Home Latin America III 2001 Three Sides to E-Business Success: Business System Convergence

Three Sides to E-Business Success: Business System Convergence

by david.nunes
Luiz MeislerIssue:Latin America III 2001
Article no.:11
Topic:Three Sides to E-Business Success: Business System Convergence
Author:Luiz Meisler
Title:Regional Vice-President
PDF size:36KB

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Article abstract

Business systems, driven by the convergence of IT and telecommunications, are themselves converging. Centralised systems are available on a company-wide, indeed worldwide, basis through the Internet. Purchases made through public B-2-B electronic markets directly drive internal controls, accounting and production planning. Systems can be managed centrally and drive internal and customer accessed systems alike. Call-centres, integrated with ERP (Enterprise Resource Planning) and CRM (Customer Relationship Management) systems and the Internet, bring an unprecedented level of customer and sales support.

Full Article

In the global economy, one of the few constants is change. Dealing with constant change has forced a growing number of Latin American companies and organisations to take a long, hard look at the way they conduct business. And one of the strategies they’re embracing to survive-and thrive-is the Internet. Every ten years or so, a new technology emerges to fundamentally change the way we conduct business. Twenty years ago mainframe technology revolutionised the world of business. Ten years ago client/server systems transformed management. Today, the Internet is providing a world of difference to the business community. Latin American economies mostly ‘skipped’ the client/server technology transformation. There is no better time than now for them to focus on the new business management technology, the Internet, to become more efficient business. Embracing the Internet allows any company to rapidly climb up the ladder and become an international player. Proactive organisations know that they can use the Internet to deploy dynamic, database-driven web applications to sell products and services online, as well as expand markets, improve customer service and retention, and increase efficiencies throughout the enterprise. Leveraging the power and reach of the Internet is the best way for any company to increase top-line revenue and lower operating costs. More specifically, there are three ways Latin American companies can harness the Internet for e-business success-on the buy side, inside and sell side. buy-side e-business strategies will allow any kind of company, large or small, local or global, to realise immediate savings by using the Internet as the primary medium to communicate with suppliers and every player involved in the value-chain. Internet procurement software allows employees to make all purchase requests through an online catalogue. Each request automatically generates an online purchase requisition, which is submitted and subsequently approved or denied, according to predetermined parameters. Automating the procurement process will enable companies to have more control over their employees’ expenditures. The cost and time required to manually create and send a purchase order will be drastically reduced. Statistics from PricewaterhouseCoopers show that the cost of an online transaction is 10 times cheaper than doing it manually. Using the Internet to set up a just-in-time system for procuring product will reduce inventory costs. And centralising the purchasing process will enable companies track exactly how much they spend with each supplier; in turn, it can use this information to negotiate and/or renegotiate future purchasing agreements. Also, the Electronic Market Places or Exchange model allows companies to extend reach and allow more interaction with suppliers and the supply-chain, while dramatically reducing operative costs. inside e-business strategies will further cut operating costs and increase employee productivity. In a pre-Internet environment, installing, managing and updating an employee’s computing resources almost always required an IT staff member to make a physical trip to the affected workstation. Each workstation, in turn, was tied to a specific, local server that was responsible for a business unit’s critical applications and communication services. These servers required their own firewalls, processors, back-up systems and dedicated staff. Each office developed its own computing characteristics, supported by increasingly differentiated cultures. Communications across IT departments became mired in bureaucratic red tape and parochial approaches to managing resources. It’s taken a while, but those old IT fiefdoms are starting to crumble, thanks in part to the genesis of the ‘e-business’ phenomenon now sweeping the globe. As companies transform themselves into e-businesses, they also transform their everyday business applications-often beginning with their financial systems. Suddenly, those systems need consolidation, they need to be available online through the Internet, and they need to be centralised to lower administrative costs, reduce redundancy and simplify enforcement. Consolidating IT resources in a single location breaks down barriers-not just between business units but between different areas of the IT department. All applications and resources are managed from a single location. For example, by using the web browser as the generic application client, IT staff no longer have to visit each affected desktop when an application is updated or a user is added. Staff that were tied to managing and maintaining proprietary systems can, in a consolidated environment, be deployed to ensure the computing systems are available 24 hours a day, seven days a week. To be cost-effective, companies can migrate their enterprise resource applications to an Internet architecture, where the applications are managed centrally and accessed by clients with a web browser. Unlike the client/server platform, this architecture can be scaled for application and user growth, and it will reduce application downtime since all operations are centrally managed. Unlike the mainframe, Internet-driven applications are cheaper to run and can provide a more compelling user experience. An Internet architecture also serves a mobile workforce. Whether they log in via a computer or from a palm pilot, each employee will be able to conduct business as if they were at the office. All that is needed is a user name and password, and a directory server will control user access to information. From a palm pilot, replication technology now makes it possible to download snapshots of the corporate database while working offline, and to upload any changes once the employee reconnects to the office. With the most current data, sales and service professionals can better serve their customers. With the Internet as its technological foundation, Latin American companies can leverage their current IT infrastructures without incurring too many additional costs. Since more and more software vendors are now selling software for the web, an Internet architecture is also the best place to start planning for future growth. sell-side e-business strategies (customer relationship management) will build on the buy-side and inside strategies already in place. Using the Internet to provide information to customers is a natural fit for companies because the web allows customers to make informed decisions in a pressure-free environment. One need only look as far as online trading to see the potential benefits. Since companies will be supplying information digitally, customers will now be able to obtain information tailored to their needs faster than ever-immediately, to be more specific; and they will be able to mix and match variables until they come up with the ideal product or service that satisfies their needs. This convenience can lock in customers because of the ease of doing business on the Internet. Entel Chile is an excellent example of a Latin American company that uses the Internet to provide value for its customers. By combining its web-site operations with its call centre, telecom companies can serve customers seamlessly-no matter how they contact the company. This increased customer service will improve the closing ratio, which, in turn, will help generate more revenue. For example, today’s call centre has taken on a new role as an interaction hub, or multi-channel contact centre that is capable of handling customer contacts by way of inbound and outbound calls, e-mail, faxes and the World Wide Web. Where conventional thinkers once viewed it as nothing more than a cost centre, the modern call centre now plays a key role in the company’s ability to create and extend competitive advantage. More specifically, improved access to critical data makes it possible for organisations to increase top-line growth through improved customer service, which, in turn, results in higher sales and higher rates of customer retention. And integrating customer-facing operations with back-end enterprise resource planning (ERP) systems will also result in significant cost reductions. Call centres go far beyond responding to and appeasing customer enquiries or complaints. They’re rapidly evolving to provide critical services that generate revenue. In a report issued last year, Aberdeen Group, a Boston-based consulting firm, said that for most organisations, customer service was now the number-one competitive weapon; “…as a result, advanced Customer Relationship Management (CRM) solutions are helping companies improve how they react to customer issues and are enabling call centres to pro-actively solve customer problems.” The integration of the three strategies is essential to give corporations a true 360-degree view of their business and customers-no matter which channel this information comes from: internal systems, sales and service contact, customer access via the web, or the call centre itself. The Internet will help Latin American companies boost revenue, improve business efficiencies and retain customers. Increased sales will funnel from the web channel and the higher level of service that it can provide to customers. Once customers have invested their time and effort to do business the new way, the likelihood they will defect to a competitor is greatly reduced. In essence, companies can use the Internet to help lock in customer loyalty. Conclusion Latin American companies will also cut costs by using the Internet internally for all their applications. The use of customer relationship management applications will help ensure that companies always know their best customers. Using information wisely is the key to profitability in the information age.

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