company implementing E-business solutions, must ensure that management strategies are tailored to help minimize risk and maximize the capabilities of the technology.

Management must ensure that it develops a customer-oriented strategy, where the customer remains the core focus of the business. Managing customers appropriately is crucial to the success of every business, understanding their needs, and channeling the business functions and processes in that direction is crucial to the success of the e-business implementation.

The core essence of every strategy is to add value, Chaffey and Wood (2004) provide some areas where value can be enhanced:

A. Customer and Markets

B. Cost Reduction

C. Innovation (creating new reality) e.g. new products, services and business ideas.

D. Reduce or Manage Risk.

To be successful, management strategy must be clear and definite. Greater emphases should be stressed on adequate training of staff, and effective management techniques. Firms must also be proactive about their strategy and ensure that it is passed down to staff, this is done through emphases on the businesses vision, mission statement, general orientation and ideology.

Additionally, it suggested that E-business technologies are implemented gradually, rather than introducing it abruptly. Control groups can be used to control the unintended influence implementing e-business innovations

Conclusion

The growth of E-businesses in the next decade appears to be tremendous. However, to be an effective business tool, it must be properly implemented, with much adherence paid to risk reduction, effective customer management and profit maximization.