Coursework In Information Systems Management (is 2184)
“How important is it to manage information systems in an adequate way in order to gain success in the E-Business sector?”
This research paper aims to answer the question,
“How important is it to manage information systems in an adequate way in order to gain success in the E-Business sector?”
As we know, the E-Business market is really attractive and an easy way for customers to purchase goods and services at their convenience. However, if information systems are not managed well, the E-Business market can be a bigger bane for customers rather than a boon.
In my opinion, it is very important for companies to the manage their information systems well in order to gain success in the E-Business sector.
“Information Systems Management refers to the complexity of the intertwined effects of organisational strategies and ICT functionalities on the way in which organisations conduct their activities. Moreover, it is important to refer to the processes, methods, knowledge, skills and experience used and followed by organisations to achieve their goals. In the context of information systems, management is key in understanding how organisations plan and adopt ICTs and in realising the organisational change needed to align the organisational goals with the potential value that could be generated.”[footnoteRef:1] [1: Cordella, A. (2017). Information Systems Management. University Of London, p.4]
“Electronic business (e-business) refers to the use of the Web, Internet, intranets, extranets or some combination thereof to conduct business. E-business is similar to e-commerce, but it goes beyond the simple buying and selling of products and services online. E-business includes a much wider range of businesses processes, such as supply chain management, electronic order processing and customer relationship management. E-business processes, therefore, can help companies to operate more effectively and efficiently.”[footnoteRef:2] [2: Techopedia.com. (n.d.). What is Electronic Business (E-Business)? – Definition from Techopedia. [online] Available at: https://www.techopedia.com/definition/1493/electronic-business-e-business [Accessed 11 Apr. 2019].
I have decided to take up the topic of e business and information systems as in today’s world, business transactions mostly take place through information and communication. With the introduction of Web and Web 2.0, most of the transactions as well as buying and selling of goods is done online without the consumers having to physically go to the traditional shops.
However, even though e business has many advantages, it can lead to severe problems as well. If the information systems are not managed in an efficient way by the managers, there can be multiple cases of theft, misuse and fraud which are very complex to deal with. Also, the managers handling the e business section of a company need to form strategies and make business plans in order to attract customers and eventually get success in the market.
In earlier times, customers or suppliers did not have enough information about the market and traditional systems existed. For example, if a consumer wants to purchase a particular good or service, the consumer needed to physically go and purchase it. However, due to advancement in technology, and with the introduction of Web and Web 2.0 as well as M-Commerce, consumers can purchase goods and services in an ‘anytime and anywhere’ fashion. This system enables consumers to shop for products sitting at home or in office through their mobile phones or through their laptops or tablets. Due to the advancement in technology, business meetings can happen between companies located in different parts of the world through videoconferencing on apps like Skype. The main types of e business configurations are: Business-to-Business (B2B), Business-to-Consumer (B2C) and M-Commerce. Business-to-Business is when goods and services are traded between businesses through an online medium. Similarly, Business-to-Consumer model is when a particular business provides a variety of products and services to consumers all around the world. M-Commerce is when consumers can shop for products through their mobile phones by using apps such as Amazon.
Even though e business looks very attractive and appealing, the main issue that is going to be spoken about in this essay is its implementation which can possibly be a major worry for managers. For any e business to be successful, managers firstly need to list down the opportunities and challenges that the firm will face by undertaking a new type of market configuration. “Managers need to identify a set of customers and a market that best suits their business strategy, and they need to provide support to their customers as well as make sure that the business sustains in the long term”[footnoteRef:3]. If these issues are not taken under consideration, then the business may continue to incur losses and investors will not wait till forever for the company to generate profits. Another important aspect to build a good customer base is to provide information security to the consumers. This is because if the consumers do not have enough security, they might switch to another e business platform. [3: Cordella, A. (2017). Information Systems Management. University Of London, p.63.]
In a Business-to-Business model, suppliers have a large market access and consumers have a large variety of products to choose from. However, since its an online market companies will need to keep the customers happy by shipping the delivery in time and giving after sales support as well. In order to achieve this companies can enter into a merger or a partnership with another company in order to be able to manage the workload. Companies can also open a virtual store which will enable customers to place orders from any part of the world. This will also add to the increased profits of the company. A good example of this sector is alibaba.com which is one of the worlds biggest e-business company. “Alibaba showcases a huge array of goods in more than 40 industries, ranging from raw materials to finished products. The main concept of Alibaba Group is to connect B2B businesses (sellers and buyers), instead of selling products and services directly”[footnoteRef:4] . [4: Bintime.com. (n.d.). 11 Best B2B E-Commerce Websites: The Spice and Secrets of Success. [online] Available at: https://bintime.com/blog/best-b2b-ecommerce-websites [Accessed 11 Apr. 2019].]
In a Business-to-Consumer model, companies tend to implement market penetration. Due to the presence of ICTs companies save on costs as they are no more physically present in markets. In such markets a various range of products are sold along with different versions of the same product. Due to cost savings, companies can gain a larger market share and try and generate higher revenues.[footnoteRef:5] This market can improve a company’s performance and generate higher revenues but it is a challenging market because in this market, a company will interact with customers from all over the world and hence will need to be very efficient, customer friendly, provide good services to customers and have a proper business plan. The best example of this model is Amazon. Amazon is one of the biggest e-business platforms in the world. “Amazon started off in 1995 as an online book retailing platform but however has become one of the most profitable platforms with a revenue of $89 billion as of 2014. Amazon now sells all sorts of products ranging from music, film, electronics as well as food”[footnoteRef:6]. Due to the success that Amazon received, it came with Amazon Pay which is like an e-wallet that allows users to pay on external websites through their Amazon account. Amazon also came up with Amazon Prime which is a source of digital media which provides its users with a variety of TV shows and movies. Amazon Prime is one of the biggest threats to Netflix. [5: Cordella, A. (2017). Information Systems Management. University Of London, p.63.] [6: Cordella, A. and Smithson, S. (2018). Management and innovation of e-business. University Of London, p.62.]
As we observed, these businesses were successful and made huge profits eventually. For an e business to be successful the managers need to execute many plans. Firstly, they need to “identify the opportunities, define the optimal configuration and develop and manage the organisational capabilities needed to put the plan into practice”[footnoteRef:7]. Managers also need to prevent the risks associated with e business and hence make and execute plans to prevent these risks. E business risks occur in terms of information security, viruses, worms, trojan horses or professional hacking of devices. Another aspect for an e business to be successful is to design websites that are customer friendly and easy to access. If the consumers are happy with the website they will be loyal to the company, however, if they find the website very complicated or unattractive, they might switch to another e business platform. Another important point is customer satisfaction. It is very important to keep the customers satisfied and this only happens when the goods are delivered on time and there is a good after sales service. When all of these above factors are fulfilled, an e business becomes successful. [7: Cordella, A. (2017). Information Systems Management. University Of London, p.63.]
On the contrary, if information systems are not managed well then it can be a complete disaster for both, the company as well as the customers. Due to the existence of networks like Web and Web 2.0, most of the information exists online. From the customers perspective, they can find information about any product or service or any company online. From the company’s perspective, they can track a customer’s purchase history, customer preferences and consumer profiles. However, if there is a loss of information security due to a virus or professional hacking it can cause problems. These days, customers need to provide personal information to access most websites and if this information leaks out in the wrong hands, then it is a question of personal security. For example, Netflix stores the credit card details of every user and every month a specific amount is deducted. Hypothetically, if the servers of Netflix are hacked, the credit card details of users will fall in wrong hands and this can lead to misuse of the credit card and cause a chaos worldwide. A true example is based on Facebook. Facebook was hacked in 2017 and the accounts of 50 million users were breached[footnoteRef:8]. This meant that personal information such as location history, chats, personal pictures and addresses of 50 million users were hacked. Another example is that of Cathay Pacific. In March 2018, it was reported that private information of a whooping 9.4 million users had been leaked out. “This data included travel history, expired credit card numbers, current credit card numbers without the CVV, personal information about travellers, email addresses and passport numbers”[footnoteRef:9]. [8: Nytimes.com. (n.d.). Facebook Security Breach Exposes Accounts of 50 Million Users. [online] Available at: https://www.nytimes.com/2018/09/28/technology/facebook-hack-data-breach.html [Accessed 11 Apr. 2019].] [9: BBC News. (n.d.). Cathay Pacific hack hits millions of fliers. [online] Available at: https://www.bbc.com/news/business-45974020 [Accessed 11 Apr. 2019].]
Hence, due to such cases, online platforms will be under scrutiny and might face a severe backlash from the customers. These examples are clear indications that if the information systems are not managed well and if the information of customers is under threat, then the customers will refrain from indulging in e business activities because their security is at risk.
After a thorough analysis of the e business sector in information system, I can conclude that if the managers take up responsibility and make and execute proper plans, if the staff is well informed about the information security, and if the employees are motivated to work efficiently, then the business will become efficient and sustain for a long term and eventually be able to generate profits.
However, if the information systems are not managed well due to the staff not being well informed or the employees not being motivated or the managers not being able to execute the plans, in such cases the business will incur losses and can lose out on its entire customer base. This is because if customer security is under threat, as seen in the above cases of Facebook and Cathay Pacific, customers will refrain from online transactions and online shopping. If cases of fraud, hacking, or leaking out of personal information happen often, then no customer will be willing to take the risk of their personal information falling in the wrong hands.
To avoid this, and to make the most out of the rising power of digital markets, managers need to be efficient themselves and make their employees efficient. Managers can take the example of companies like Amazon, eBay and Alibaba in order to motivate their own company members. This is because if companies are managed well and business plan are executed, then a company can get a lot of benefits from the e business market in terms of customer loyalty, building a strong customer base, popularity and all of this leads to increased revenues and profits. Hence in order to gain success in the e business market, information systems management is an integral aspect that needs to be proper attention to and needs to be taken good care of.
An integral aspect that can be connected with this current issue of information systems management is the moral, ethical and legal issues. Through ICTs, companies have more and more information about employees, customers and competitors. A moral code of a company is dependent of a manager’s beliefs. However, what is right is one country may be wrong in another country and may not be socially acceptable[footnoteRef:10]. Hence, rather than making decisions based on personal beliefs, managers should take the above factors into consideration and make business decisions. Managers also need to abide by the law as there are different laws in different countries. ICTs help an organisation to store data and information about customer profiles, customer preferences and buying patterns and the purchase history of customers. Also, due to social networking, a lot of personal data such as job profiles, pictures, addresses and relationship status of customers is available online but managers need to keep track of what data they extract as extracting all of the data may not be ethically appropriate. Hence, “the managers in charge of data extraction and data analytics should have enough knowledge about what is acceptable from an ethical and moral perspective and take business decisions accordingly”[footnoteRef:11]. [10: Cordella, A. (2017). Information Systems Management. University Of London, pp.88,89.] [11: Cordella, A. (2017). Information Systems Management. University Of London, pp.90.]
Another key aspect which relates to the main topic is the issue of data security. Managers need to invest in data security policies and data integrity and confidentiality of data should be the primary concern of the managers. “Information Systems security is the biggest threat of managers and they need to keep solutions ready in case of any security breaches”[footnoteRef:12]. Managers need to install antivirus systems in all of the company’s systems as well as keep the data encrypted. Managers also need to make sure that they do not make the security systems very complex. For example, a few firms have issued ID card scanning or tokens to enter a particular room in the company. However, if the ID card is lost, then any unauthorised person who gains possession of the ID card can gain access to the private room. Users on the other side need to make sure that they keep their password complex but not very complex that they themselves have to write it down to remember it. In such cases, any person can gain access to the password since its written down and kept. [12: Cordella, A. (2017). Information Systems Management. University Of London, p.78.]
- Bintime.com. (n.d.). 11 Best B2B E-Commerce Websites: The Spice and Secrets of Success. [online] Available at: https://bintime.com/blog/best-b2b-ecommerce-websites [Accessed 11 Apr. 2019].
- BBC News. (n.d.). Cathay Pacific hack hits millions of fliers. [online] Available at: https://www.bbc.com/news/business-45974020 [Accessed 11 Apr. 2019].
- Nytimes.com. (n.d.). Facebook Security Breach Exposes Accounts of 50 Million Users. [online] Available at: https://www.nytimes.com/2018/09/28/technology/facebook-hack-data-breach.html [Accessed 11 Apr. 2019].
- Techopedia.com. (n.d.). What is Electronic Business (E-Business)? – Definition from Techopedia. [online] Available at: https://www.techopedia.com/definition/1493/electronic-business-e-business [Accessed 11 Apr. 2019].
- Jethro Mullen, C. (n.d.). Huge hack hits Cathay Pacific passengers. [online] CNN. Available at: https://edition.cnn.com/2018/10/24/business/cathay-pacific-data-breach/index.html [Accessed 12 Apr. 2019].
- Business Insider. (n.d.). 13. Careem — 14 million. [online] Available at: https://www.businessinsider.in/The-21-biggest-data-breaches-of-2018/13-Careem-14-million/slideshow/67045485.cms [Accessed 12 Apr. 2019].
- Cordella, A. (2017). Information Systems Management. University Of London.
- Cordella, A. and Smithson, S. (2018). Management and innovation of e-business. University Of London.