MBA NOTES

Organizational structure & departmentation

2010-07-30T23:12:00.000+05:00

What do you understand by organizational structure. Discuss the basics of departmentation.

Organizational structure is relatively a stable relationship and processes of the organization. Organizational structure is the anatomy of the organization that provides the foundation with in which an organization functions. The idea of structure as a framework focuses on the differentiation of formulation of rules and procedures and prescription of authority.

Purpose of organizational structure

Organizational structure reduces and regulates uncertainty in the behavior of an individual employee.
The structure of an organization is purposeful and goal oriented.

Organizational design

Organizational design is the process of making decisions and procedures that results in an organizational structure.

Factors of organizational design

1- Top managers decide how to divide overall tasks into smaller activities.
2- Top managers distribute authority among the job.
3- The jobs have two distinct attributes, activities and authority.
4- Top managers decide the bases by which the organizational jobs are to be grouped.
5- Top managers decide the size of group reporting to each superior. This decision involves determining whether span of control relatively few or many.

Departmentation

This is a process of defining the activities and authority of jobs. The total task of the organization is broken down into small activities and combining the divided task into groups and departments.

Types / bases of departmentation

• Departmentation by function;

This is the process of departmentation according to the function like HP department, marketing department, Finance department etc.

• Departmentation by terrioty;

This is the process of departmentation according to area.

Difference between group and committee

2010-07-30T23:06:00.000+05:00

What is the difference between group and committee? Discuss the advantages and disadvantages of committee.

Group can be defined as any number of motivated individuals who interact and contribut
towards achievement of common goal.

Group dynamic concern with the interaction and force among group members

Characteristics of Group Members

i) They are motivated to join the group.
ii) They are interacted with each other.
iii) They contribute their time and energy to the group process.
iv) They have agreements and disagreements through various forms of interactions.

Three factors affecting group effectiveness

a) Task Interdependence means how closely group members work together.
b) Out Come Interdependence means whether or how group performance is rewarded.
c) Group Potency means members believe that group can be effective.

Committee

A committee is a group of persons within an organization to whom, as a group, some matter is committed. The committee may be formed for a limited duration or a standing committee. Also the members of the team may or may not have other responsibility in the organization in addition to those as a member of the committee.

Advantages and disadvantages

Committee is formally structure group designed to carry out special task.

1- The combine and integrated judgment through members of wide experience, ability and knowledge.
2- Committee can reduce conflict & promote coordination between departments. Committee is speed up horizontal designing.
3- Committee provides motivation and commitment. Involvement and participation increases member’s acceptance.
4- Committee can help in human development and growth.

Negative attributes or weaknesses of committee

1- Committee are time consuming and costly. A committee takes minutes and wastes hours.
2- The committee has divided responsibility in committee. There is group responsibility but no individual accountability or responsibility.
3- Committee decisions are products of compromise of one persons domination.

S M Assignment I

2010-07-30T20:53:00.000+05:00

STRATEGY ANALYSIS AND CHOICE

OUTLINE
*The Nature of Strategy Analysis and Choice
*A Comprehensive Strategy-Formulation Framework
*The Input Stage
*The Matching Stage
*The Decision Stage
*Cultural Aspects of Strategy Choice
OBJECTIVES
After studying this assignment, we should be able to do the following:
1. Describe a three-stage framework for choosing among alternative strategies.
2. Explain how to develop a SWOT Matrix, BCG Matrix,
3. Identify important behavioral, political, ethical, and social responsibility considerations in strategy analysis and choice.

4. Discuss the role of intuition in strategic analysis and choice.

5. Discuss the role of organizational culture in strategic analysis and choice.

ASSIGNMENT OVERVIEW
Strategic analysis and choice largely involve making subjective decisions based on objective information. This paper introduces important concepts that can help strategists generate feasible alternatives, evaluate those alternatives, and choose a specific course of action. Behavioral aspects of strategy formulation are described, including politics, culture, ethics, and social responsibility considerations.

Nature of Strategy Analysis & Choice

-- Establishing long-term objectives
-- Generating alternative strategies
-- Selecting strategies to pursue
-- Best alternative - achieve mission & objectives

Alternative Strategies Derive From

• Vision
• Mission
• Objectives
• External audit
• Internal audit
• Past successful strategies

A COMPREHENSIVE STRATEGY-FORMULATION FRAMEWORK

Important Strategy-Formulation Techniques

1. Important strategy-formulation techniques can be integrated into a three-stage decision-making framework. The tools presented in this framework are applicable to all sizes and types of organizations and can help strategists identify, evaluate, and select strategies.

2. The framework described above has three stages:
    a. Stage 1: The Input Stage
    b. Stage 2: The Matching Stage
    c. Stage 3: The Decision Stage

THE INPUT STAGE

1. The Input Stage includes the External Factor Evaluation (EFE) Matrix, the Competitive Profile Matrix (CPM), and the Internal Factor Evaluation (IFE) Matrix.

2. The input tools require strategists to quantify subjectively during early stages of the strategy-formulation process. Making small decisions in the input matrices regarding the relative importance of external and internal factors allows strategists to generate and evaluate alternative strategies more effectively.

THE MATCHING STAGE

1. The Matching Stage includes the Threats-Opportunities-Weaknesses-Strengths (SWOT) Matrix, the Boston Consulting Group (BCG) Matrix and the Grand Strategy Matrix.

2. Any organization, whether military, product-oriented, service-oriented, governmental, or even athletic must develop and execute good strategies to win.

FOUR TYPES OF STRATEGIES

Strengths-Opportunities (SO):

Use a firm’s internal strengths to take advantage of external opportunities

Weaknesses-Opportunities (WO):

Improving internal weaknesses by taking advantage of external opportunities

Strengths-Threats (ST):

Use a firm’s strengths to avoid or reduce the impact of external threats.

Weaknesses-Threats (WT):

Defensive tactics aimed at reducing internal weaknesses and avoiding external threats

Strengths:

1. R and D almost complete
2. Basis for strong management team
3. Key first major customer acquired
4.Initial product can evolve into range of offerings
5. Located near a major centre of excellence
6. Very focused management/staff
7. Well-rounded and managed business

Weaknesses:

1. Over dependent on borrowings - Insufficient cash resources
2. Board of Directors is too narrow
3. Lack of awareness amongst prospective customers
4. Need to relocate to larger premises
5. Absence of strong sales/marketing expertise
6. Overdependence on few key staff
7. Emerging new technologies may move market in new directions

Threats:

1. Major player may enter targeted market segment
2. New technology may make products obsolescent
3. Economic slowdown could reduce demand
4. Euro/Yen may move against $
5. Market may become price sensitive
6. Market segment's growth could attract major competition

Opportunities:

1. Market segment is poised for rapid growth
2. Export markets offer great potential
3. Distribution channels seeking new products Scope to diversify into related market segments

Key Strategies

1. Accelerate product launches by strengthening R and D team
2. Extend links with key technology centres
3. Raise additional venture capital
4. Expand senior management team in sales/marketing
5. Recruit non-executive directors
6. Strengthen human resources function and introduce share options for staff
7. Appoint advisers for intellectual property and finance
8. Seek new market segments/applications for products

Limitations with SWOT Matrix
• Does not show how to achieve a competitive advantage
• Provides a static assessment in time
• May lead the firm to overemphasize a single internal or external factor in formulating strategies

BCG Matrix

Boston Consulting Group Matrix

 Enhances multi-divisional firm in formulating strategies
 Autonomous divisions = business portfolio
 Divisions may compete in different industries
 Focus on market-share position & industry growth rate

Relative Market Share Position

The four quadrants represent the following:

a. Question Marks—Divisions in Quadrant I have a low relative market share position, yet compete in a high-growth industry. Generally these firms’ cash needs are high and their cash generation is low.

b. Stars—Quadrant II businesses represent the organization’s best long-run opportunities for growth and profitability. These businesses have a high relative market share and compete in high growth rate industries.

c. Cash Cows—Divisions positioned in Quadrant III have a high relative market position, but compete in a low-growth industry. Called cash cows because they generate cash in excess of their needs.

d. Dogs—Quadrant IV divisions of the organization have a low relative market share position and compete in a slowed or no-growth industry; they are Dogs in a firm’s portfolio.

The Grand Strategy Matrix

1. In addition to the SWOT Matrix and BCG Matrix, the Grand Strategy Matrix has become a popular tool for formulating alternative strategies. All organizations can be positioned in one of the Grand Strategy Matrix’s four strategy quadrants.

2. It is based on two evaluative dimensions: competitive position and market growth.

CULTURAL ASPECTS OF STRATEGIC CHOICE

Culture includes the set of shared values, beliefs, attitudes, customs, norms, personalities, heroes, and heroines that describe a firm.

All Organizations Have a Culture

1. It is beneficial to view strategic management from a cultural perspective because success often rests on the degree of support that strategies receive from a firm’s culture.

2. If a firm’s strategies are supported by cultural products such as values, beliefs, rites, rituals, ceremonies, stories, symbols, language, heroes, and heroines then managers often can implement changes swiftly and easily.

3. Strategies that require fewer cultural changes may be more attractive because extensive changes can take considerable time and effort.

e-store Set up

2010-07-18T23:19:00.001+05:00

INTRODUCTION TO BASIC FUNCTIONALITY OF ONLINE STORE

How an e store works

An Internet storefront is up and running - then the shopper discovers and visits the site through one of the many search engines, a link to the online store, ads or other forms of advertising. The customer proceeds to place their order on the e-store through the shopping cart.

Then you receive a confirmation order email letting us know that an order has been placed on your e-store along with the details of the products ordered and the customers shipping information as well.

Your gateway processor and merchant account provider will automatically take care of the authorizing and billing process of the shopper’s credit card. Within 72 hours or less those funds will be transferred into your bank account. This is the power of having your own merchant account with own e-store instead of running an affiliate online store.

After the customer orders the product from your Internet storefront then you contact and order the product from the wholesale product distributor by phone or from the distributor’s web site. The distributor will then ship the product directly to your customer’s location with your business name on the box.

The concept has been tested and proven. In fact, this is the same concept which Amazon.com, Buy.com, BestBuy.com and other Internet giants use to run their multi-million-dollar operations daily.

ONLINE STORE SETUP PROCESS

Get signed up with the best wholesale distributors

We'll have to learn how to get signed up with the best wholesale distributors and drop-shippers for the Internets' best selling products. These are the fulfillment distributors for Internet giants, Amazon.com, Buy.com, BestBuy.com and many other multi-million-dollar internet storefront operations.

These wholesale distributors offer the lowest wholesale prices around and drop-ship the products directly to our customers location with our business name on the box so that it will appear to our customers as if the package came from our business. A brilliant concept that works.

Search a web host and domain

Register A Domain

One of the most important aspects of our online store is a domain name. We will choose a domain name that is short, catchy and memorable with no dashes in the name. We can use GoDaddy.com to register all of our domains. Especially if we plan on having multiple sites.

Web host

When we first launch our online store, we aren’t really going to need a powerful webhost. Initially, we aren’t going to be attracting enough customers to bring a shared hosting account down.

For example, when I first started out, I looked for the following attributes in my potential webhost providers

Are they cheap?
Are they reliable? Do they have a decent uptime?
Do they have good technical support?
Do they load one machine down with too many users?
Do they offer the features that I need to run my online store.

Goods to sell online

In general though, we would recommend picking items to sell that meet the following criteria;

The product should not be fragile and easy to ship
The product should not take up much physical space
The product’s inherent value should be ambiguous.
The product should be timeless.

WorldwideBrands.com also offers the following services at a very reasonable price:

They provide a list of pre-verified drop-ship wholesalers, light bulk wholesalers (orders under $500), high volume wholesalers, liquidation wholesalers and import wholesalers. The best part is that Worldwide Brands has a screening process to make sure that you are dealing with legit companies.

They provide information estimating how well your product will sell

They provide information on how many people are searching the Internet for your products

They provide information on how many other people are selling your products.

They tell you who your competitors are so you can see whether the market is saturated.

A free shopping cart

There are many free open source shopping carts available. Some of the carts that I looked at were

• Magento
• OSCommerce
• OSCMax
• ZenCart
• Prestashop
• Agoracar
• Opencart
• Wordpress ECommerce

While everyone will have different criteria for their own shopping cart, I narrowed down my recommendations based on product maturity, features and 3rd party support.

The following are must have features in a shopping cart

• Search Engine Friendly URLs
• Availability of 3rd party templates and themes
• Fast product upload from a spreadsheet
• Coupons/Gift vouchers
• Wide array of payment processors
• Cross selling
• Dynamic photo resizer
• Integration with real time shipping services
• Single page checkout

A payment processor

There are 3 main ways to take credit cards online.

Virtual Terminal

The first way to accept payments is to sign up for what is called a virtual terminal. Basically how this works is that when orders come in via phone or web, you then manually enter in the credit card information on a secure terminal.

Process Credit Cards On A Third Party Website

The second solution is to have a link from your online store during checkout that takes the customer away from your site to the website of your payment vendor. The customer then enters in their credit card number on your vendor’s website where the payment is processed. Once the transaction is complete, the customer is then redirected back to your online store. The standard Paypal account for example allows you do this for free.

Process Credit Cards Directly On Your Store

The best way to process credit cards is to have a merchant account with a gateway and process credit cards directly from your online store. It might be more of a hassle to setup and it might cost a bit more upfront, but it’s worth it. The ability to process credit cards without a customer having to physically leave the website will not only lend credibility to the store but it will increase conversions as well.

Merchant Accounts and Gateways

In Pakistan most commonly used gateway is 2checkout merchant account.

• Authorize.Net
• Linkpoint
• EFS Net
• GeoTrust QuickPayment
• iPayment
• 2CheckOut
• PSIGate

Important steps to make sure of the following;

• Make sure that the credit card numbers are not stored on server or database
• Make sure that a laptop is not used on a wireless LAN when using a virtual terminal
• Make sure that an up to date anti-virus and firewall software installed on your computer
• Make sure that the server is PCI compliant by getting it scanned for free. We can get our site scanned for free on the Hacker Guardian website.
• Make sure that an SSL encryption is used to transmit credit card data
• Fill out a questionnaire in regards to the credit card and security practices

Get a great design

The lack of graphic design skills often discourages would be online shop owners.

Both Templatemonster.com and Algozone.com carry a large variety of store templates for OSCMax, ZenCart, and Magento across a wide range of categories. All of their templates are of very high quality and they offer 24/7 support on any template purchased.

Once the template is purchased, we will have to tinker with the following things

• To create our own unique store header
• To play around with the colors to suit our style

Marketing Channel strategies

Building and designing an online e-commerce business is the very basic step. The most difficult and promising is to market it and drive mature customers traffic to your online store.

1) Newsletter Systems and CD Presentations

The implementation of an effective newsletter system into a website fundamentally has the ability to improve interactivity with its users. The newsletter system functions as an online marketing strategy for this very reason as Internet users prefer to visit websites that offer a personal yet professional atmosphere that they are made to feel welcome and most comfortable in.

CD presentations creates to add company promotion to clients without the required Internet connection to access websites. Another benefit obtained from this online marketing strategy is that Internet download time and therefore file size is no longer a problem.

2) Affiliate Marketing and Pay-Per-Click

Affiliate marketing is a popular website promotion method that occurs between one site featuring information usually occurring in the forms of advertisements of another site to aid them in an increased number of visitors.
The top ranking web sites are google.com and yahoo.com providing affiliate marketing. There are thousands of other websites providing this facility on a nominal charge.

3) Statistical Analysis / Customer Analysis

Another online marketing strategy is through the use of statistical analysis carried out to determine the number of visits a website has gotten within a certain period of time as well as which keywords are more popular than others. A website owner discovers with use of statistical data, which consumers to target and how to ultimately improve website success with the application hereof. Statistical analysis is therefore linked to customer analysis as it directly regards the relation of consumers and the positive effects they have on the statistics of a company website.

4) Search Engine Optimization

Search engine optimization is directly related to that of statistical analysis and the search engine optimization team therefore makes certain relevant statistical information available for clients to see.

The following statistics are displayed for the benefit of all clients:

• Which pages visitors visit the most
• What days and hours of the week they most often visit your website
• A percentage breakdown of how long visitors stay on your website
• What search engines visitors enter your website from
• What keywords are being used in search engines to find your website

5) Benchmarking and Competitor Analysis

Benchmarking is an online marketing strategy based on a comparison with the toughest competitors in order to achieve the highest possible standard. Benchmarking is carried out by continuously measuring and comparing with so-called industry leaders according to their services, processes and products. Benchmarking is a great online marketing strategy for the reason that a company will be constantly exposed to the latest technology implemented in current web design and development and the marketing thereof.

An online store can sell some of the products from these top selling categories:

1. Books
2. Computer Hardware
3. Computer Software
4. Apparel
5. Toys/Video Games
6. Videos DVD’s
7. Health and Beauty
8. Consumer Electronics
9. Music
10 . Jewelry
11. Office Supplies
12. Linens/Home Décor
13. Flowers
14. Sporting Goods
15. Footwear
16. Small Appliances
17. Tools and Garden
18. Gifts

Difference between E-Business Categories

2010-07-07T15:45:00.001+05:00

E-Auction

E-Auction is an online negotiation tool. The supplier with the lowest bid will win the auction. However, it is important to note that business will not always be awarded based on lowest bids only, quality and service level are also important selection criteria.
The non-price factors will - in most cases - be incorporated in the e-Auction so the winner of the e-Auction will also win at least part of the business.
Benefits of an e-Auction
• Transparent process
o It will be clear to participants why they won/lost the e-Auction.
o Participants will receive real-time market information.
• Contracts can be awarded faster.
• Time saving compared to face-to-face negotiations.

E-Banking

E-banking or Online banking (or Internet banking) are same terms it allows customers to conduct financial transactions on a secure website operated by their retail or virtual bank, credit union or building society.
The common features are as under;
• Transactional (e.g., performing a financial transaction such as an account to account transfer, paying a bill, wire transfer... and applications... apply for a loan, new account, etc.)
o Electronic bill presentment and payment - EBPP
o Funds transfer between a customer's own checking and savings accounts, or to another customer's account
o Investment purchase or sale
o Loan applications and transactions, such as repayments of enrollments
• Non-transactional (e.g., online statements, check links, co-browsing, chat)
o Bank statements
• Financial Institution Administration
• Support of multiple users having varying levels of authority
• Transaction approval process
• Wire transfer

E-Commerce

E-commerce (electronic commerce or EC) is the buying and selling of goods and services on the Internet. In practice, this term and e-business are often used interchangeably. For online retail selling, the term e-tailing is sometimes used.

Aspects of e-commerce include:

• E-tailing or "virtual storefronts" on websites with online catalogs.
• The gathering and use of demographic data through Web contacts.
• Electronic Data Interchange (EDI), the business-to-business exchange of data.
• Email, instant messaging and social networking as media for reaching prospects and established customers.
• Business-to-business buying and selling.
• The security of business transactions.

E-Directories

E-Directory maintains a hierarchical database of information about network resources within a global enterprise, including networks, users, subgroups, servers, volumes and printers. Users log in to the network, and eDirectory determines their access rights. In its early development it was known as Novell Directory Services (NDS). When eDirectory was NDS, it supported the X.500 structure, but not all of the protocols. With the addition of software from Nexor Limited, eDirectory could query X.500 directories in governmental agenciesand other organizations.

E-Engineering

e-Engineering is an answer for growing globalization of manufacturing, sourcing and engineering. In the world of ever increasing speed, competition, treats and opportunities, it’s a tool to conduct a business better, faster and more efficiently every day. This is exactly the goal of e-Engineering: to help run a business according to the highest global standards and best practices, by providing with up-to-date, leading-edge industrial Web applications and customized needs fulfillment.

E-franchising

A form of online selling or promoting products or services in continuing contractual relationship with other businesses operating under the franchisor's trade name and usually with the franchisor's guidance, in exchange for a fee. Its growing popularity of online ordering for almost everything except groceries, e franchising is only going to increase in popularity. WSI is a well known company with a history of success and embraces questions from potential franchisees.

E-Gambling

It’s an online gaming portal in return of rewards in terms of money or other benefits. Online gambling is always secured to avoid fraud or hacking the money transitions. There are plenty of laws and Ordinances implemented to regulate such online gambling website in the countries where it is allowed.

E-learning

The delivery of a learning, training or education program by electronic means. E-learning involves the use of a computer or electronic device (e.g. a mobile phone) in some way to provide training, educational or learning material.

E-mailing

A system for sending and receiving messages electronically over a computer network, as between personal computers. In detail electronic mailing is the transmission of messages over communications networks. The messages can be notes entered from the keyboard or electronic files stored on disk. Most mainframes, minicomputers, and computer networks have an e-mail system. Some electronic-mail systems are confined to a single computer system or network, but others have gateways to other computer systems, enabling users to send electronic mail anywhere in the world.

E- Marketing

E-Marketing, web-marketing, online-marketing, digital marketing, Search Engine Marketing (SEM) or internet marketing also referred to as i-marketing, is the marketing of products or services over the Internet. It can be defined as Achieving marketing objectives through applying digital technologies. By using a company’s web site in conjunction with online promotional techniques such as search engine marketing, interactive advertising, e-mail marketing and partnership arrangements (affiliate marketing) with other web sites.

E- Supply Chain Management

E-Supply Chain Online exchanges the management of upstream and downstream relationships with the suppliers and customers to deliver superior customer value at less cost to the supply chain as a whole.

E-Trading

Electronic trading, sometimes called etrading, is a method of trading securities (such as stocks, and bonds), foreign currency, and exchange traded derivatives electronically. It uses information technology to bring together buyers and sellers through electronic media to create a virtual market place. NASDAQ, NYSE Arca and Globex are examples of electronic market places.

CRM in E-Business

2010-07-04T15:52:00.003+05:00

CRM is a term that is often referred to in marketing. However, there is no complete agreement upon a single definition. This is because CRM can be considered from a number of perspectives. In summary, the three perspectives are:

Information Technology (IT) perspective
The Customer Life Cycle (CLC) perspective
Business Strategy perspective

CRM Different Definitions

1. CRM is the application of a well developed customer strategy, based on a high level of customer awareness, to a properly matched set of CRM technologies and services.

2. CRM is the business buzzword on the Internet these days. Customer Relationship Management promises faster customer service at lower costs, higher customer satisfaction and from this, better customer retention and ultimately customer loyalty.

3. CRM is a strategic approach that is concerned with creating improved shareholder value through the development of appropriate relationships with key customers and customer segments. CRM unites the potential of relationship marketing strategies and IT to create profitable, long-term relationships with customers and other key stakeholders. CRM provides enhanced opportunities to use data and information to both understand customers and create value. (Payne and Frow - 2005)

CRM Systems with E-Business

1. Business-to-Business (B2B) CRM

The Business-to-Business (B2B) CRM enables organizations to manage the whole customer/partner lifecycle and rapidly establish a selling channel, whether merely conventional or online through web-based applications (E-Sales).

1.1 Marketing Automation

Marketing automation creates a beneficial bind between service and sales organizations. The CRM software solution should be able to deliver on a range of goals in multiple environments (such as business-to-business and business-to-consumer).

1.2 Sales Force Automation (SFA)

Sales Force Automation (SFA) is the automation of the sales cycle by linking your outside sales, inside sales, technical support, management, and service and customer care. The goal is to increase communication and hence efficiency between sales and support teams.

1.3 Customer Service and Support

Customer Service and Support helps better understand one's customers and anticipate their interest in an enterprise's products and/or services through processes occurring throughout the marketing, sales, and service stages.

1.4 Partner Management

Partner management supports, usually through a web portal dedicated to partners, basic functionality for partner management, such as partner information management (create, search, update, and delete), opportunity and lead source tracking and automatic notification, opportunity and lead assignment and automatic notification, all of these based on user-definable rules and workflow.
1.5 Contract Management and Creation

The Contract Management and Creation section enables organizations to manage, whether electronically or in a more conventional manner, contract lifecycle from contract creation and modification, to contract expiration and renewal, while supporting for multiple currencies; all of these based on user-definable rules and workflow.

1.6 Project and Team Management

Project and Team Management enables organizations to manage project lifecycle and project team, from project kickoff and role definition to personnel assignment, project execution and completion; all of these based on user-definable rules and workflow.

2. Business-to-Consumer (B2C) CRM

Business-to-Consumer (B2C) CRM enables organizations to manage the whole consumer lifecycle, interact properly and successfully with their customers, and rapidly establish a selling channel.

2.1 Internet Sales

Internet sales enables visitors to look for and select products of their interest, and complete their purchase online. To do so, the CRM software solution should provide an on-line product catalog with real-time price and availability information, shopping basket management with secure payment transaction processing, and profile information management (registration, subscription, shipping and billing addresses, purchase history).

2.2 Email Response Management

Email Response Management ensures management of incoming emails from customers with automatic guided-through questionnaires and outbound emails combined with customer's data. It includes rule-based routing with reporting capabilities.

2.3 B2C Analytics and Business Intelligence

B2C Analytics and Business Intelligence (BI) are analytical applications using complex rules-based techniques, neural networks, pattern recognition and other profile settings within peer groups to identify certain transactions and set thresholds for what is considered "normal" shopping behavior.

3. Other CRM-Related Application Areas

Throughout the customer lifecycle (suspect, prospect, visitor, user, lead, client), the latest CRM software solutions allow you to gather, compute, analyze, report, and extract all kinds of information related to your customers and their behavior.

3.1 Email Marketing Email marketing is the electronic form of direct marketing. mailing list management (recipients), mailing campaign management (messages sent), mailing content management (message content), mailing bounce management (messages received), mailing tracking and report management (campaign efficiency).

3.2 Relationship capital management (RCM) empowers sales organizations to drastically accelerate their sales cycle by rapidly inventorying and charting their social and personal relationships, whether internal (local relationship) or external (global relationship).

3.3 Survey software are business intelligence tools aiming at increasing product acceptance, and customer loyalty by ensuring that customer needs are better understood and addressed.

CRM In Pakistan

Currently there are two sectors in Pakistan which are highly influenced by the latest advancements in ICT to stay abreast in the competition i.e. banking and telecom sectors. In the recent years major foreign investments have been made in Pakistan, particularly in these two sectors.

NADRA CNIC CRM

This system was developed to keep track of CNIC application forms during various stages using Barcodes to track 200,000 forms per day at 105 districts of Pakistan, 8 Regional Headquarters and Central Headquarter of NADRA. Stages include; District Registrar Office (DRO), Scanning, Data Entry, Local data warehouse, Central Headquarter, Printing of CNIC, RHQ, delivery of CNIC, etc. To track 200,000 forms per day at 20 stages, a massive 2 million transactions per day are created and stored at the central CRM Server. Using dynamic web reports to display this data for NADRA management was also developed.

Olpers
Customer Relationship Management in Engro Food` According to Engro foods view, CRM consists of:

Helping olpers to enable its marketing departments to identify and target their best customers, manage marketing campaigns and generate quality leads for the sales team. Assisting olpers to improve account and sales management by optimizing information shared by multiple employees, and streamlining existing processes. Allowing the formation of individualized relationships with customers, with the aim of improving customer satisfaction and maximizing profits; identifying the most profitable customers and providing them the highest level of service.

Providing olpers employees with the information and processes necessary to know their customers, understand and identify customer needs and effectively build relationships between the company, its customer base, and distribution partners.

Barclays Bank PLC

Barclays Bank PLC has signed an agreement with Microsoft whereby Microsoft will provide Barclays Bank with Dynamics CRM a fully integrated, adaptable business management solution. Barclays Bank Pakistan chose Microsoft CRM solution as it is an affordable technology solution that helps automate and streamline the three basic steps of customer management: Identifying, attracting, and retaining the customer. It provides a 360 degree view of the customer with access to members across an organization with up-to-date information of the customer. This commitment, along with our inherent business values aim to provide efficient and innovative banking solutions throughout the Barclays branch and sales centre network across Pakistan.

Change in our Traditional Business

2010-05-25T19:02:00.000+05:00

Change in our Traditional Business

Higher-level business and information systems (IS) education is in a state of change, as the traditional curriculum does not coincide with business realities. There is also a lack of integration of all the “traditional” functional areas (e.g. accounting/finance, marketing, operations, management) in relation to evolving overall business models and strategies (Selen, 2001). It is not surprising that most of these new organization forms were conceived and launched by entrepreneurs.

While much attention has recently been focused on the problems facing Internet start-ups, the challenge of e-business affects a much broader constituency of organizations. For established companies, the key challenge is one of change. However, companies must also deal with a paradox in e-business change. As the “dot.com” crash showed, there is much strength in “bricks and mortar” companies. Evolving a new business model based around “e-enablement” must therefore avoid the “baby and bathwater syndrome”.

E-commerce is not the kiss of death for big, traditional brick-and-mortar business. However, it does means that business-as-usual is forever changed. Adaptation is imperative for survival.

E-commerce is the exchange of value electronically across enterprises or between enterprises and customers. Technologies such as Internet protocol (IP), web browsers, web application servers, and hypertext markup language/extensible markup language (HTML/XML) have made it possible. E-commerce creates new business life forms such as dot.com startups, new food chain intermediaries such as application service providers (ASPs), and innovative commerce transactions such as online auctions. Comparison between the dot.com companies and traditional business reveals two very different traits. Dot.com companies are characterized by little-to-no earnings and stratospheric market caps while traditional business are the exact opposite. What is evolving is a hybrid, called clicks and mortar.

Five Levels of Evolution

The evolution from traditional business to E-commerce means undergoing five levels of change.
o Level 1 (static) is merely putting information on the Internet. The customer grabs data from the web site with this low cost, HTML-based delivery methodology.

o Level 2 (interactive) is dynamic information delivery with 2-way communication. Customers can search catalogs for goods, check status of orders, and personalize content with such online merchandising.
o Level 3 (transaction) is integrating secure financial transactions into core systems like business-to-business (B2B) ordering, provisioning, billing, and payment. There are analytical tools and capabilities for personalizing information. This translates into better customer service and offerings.

o Level 4 (transformational innovation) is E-business where new products, services, and brands become available as offerings. Changes to the industry value chain also occur. Interaction is driven by the lifetime value of the customer. Highly personalized service across all delivery channels become routine. It requires both front end and back end system and business integration where both operate as one enterprise.

o Level 5 (self-adapting organization) is E-business plus. This is characterized by extended, leveraged knowledge management about partners and customers; continuous learning in decision making; customer value management; and value chain management.

Can Traditional Businesses Compete?

Traditional businesses can effectively compete for E-commerce because they are established. They have “the goods” when it comes to production and delivery capabilities. They also own “the content” when it comes to intellectual property, databases, entertainment, and well-known brands. They have a proven track record for working together with suppliers, channel partners, and complementary business partners. Their deal making skills, capabilities, and capacity are known from previous successes. Furthermore, they have the brainpower of skilled people and a system for managing customer relationships and production. Finally, their customer base is the most important asset of all.

Can Traditional Businesses Survive?

In 1998, E-commerce captured one percent of the US gross domestic product (GDP) of $32 trillion. By 2010, estimates for E-commerce are less than seventy percent. E-business is where the real action will be. Therefore, survival is a matter of traditional businesses making an evolutionary leap into the electronic medium. They must develop a new business sense, grow smarter, and add new capabilities conducive to the Internet. The business climate has just started to change and there is time to adapt a clicks and mortar strategy.

Growing smarter means

• using E-commerce for strengthening existing relationships and making new ones;
• creating a digital nervous network with reactive, intranet capabilities and systems;
• building intelligent, multi-channel relationship management processes, and
• applying advanced decision analytics that define the new E-business instinct.

Survival Plan and Strategy

Surviving and thriving the coming of E-commerce means executing a strategic plan. The plan should have the following steps:

• Empower a Chief E-commerce Officer who can pull together lines of business and lead them in one direction.
• Implement basic E-commerce capabilities immediately.
• Leverage corporate assets to do things that the dot.com challengers can not.
• Inspire a climate of creativity, technical sophistication, and optimism for transformation.
• Expect reinvention to be gradual but timely and with the continual motivation to succeed.

Change from Traditional way

The web doesn't change the importance of relationships in business, it just makes business relationships easier to develop and manage. All those things a company have been doing offline to build relationships and reputations now have online equivalents that are cheaper and more scalable.

To eliminate skepticalism from the above statement here are few examples of traditional business relationship-building tools and their more-scalable online equivalents:

Traditional Tool: Company Calendar
Online Equivalent: Twitter
Insurance companies, dentist office and accountants love to print calendars for their customers. They're nice gifts and they're a way of keeping the firm's name in front of customers all year. Of course, the firm ends up paying thousands of dollars for the printing and the mailing, and most people end up throwing out the calendars.
In the online world, there's a better way to keep your name in front of people. It's called Twitter: By creating an active Twitter account that provides useful information about your industry, you show-up regularly to your followers, provide useful information, and spend no money.

Traditional Tool: Golf Outings With Prospects
Online Equivalent: Facebook
In the traditional world, golf is a popular way to get to know and build trust with prospects. After all, if you see someone struggle through 18 holes, you see different sides of that person, which helps you understand the kind of business partner they'll be. Facebook is a far cheaper and less time-consuming way of getting to know a potential business partners. Just like on the golf course, you get a sense of what's important to them and how they spend their time outside of the office.

Traditional Tool: Chamber of Commerce Membership
Online Equivalent: Same, but companies get more out of it.
Online tools don't replace real-world participation in organizations like your local chamber of commerce, but they do allow you to get more out of them. Instead of going to a chamber event and spending time with the two or three people you know well, you can go to the chamber event and have meaningful interactions with the dozens of people you've connected with and built loose relationships with over Twitter, LinkedIn and Facebook. These relationships give your business more visibility in the community.

Traditional: Word-of-Mouth Hiring Recommendations
Online Equivalent: Same, except the word-of-mouth happens on Twitter, Facebook and LinkedIn.
In the traditional world, you might put ads in the newspaper when you want to hire somebody, but you know that your best recommendations will come from friends-of-friends. That's also true online -- only that online there's more scale. In the offline world you might tell five of your friends about a job. In the online world, a tweet about a job opening might be seen by 50 people who know you, and know what kind of person would fit your job opening.

Traditional Tool: Monthly Newsletter
Online Equivalent: Blog
Many small businesses send out monthly newsletters to keep their customers and potential customers up-to-date. The printed newsletter helps maintain relationships, but it's a hassle to pull together, and costs hundreds of dollars. You can do the same sort of relationship maintenance with a blog. A blog is cheaper, and it's not as hard to produce. Plus, with a blog, your articles get indexed by Google and show up in search engines, thus building new relationships.

Traditional Tool: Client Birthday Cards
Online Equivalent: Same, except with tools like Facebook they're far easier to manage.
Birthday cards are a great way to nurture relationships -- only you need to be very organized to pull them off. Not only do you need to know when you friends' birthdays are, but you have to remember the birthdays and actually write notes. Facebook solves this problem. If you simply subscribe to Facebook's bithday email, you'll get alerts of all the birthdays of the people you're connected to a few days before they happen. That means you can use the time you would have spent keeping track of birthdays to send more and more thoughtful notes. In other words, you can have more personal interactions with a larger group of people.

New Business Models for the Era of Rampant Change, Knowledge Enterprise, Pervasive Globalization, and Increasing Complexity

Why New Business Model?

The old principles no longer work in the new economy. Businesses have reached the old model's limits with respect to complexity and speed.
The real problem is "a ruinously dysfunctional mismatch between today's business environment and the classic business model... Quite simply, the wrong model may transform a company into the vehicle of its own death.

Changes That Call For a New Business Model

o Business environment: It evolves to one with profoundly more complex industry dynamics and fading industry boundaries.
o Competition: Today, the basis of competition is capabilities and knowledge.
o Value Creation: The value-added potential of many businesses is shifting toward knowledge, systemic innovation, and service-based activities.
o Extended Enterprise: Virtual integration, partnerships, strategic alliances and joint ventures, part of the extended enterprise, are becoming common parts of competitive strategy.

Conclusion

Web sites are under continual change and renovation. Experimentation and testing what works is “normal” on the Web but must be done at an aggressive pace. It is important to know where the business is going and how it is using E-business to either supplement existing commerce or establish new business. Be aware of the following common mistakes made when entering E-business:
 Underestimating the marketing required to drive attention to your web site – also known as the “If they build it, they will come” fallacy.
 Not getting partnership/supply chain relationships dealt with from the beginning.
 Underestimating the E-business response volume and the absolute demand for supporting 24-7 infrastructure.

E-Business

2010-05-25T18:51:00.000+05:00

MOEDES OF PAYMENTS IN E-BUSINESS

An e-commerce payment system facilitates the acceptance of electronic payment for online transactions. Also known as financial electronic data interchange (FEDI), e-commerce payment systems have become increasingly popular due to the widespread use of the internet based shopping and banking. A payment gateway is an e-commerce application service provider service that authorizes payments for e-businesses, online retailers, bricks and clicks, or traditional brick and mortar. It is the equivalent of a physical point of sale terminal located in most retail outlets. Payment gateway protects credit card details encrypting sensitive information, such as credit card numbers, to ensure that information passes securely between the customer and the merchant and also between merchant and payment processor. A payment gateway facilitates the transfer of information between a payment portal (such as a website, mobile phone or IVR interactive voice response)
From the traditional payment system, most businesses even the small e-businesses are migrating to the use of electronic payment systems namely: online credit card payment system, online electronic cash system, electronic cheque system, and smart cards based electronic payment system. The onset of e-commerce has given birth to electronic payment systems, which have answered new business needs that could no longer be fulfilled by the traditional payment systems. The use of cheques and credit cards in the traditional way has been revolutionized electronically. And the emergence of other systems to cater digital currency technology has also been greatly recognized with a lot of merchant account populating the e-business world.

Online credit card payment system

This is just an extension of the use of existing credit cards as an online shopping tool. Compared to its traditional use, it is seen to be more advantageous because of its privacy, integrity, efficiency and reliability in transaction and the convenience and mobility that it offers. The payment transaction can just happen in a breeze after sending your credit card details. This is by now the most popular method especially in retail markets.

Online electronic cash system

Commonly known as e-cash, this payment system is the computerized and improvised version of the paper cash. Digitally, it does value storage and value exchange but when it comes to converting it into other forms or value, it's got a limited capability. The convenience and low transaction cost that it has, makes it an attractive payment system to use online.

Electronic cheque system

This system is used by almost all e-businesses around the world replacing the need of traditional paper cheques. However, the functionality is much of the same way as the conventional cheque works. The electronic cheque document contains the name of financial organization, the account number of the payer, the name of the payee with the amount stated on the cheque. In replacement of the hand-written signature, a digital equivalent of signature is used. This is in the form of a computed number authenticating the cheque's account owner. This has now been globally used as one of the online shopping payment tools.

Smart cards based electronic payment system

This mode of payment has become highly recognized in many areas of e-business. Smart cards look pretty much the same as your credit cards but they've got memory chips and others even have microprocessors which store far greater information than credit cards do. This would mean that they have more security features compared to credit cards and even so with electronic cash system. Because of the encrypted information of smart cards, they are proven to be one of the most secured ways of doing online business.

Shopping on websites

In many countries the credit rating is a big issue, for those who don’t have any credit card or have bad credit or cannot afford a merchant account, they have different options, there are alternative methods of payments on e-commerce websites which can help you.

One of the most popular online e commerce payment methods is to pay via PayPal.
PayPal is an e-commerce business allowing payments and money transfers to be made through the Internet. PayPal serves as an electronic alternative to traditional paper methods such as checks and money orders. On October 3, 2002, PayPal became a wholly owned subsidiary of eBay A US action giant. Currently PayPal operates in 190 markets, and it manages over 175 million accounts (70 million active accounts). PayPal allows customers to send, receive, and hold funds in 19 currencies worldwide. PayPal operates locally in 13 countries. Residents in 190 markets can use PayPal in their local markets to send money online.

PayPal allows anyone to send and receive payments for both online and offline goods. The best thing about PayPal is its ease of use and no verification bounding of credit rating. All that one needs to do is verify their address and personal information. PayPal account holders can simply divert their customers to a PayPal order checkout page, or if the type of PayPal account allows it, payment can be done directly into a PayPal account using only the email address tied to the account like payments@abccompany.com.
Another e commerce website payment method is Google checkout. This service is run by Google, owner of the famous search engine. Google checkout is fast becoming a popular and favorite payment method for many e commerce website owners. The reasons, for starters are that the service is user friendly, easy to use and extremely reliable. When you think from the business owner's end, Google Checkout typically charges less merchant fees than PayPal.
Newer payment methods are also making their presence felt. One of such an innovative payment method available online is iKobo. The way iKobo works is that any customer can choose a payment source, which can be a bank account or a credit card, and tie up that payment source with an iKobo account.
When a customer wants to pay an online website/vendor, all that he needs to do is specify the amount and pay the service fees on top of that. The first time a customer does this with a particular vendor; the vendor gets a VISA debit card from iKobo shipped to him/her. This card issuance is a one time procedure. Then on, if anyone needs to pay an online vendor that has an iKobo debit card, all they need to do is specify the card number, and the payments gets transferred.
VeriSign Inc. is the leading provider of digital trust services that enable everyone everywhere to engage in commerce and communications with confidence. VeriSign’s digital trust services create a trusted environment through four core offerings - Web presence services, telecommunications services, security services and payment services. Sign was founded in 1995 as a spin-off of the RSA Security certification services business. The new company served as a certificate authority (CA) — a role it still fulfills --and its initial mission was "providing trust for the Internet and Electronic Commerce through our Digital Authentication services and products." VeriSign now has more than 3,000,000 certificates. It is the largest CA behind the encryption and authentication on the Internet. According to VeriSign, its payment gateway processed over $80 billion in payments in 2008. VeriSign is well known for the VeriSign Secured Seal, which is an outward expression of a Web site's authentication and encryption commonly posted to VeriSign SSL Certificate customers' Web sites.

Electronic Payment Schemes By Dr Phillip M. Hallam-Baker
Source: http://www.w3.org/ECommerce/roadmap.html

A Layered Protocol Model
Three layer model is used to compare payments schemes.

Policy -- The semantics of the payment scheme. This includes refunds policies, and the liabilities incurred by customers, merchants and financial institutions.

Data flow -- The requirements for storage of data by and communications between the parties. This includes not only the data flows for payments themselves but also for refunds, account enquiries and settlement.

Mechanism -- The methods by which the necessary security requirements for messages and stored data are achieved.

All three abstraction levels are tightly coupled since policy makes requirements of data flow and data flow makes requirements of mechanism.

Payment Protocol Models

Cash -- Cash consists of a token which may be authenticated independently of the issuer. This is commonly achieved through use of self authenticating tokens or tamper proof hardware.

Cheque -- Cheques are payment instruments whose validity requires reference to the issuer.

Card -- Card payment schemes provide a payments mechanism through the existing credit card payment infrastructure.

Such schemes have many structural similarities to cheque models except that solutions are constrained by that structure. A key feature of card payment systems is that every transaction carries insurance.

List of Internet Payments Schemes and Proposals

Anonymous Internet Mercantile Protocol, Anonymous Credit Cards AT&T Bell Labs
A card model protocol which implements a policy which balances strong guarantees of confidentiality with the needs of law enforcement. A formal approach is employed with comprehensive details of mechanism and data flow.
BankNet Electronic Banking Service Marketnet
Full electronic banking service offers ability to write cheques. Uses PKCS envelope formats.
BarclayNet Barclaycard
An electronic mall run by one of the worlds largest credit card companies. Preventing disclosure of the credit card number to the merchant is thus superfluous and a simple secure socket communication mechanism to prevent eavesdropping is sufficient.
CAFE CAFE
A cash based scheme with strong guarantees of anonymity. Backed by a 13 member European consortium. Details are not avaliable at present.
e-Cash DigiCash
Anonymous digital cash. Few details are given about the specific scheme employed but voluminous archives of papers by the companies founder, David Chaum are provided. Mark Twain Bank have deployed this scheme.
Electronic commerce payments Financial Services Technology Consortium
No public details on this project are available at present.
Electronic cheque Financial Services Technology Consortium
A cheque scheme designed to provide an upgrade path from the existing cheque system.
Green Commerce First Virtual
First Virtual's Green Commerce payments model is one of the first payments schemes to become established on the internet. The major novel feature of this scheme is its `satisfaction guaranteed' policy which protects customers from dishonest merchants by allowing them an unconditional right to refuse payment for individual items. A statistical mechanism is used to identify over frequent use of this option and exclude habitual non-payers. Identification of customers is via an email call back loop scheme.
Internet Keyed Payment Protocols(iKP) IBM (Zurich & Watson Labs)
A card based model of payment which mainly addresses the questions of data flow and mechanism. Public key cryptography is used to ensure the privacy of a customer's card number and PIN number and provide non-repudiability. iKP has three options,, 1KP, 2KP and 3KP in which the acquirer alone, acquirer and merchant and acquirer merchant and customer respectively have a public key. See also the SEPP protocol which is based upon iKP.

It is evident by above that the electronic payment system is most prevailing and desired type of transaction mode. From the biggest corporations to the smallest retailers, almost everyone now is dependent in most electronic payment systems available online. It is best to have an in-depth knowledge on these things before jumping right away to any of them. It's always better safe than sorry in the end.