Issues in Electronic Commerce

 

 Issues in Electronic Commerce

This section discusses some pitfalls and issues on the way to electronic commerce, and addresses some potential solutions. For now, we consider them as variables external to our model, but import to our understanding of electronic commerce. Whereas our ten business value propositions require further empirical commerce. Whereas our model, but important to our understanding of electronic commerce. Whereas our ten business value propositions require further empirical validation, based on organizations? Experiences with the theory and its implementation, the issues covered here require some more conceptual work to be resolved. Future work to test and confirm the value propositions will need to take these issues into account.

In this section, we discuss the following issues:

n         Customer relations

n         Privacy and security

n         Electronic payment systems

n         Mass-marked adoption

n         Implementation issues

n         Organizational commitment

4.1.7    Customer Relations

       Early experiences with electronic commerce in the banking industry, which has been a pioneer in the use of electronic system, can be used to learn of some potential dangers and issues to be taken into account. The use of Automated teller machine and electronic home banking systems has increasingly allowed customers to bank outside of traditional bank facilities, for most of their usual transactions. This was consistent with the cost-savings strategy of most banks, which discovered that electronic transactions were about seven times less costly compared to the manual handing if these transaction by a bank teller.

   Nevertheless, the fact that customers ? Only contact with their banks was through(rather unsophisticated) electronic interface, and the major difficulties in interfacing the legacy systems if a typical bank ,prevented banks in many cases from selling additional products to customers. In some European markets, selling savings products to customers through with customers through theirs extensive distribution network similarly, the decrease in human interaction with customers could also lead to express comments, criticisms or requests for new products while interacting with machines.

     This should lead to a design of electronic commerce systems which incorporate capabilities for customer understanding and for customer understanding and for proactive selling of new products.

4.1.8 privacy and security

         Another potential source do trouble are customer concerns with privacy and security, which could lead to a backlash against suppliers using such systems, or simply to customers avoiding the use of these systems. Some believe that customers will be reluctant to provide their suppliers with data on their demographics information, buying patterns or product needs. Unfortunately, this data is critical in many of the strategies we described earlier (mass-customizing, customer relations, pro-activity, etc.) these are two ways of handing these concerns, either customers can be made aware of the benefits of volunteering this data, or material incentives can be offered to customers to attract them, this is already used in contests or coupon offers, and most customers would be ready to volunteer personal data id offered frequent-flyer miles in exchange ,for instance.

4.1.9 Electron payment systems

Electronic business transitions can only be successful if financial exchanges between buyers and sellers can occur in a simple, universally accepted, safe and cheap way, various system have been proposed, some of them based on traditional mechanisms (e.g. credit cards accounts ) while others rely on new designs, such as electronic money. The key here will be to find a few widely accepted MasterCard and visa on one security standard for credit card transaction over the internet, and its banking by most major software vendors is one step in the right direction. This doesn’t diminish the need for more specialized systems, for instance in exchange for information or services. These new payment mechanisms will in turn enable new business models such as payer-article newspapers.  

4.1.10               mass-market adoption

     A key to the success of consumer electronic commerce system is certainly a wide customer adoption of such technologies, it is not clear when this will happen and, although there are lots of learning and benefits to be derived now, the mass-market adoption of such technologies will take a few mire years to come.

     The following figure shows some of the factors linked to new technology adoption by consumers (the factors adversely affecting adoption are in italics).

     The reluctance of people to change is certainly a key issue here, as is the availability of appropriate technological platforms in every home. The emergence of the low-cost” internet computer” and if interactive television will undoable quickly change the marketplace. As with most new technological, adoption is linked to the supply of the right products, rather than demand. This is because customers not familiar with new technologies cannot define their needs, and will understand the technology possibilities only through innovative products.

   We don’t have today quantitative information on the links between the factors shown above and new technology adoption, but future research might help clarify these.

   This section discusses some implementation issues and the managerial implication of creating, managing and getting the benefits of an electronic commerce system. Basically, it revolves around the realization that technology alone will not solve issues or create advantage issues linked to people resisting new concepts and ideas. It also needs to support a clearly defined and well communicated business strategy.

   We adopt here a summarizes model of an organization, and the alignment between these different components as the main issue in establishing a sustained competitive advantage. Some authors have called this alignment the “fit”, and argue that only companies that know how to create this fit and maintain it through various kinds of environmental change will be successful in the long term.

These issues of alignment or balance relevant to electronic commerce system are

l         Between strategy and technology

l         Between technology and the organizational processes

l         Between technology and people

We e extensively covered the link between technology and the strategies they enable in the section 3. it should be clear by now that these systems can be key in differentiating a company from its company from its company from its competitors. Nevertheless, technology in itself will not be sufficient to achieve that: the level of service provided to customers and the relationship that can be established with them will be also critical in preventing customers from switch providers. Only when the loyalty of customers will be high, through their investment in the relationship with their suppliers and sometimes the business and technologies integration of the supplier in their customer processes, will a sustainable competitive advantage be created.