E-Commerce and Business Redesign Term Paper

Pages: 9 (3744 words)  ·  Bibliography Sources: 1+  ·  Level: College Senior  ·  Topic: Business

SAMPLE EXCERPT:

[. . .] Customer loyalty is especially important to the banking business in general. Most people need a real reason to change banks. David Gefen [16] found that customer loyalty to a specific online vendor increased with perceived better service quality both directly and through increased trust.

In the beginning e-businesses were centered on using the latest technical bells and whistles to attract clients. But many learned a hard lesson and found that the same marketing principles that apply to a traditional brick and mortar business, also apply to an e-business. Sarker [17] emphasizes this point and reminds business to strive for a balanced approach between technical issues and social issues in their business process design. Kalalota and Whinston [18] stress the point that the same principles that apply to non-Internet marketing still apply to web-marketing. There is no difference and customers want more than flashing text and scrolling messages. They must have a perceived value from the products and services. The same marketing principles of product differentiation, target markets, brand equity, customer loyalty and security must be applied in the design of an e-business.

Tan and Teo [19] found that these same principles applied to the internet banking industry as well. The results of their study revealed that attitude and control factors had more influence than social issues when it cam to the willingness of a customer to adapt to online banking. The e-banking service must be perceived to be compatible, have a trial period to try it out, and risk were concerns for a customer. This study supported and integrated many of the past studies and made the result applicable to the Internet banking industry specifically.

Geissler and associates [20] explored the issues that are linked to the perception of ease of use to the customer. Web page complexity is linked to communication effectiveness as it is perceived by the customer and is an issue important to business design. Gefen and Straub [21] also explored this idea using a free simulation experiment to collect their data. They arrived at the same conclusion as Geissler and Associates.

Carter and associates discussed the effect of online trading and its effect on IPOs. They found that volumes of IPO participation increased as a result of online trading [22] It is not known whether the same increase in volume has bee noted for the e-banking business.

Conclusions and Recommendations

It would be possible to conduct a literature review on e-commerce and business re-design consisting of thousands of articles. The mass media has jumped on this topic with an unprecedented fervor. This difficulty in reviewing related material is that most of it is not based on, or does not even reference academic studies, not even a survey. Therefore, much of the literature on this subject can be placed in the round file, as it has no value in the design and implementation of an e-commerce business re-design. The focus of this literature review has been related to business re-design as it relates to the retail banking industry. This particular area was chosen for three reasons, the first being that this is one of the few areas where there is a sufficient amount of real academic work on the conversion to e-banking. The second is that many of the same principles that apply to e-banking also would apply to the retail industry in general. Much of the marketing research crosses over and is applicable in the ability of the e-bank to gain and retain customers. The third reason is that the banking industry is the backbone of the other industries. Everyone must have a bank account, whether they are brick and mortar or only exist in cyberspace.

The focus of this literature review centered on e-banking as it applies to business re-design. There is a wealth of technical information that can be used in resolving the technical issues involved in a re-design project. However, if the project is to be successful, the re-design engineer must understand what constitutes a successful re-design project. As was pointed out, the e-bank is dealing with real customers making real business decisions. They have come to expect certain things from a business. Research has shown that technical issues are only important as far as their ability to deliver that desired product to the customer. Customers are not impressed by fancy, complex websites, they want the same things that they expect from traditional brick and mortar bank.

A re-design engineer who fails to take into considerations the marketing information of what will bring customers and hold customers to the website, will design a technically correct project, but one that will fail. As the literature revealed, the customer must be the primary focus of the business process re-design, for the fate of the project is ultimately at the tip of their index finger. It is easy for an e-designer to get caught up in the technical aspects of the project and when this happens, one very important person gets lost, the customer. Many e-designers are not interested in the marketing research that involves the project, but as the research has pointed out, they should be.

The engineer should be concerned with developing a system that has fast, easy to understand EDI. They must be concerned with providing the best security, and they must bring the technology to the average customer's level. They one thing that they must remember, is the business success or failure is just one click of the mouse away.

A literature review of e-business reveals the need for more empirical studies as there are many areas that have not been addressed and many popular opinions that have not been proven or disproven. Business process design cannot separate itself from marketing, especially in any business related to e-tailing. The two departments should work together and try to set goals common to both interests. In the e-business marketing and engineering must learn to work together for a common goal. The failure to do this will lead to ultimate failure.

There have been years of academic studies concerning customer behavior and motivation to remain loyal and make purchases. It has been shown that many of these same principles apply to e-business. E-businesses can rely on these marketing studies to help them achieve the same success as their brick and mortar predecessors. It is difficult to eliminate confounding variables from studies on e-business. However, the survey is still a powerful instrument in determining and customer behavior.

It would be nice to see more real experiments conducted on marketing techniques and measure the results in real sales. In other words, is what the customer says they will purchase and what they actually purchase a different thing? This could be done easily by designing two websites with varying factors that are different, such as easier to navigate, faster load times etc., but that offer identical products at identical prices. The differences could be measured in real sales figures. More real studies such as these need to be performed if we are truly get to know the customer and be able to design business systems that will attract and retain a customer base. This research would be applicable to e-businesses in many specialties.

The e-banking industry suffers from the same woes as other retail industries. As the literature points out, the entire industry has suffered from a lack of direction and planning. E-business design has focused on the individual business and has not considered the direction that the industry is expected to take. A prudent designer not only considers the customer's current needs and the desire to be on the web, but also considers where the industry is going and designs a system that will work for them in the future.

The buss word now is "connectivity" and the ability to communicate on different platforms. Many business were designed to operate quite well on their own, but lack the ability to communicate with other systems. If the e-banking industry could solve this issue they could go to new heights. However, as Zwass pointed out, this has been the failure of the industry to this point. It suffers from this lack of planning and must develop standards to be able to have more interconnectivity in the future.

The novelty of the Internet has worn off and now businesses and designer must get back to the basics of business. Research has shown that e-business is no different that any other business and that in order to remain competitive, they must not forget this. It is the job of the designer to make a system that will serve the client's needs and be able to adapt to changes in the marketplace and new technology, without re-inventing the wheel everytime. E-business designers are the key to achieving connectivity and adaptability in the future and must get their heads out of the chips and back into the basics of business.

Endnotes

1] Lin, L. Geng, X. And Whinston1. A. (1995)… [END OF PREVIEW]

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