MANAGEMENT OF E-COMMERCE
Management of E-Commerce
Introduction
The improvement in technology all over the world has led to the adoption of E-Commerce in the businesses. According to Andam (2014), E-Commerce is the use of electronic systems and the internet to facilitate selling and buying of goods and services. Grandon (2004) is of the opinion that the Electronic Commerce started forty years ago but currently through the day to day innovations, many firms and individuals are entering the market through the internet. In the work of Demirel (2011) businesses incorporate the use of Electronic Commerce to offer its goods and services in a convenient manner to its customers and also reduce the cost of operations. Gefen (2000) argues that E-commerce incorporates the use of business models that enables companies and individuals to use the internet to transact. E-Commerce involves the employment of activities such as online shopping, creating and taking part in online marketing, buying and selling activities amongst businesses. The systems have the functions of aiding in registration, management of orders, payments, taxation, and product management. Referring to Schafer et al. (1999), E-Commerce uses the concept of the shopping cart. It is software that facilitates buyers to access a virtual chart that enables an individual to select the entire items that he need to buy and then buys all of them altogether. In the case of Fresh & Go Ltd, the manager can automate most of its operations to reap the benefits of E-Commerce. The adoption of an E-Commerce will help the company to conveniently offer its services to the customers as well as reducing the cost of offering the services hence increasing the profits (Srinivasan et al. 2002).
According to Grandón et al. (2011), the adoption of E-Commerce would lead to a reduction in operational costs. It is argued that a company incurs a lot of overheads in the retail section where the customers shop (Oliveira, 2010). The costs associated with the retail and nonadoption of an E-Commerce system are staffing, lighting, heating, the cost of restocking the retail shops, the cost of transporting goods to different outlets among other recurrent overheads. Consequently, the number of employees engaged will reduce further reducing the cost. The elimination of these costs leads to reduced cost of doing business hence translating to an increase in profits (McKnight, 2002).
The work of Ordanini (2010) indicates that E-Commerce reduces the cost of doing business significantly. The company will save the cost of opening more branches in the towns and cities. The adoption of E-Commerce results to the centralization of the company activities (Barnes, 2013). The company, for example, can maintain five outlets across the country. The act will reduce expenses of operating many stores since the customer will access the goods available in stores through the internet. The manager will be involved with other productive activities like control and planning other than transporting stock to the many stores of the company.
It is argued that implementation of an E-Commerce system increases the customer base (Ghobakhloo et al., 2011). The customer base is the total number of customers that can access the products of a company bearing in mind their geographical distribution. Once Fresh & Go adopts an electronic commerce system, it will reach many customers both in the local and in the international market. All customers searching products online can see the products offered, select them and buy using online platforms. The sales of the company will increase significantly. Increase in sales results to an increase in profits hence the growth of the organization especially when capital expenditure is incurred.
According to Laudon (2011), an E-Commerce system comes with convenience to both the business and the customers. It is argued that in Electronic Commerce system, business transactions takes place at all times that is, seven days in a week and 24 hours every day (Zhu, 2010). To the business organization, the transactions resulting from sales are spread evenly at all times because purchasing can be made even at night. The ideology reduces congestion that would occur during the day if there is no E-Commerce. To the customers, they can shop at their convenience at their homes. A goodwill results as the customer know that the products are available whenever they require them. Melville (2010) argues that creation of goodwill increases the value of the firm because goodwill is an intangible asset of the company. Many customers will be influenced to order products from Fresh & Go as they trust their products. In this way, the adoption of an electronic commerce system will boost the growth of the Fresh &Co.
When Fresh & Go invests in automation of its operations, the future expansion plans will be enhanced by the increased customer satisfaction resulting from the E-Commerce. Arguably, the ability of the customer to shop quality products online comes along with customer satisfaction (Bryman, 2015). A satisfied customer regularly returns for frequent shopping resulting in the creation of customer loyalty. Loyal customers usually walk along with the business from the start-up stage to the maturity stage because they are not influenced by external factors like relative prices offered by competitors. The customers, therefore, guarantee the company a fixed sales amount hence predicting the future. Adoption of an E-Commerce is therefore of great importance in the company`s expansion plans.
The customers ordering the products will have an easy time. By the use of the internet, the customers can see all the products on offer and select according to their needs. The customers’ accesses even the product that would otherwise not be available to them. The company will be able to offer a variety of its products to a wide range of customer hence increasing sales and profits. According to Bryman (2015) offering the customer a wide range of products to buy enables the company to market its products. In future when the informed customer needs other product offered by the company, he/she will shop for the company. In this way, the company will increase its revenues resulting to the desired growth.
Types of information systems in implementing E-Commerce solutions
There are various information systems the Fresh & Go can adopt in implementing the E-Commerce solutions. The systems if properly installed will enable the company to meet it's long-term and short-term goals of expansion and going international. From the research of Walker et al. (2010), the E-Commerce platform involves the use of technologically innovated systems that enables the buyers and sellers of goods and services to interact online and conduct transactions. The following are the information systems that Fresh & Go may adopt to engage in E-Commerce.
Transaction Processing Systems
In the work of Stair (2013), Transaction Processing system is a system involved at the lower level of management in the organizational structure. It is also called a transaction server. Its task is to assign work to persons and operations that are indivisible. The systems will be helpful in the implementation of E-Commerce in making important business decisions at the lower lever of the organization. According to Shah (2011), examples of the application of Transaction Processing Systems include stock control procedures, the hiring of supervisors and in the selection of suppliers. Implementation of the Transaction Processing Systems will enable Fresh & Go to record all its transaction in an automated system as required in the E-Commerce development. In reference to Bonczek (2014), examples of transaction processing systems available in the market that the company can purchase include: transaction processing store from IBM, Tuxedo, and consumer control of information system from IBM.
Management Information System
Leidner (2014) indicates that Management of Information System is a system used at the middle and executive level of a company. It is argued that the Management Information system is aimed at improving the effectiveness as well as the efficiency of an organization strategic decision (Motro, 2012). When an E-Commerce is implemented in the Fresh & Go, the manager will use the system to manage all activities and other systems of the company.
Decision Support Systems (DSS)
According to Standing et al. (2010), Decision Support Systems are applications used by middle level and executive managers in decision making. It is argued that the decision support systems have the ability to put together information from different sources that will help the managers in solving the problems (Power, 2015). The implementation of an E-Commerce would result in various operational and management challenges. After the application of decision support system, the problems will have viable solutions. The decision support system will be of help especially in the unstructured and semi-structured decision problems.
The Executive Support System
The Executive Support System acts as a reporting platform (Gaul, 2012). The managers can know how all departments of the company are operating. The manager will be in a position to monitor all the departments and stock outlets of the company. In the E-Commerce system, the executive support system will enable the manager to control the demands and supply forces by having access to information from all outlets and the central store.
The Marketing Information System
It is a marketing management tool that is of help to the marketing manager (Maizlish, 2010). The marketing manager makes important decisions concerning the demand and supply of product of the company. For example, the market trend, new market prospects and consumer tastes and preferences. In the E-Commerce, the marketing manager will advise the departments as what products to increase in the market according to the consumer tastes and preferences.
The Accounting Information System
The system is concerned with the accounting aspects of the company. Hall (2012) argues that in an E-Commerce system, all the sales will automatically appear in the accounting records. All the expenses incurred in the process of offering the products will also appear in the books of account as expenses (Shelton, 2010). The system will, therefore, monitor the inflow and outflow of income in the company. The system if properly installed and secured will reduce the cost of employing many accountants to carry out the manual work. The system is also proved to be very accurate and fast hence facilitating the preparations of the books of account on time.
The human resource management system
The system is aimed at managing the personnel in the company. When an E-Commerce is implemented, the employees will be involved in the operations of the company especially after the growth of the firm. Examples of tasks carried out by the system include the remuneration of employees, bonuses to employees and the general employees performance (Voudouris, 2012).
Advice on the challenges facing e-commerce
Despite the implementation of E-Commerce having various benefits to the Fresh & Go, there are also challenges that result from the use and application of an E-Commerce. The challenges should be handled with competence by the manager to prevent them from hindering the company from benefiting from E-Commerce the challenges facing E-Commerce includes the following:
In reference to Kassim (2010), it is difficult for the company to guarantee the product quality. The Fresh & Go Ltd deals with perishable good. It is, therefore, difficult to guarantee a customer shopping online that the goods that will be delivered will be of high quality. This will act as a hindrance to increasing the customer base of the company. It is important for the company to ensure that it delivers goods of high quality to create goodwill and trust to the regular customers of the company (Harrison, 2001).
According to Lawrence et al. (2010), the online system of selling and buying can fail any time due to mechanical challenges. The failure is, therefore, unpredictable as to the time that it will happen or the cost of restoring the system back to normal. Arguably, uncertainty causes worry that affects the efficiency of the whole system (Kacen et al. 2013). It is the role of the manager to put in place control measures against any mechanical breakdown of the company.
E-Commerce does not support the physical interaction of the customer with the employees of the company (Hernández et al., 2010). It is difficult for the customers to enquire directly to the company. The customer can not physically see the product of the company. The separation of the buyer and the seller affects the selling process negatively. It becomes difficult to create a customer loyalty in the absence of the customer.
Considering the view of Bélanger et al. (2011), the customers are uncertain about the time and whether the company will deliver the products. Despite the agreement during the online ordering, the customer does not know whether a technical breakdown will occur or whether the company is genuine or not. The buyer will be at fear about the likelihood of the product finally reaching him as Galliers (2014) argues. It is the responsibility of the company to ensure that it delivers the products in good time.
According to Liang (2011), the E-Commerce system is prone to attack by hackers if appropriate security measures are not put in place. Hackers spend their time trying to make money from unprofessional ways hence interfere with the E-Commerce system through illegal means to get money. In the opinion of Lichtenthaler (2010), the customers fear that their money may fail to reach the company and, therefore, fail to receive the goods. According to Bradford et al. (2010), the online buyers are aware of the hackers and other internet crimes. The manager should ensure that appropriate security and control measures are put in place to secure the whole system from hackers.
Recommendation
Fresh & Co should implement an E-Commerce system due to its benefits to the company considering its growth and expansion. The company will access diverse markets, reduce costs and increase convenience in the business process. Adoption of the system will see the company grow to the desired level. The manager should consider the benefits of the system rather than the disadvantages because the benefits outweigh the challenges.
Conclusion
The E-Commerce system will enable the company to transact online. The customers will access the goods at their convenience. The company will reduce the cost of operations, sell its products to more people hence increase profits. Various systems are available to the company in implementing the E-Commerce system. The application of the various systems will automate most operations of the company. Implementation of the E-Commerce system is faced with several challenges like hacking, and absence of physical contact with the buyers. It is the role of the manager to ensure the establishment of appropriate systems to support E-Commerce in the expansion process of the organization.
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