Value and Utility of information for e-Business

Value and Utility of information for e-Business








INDEX
1.1  Introduction…………………………………………………………………………………………………………….
1.2  Background Literature………………………………………………………………………………………………
1.3  Research Objective…………………………………………………………………………………………………..
1.4  Research Question……………………………………………………………………………………………………
1.5  Research Methodology…………………………………………………………………………………………….
1.6  Data Collection…………………………………………………………………………………………………………
1.7  Secondary Research………………………………………………………………………………………………….
1.8  Research Findings and Analysis…………………………………………………………………………………
1.9  Recommendations……………………………………………………………………………………………………
















Value and Utility of Information System for Undertaking e-Business
ABSTRACT:
This paper will try to build a framework for value and utility information has in building any successful organisation. It will highlight what roles this information play in the success of organisation.
This paper provides a general idea about the value which firms drive from the information which they get from developing extensive information system in their organisation for undertaking online business. Other part of the paper will try to highlight the various requirements and the strategies companies’ follows in order to develop a successful information system for the company.
General Terminology
Information system, IT strategies, Transaction cost theory etc
Keywords
IT/IS Strategy
1. Introduction
1.1 Overview
In today’s era when businesses are information driven and companies are spending more and more amount of their resources in order to get the information about their customers, market trends and their competitors. This information hunt from the companies requires an extensive information system which can fulfil all their requirements of real time valuable information (Powell P. (1999)). For getting the correct and real time information which can add value to their company they need extensive information system.
During the last several years it has been said that we are living in information age and information is impacting every aspect of business sphere. The amount of information stored in the IT systems of companies get doubled every year and still companies are hunting for more and more information every time they get an opportunity for getting that.
But when we consider the case of online business then information is playing more vital role than in the case of the offline businesses. In online business more amount of real time information is required by the companies since the communication process is really fast.
 
The Freemium-Premium puzzle above highlights how value of information is changing in today’s dynamic business environment (McManus (1999)). The upper line in the puzzle shows the information provided by the service providers to their premium customer without online channels. This information comes at some premium price to their customers.
The line below the premium line shows the information which is provided by the information provider at free of cost and this information is provided through online resources (M.J (1989)). Though the value attached with online information is more but the price for that value decreases down since the channel provides cost effective distribution system.      
1.2 Background Literature
Real Value of Information
The value of information for any business is decided by the fact that how much value that information has added for the customer, how much help it has given to carry out the processes of the business and what exclusivity it provides to the owner of the business (Sanden,B (2000)). Since a business is driven by the information and valuable information can stand a business apart from its competitor by providing the competitive edge to the owner.
A general framework for deciding the value of information for the business can be given as follows:
       
1.      Relevance (to the customers): Any information can’t be valuable until it creates value for the customers it is serving to. Also relevance depends upon the quality it has for the customers (Melhuish,P (1995)). Quality relates to the appeal, accuracy, reliability and competencies of the information. There is lot of difference between analogue and digital information. Another criterion for determining the quality of information depends upon the recent and urgency of the information. Since digital information can be provided urgently and also gives updated information hence serves both the criteria of quality information.

2.      Exclusivity (by the provider): This factor is related to the service provider, while relevance of the information is attached to the customer who is getting the services (Rogerson,S (1996)). Since real time information can give a cutting edge to the service provider and proved to be competitive advantage for them. With the same information available at many places a strong brand image of the service provider attracts the customer towards the service provider. 

3.      Processing’s (IT system capabilities): The intrinsic value of the information for a service provider is present into the value chain of the information. Value chain of the information here means that the production or collection of the information, processing’s of the information, distribution of the information through various channels and access of information to the final user of that information (Little, S. (1999)). For example value chain of any research report sold online starts with the production of the report, uploading of the report on web, selling it through online channel and then access of report from the customer.

4.      Channel (Information distributor): The channel makes value of information different for the information provider. The same information provided by two different channels has different value. For example taking the case of the printed hard copy book and the soft copy book (Munro, M. (2000)). Any reader would like to pay fewer prices for the soft copy of the book than the printed copy though the information is exactly the same.
 1.3 Research objective
The objective of the research is:
*      To find out the value of information in e-Business environment
*      To find out importance of information system for businesses
1.4 Research Question
The research questions which will be explored in the study are as:
·         How information smooth out the every business function like SCM or CRM?
·         How information systems utilize the real time information?

1.5  Methodology and approach

The research will be exploratory in nature in order to highlight the value of information for the online business and will try to develop the general frameworks and strategy in the company for building information system. Secondary research will be carried out with the help of historical development and research which has happened so far in this context and main source of the information for the purpose would be various information system journals which contain the desired information.

1.6  Data collection
The data collection process will involve the secondary research methodology where related literature would be searched for in order to find out the information on the value of information for online businesses. Generally related data would be available in various journals and books which provide information on information system in organisations.  
1.7  Secondary Research
Benefits of the real time information into e-Business
Since e-Business survives on their capability to providing ease and convience to their customer. But since the trend of e-Business is in nascent stage till now and customers are quiet sceptical about the e-Business so the value of information provided by the information provider increases within e-Business (Gardiner,V. (1992)). Since the e-Business can’t prevailed without the real time information they provide to their customer in order to make their customer comfortable and confidant in making their decisions.
There are four phases in which information system affect the e-businesses which are as follows:
1.      Automate: The information presented in the initial phase of the business in processed by the information system working as the clerical staff for the organisation (Salmela,H. (1996)). These information systems provide improved transaction processing and greater reliability.
2.      Informate: After the automation function next impact of the information system was on the managerial functions. They helped the organisations in the improved inventory management, procurement process and production management as well (H-G (2001)). The impact of the information system became indirect so it was not so easy for the organisation to measure their impacts.
3.      Transformate: In this phase of information system scope of the information system has widened very much and the information system has become responsible for the various business issues like the marketing, suppliers and the customers (Hackney, R. (2001)). The benefits of this stage were improved customer satisfaction rate and impact on the strategic value of the business as well.
4.      Transfigurate: Here in this stage of the information system internet has changed the fundamentals of the business in the online business processes (McBride, N (2002)). The various benefits of this phase were the inter networking between the various business partner and the secure network which allowed enhanced business communication for the users.


E-Business Models and Information requirement
Various e-Business models prevailing in the current business scenario are as follows:
  1. Click and mortar
  2. Virtual merchant
  3. Bit vendor
  4. E-auction
  5. Catalogue Merchant
Depending upon the above e-Business models value of information varies from one model to other as in case of auction information has great importance and also this information has to be routed through the secured channel in order to carry out the processes in specific manner (Peppard,J, (2001)). While at the same time information requirement in case of catalogue merchant is not that extensive and on other side the value of information for click and mortar business model is also very crucial since this model affect the purchase decision of the customer.
Since at click and mortar e-Business model customer make their choices based on the features shown on the web. And then customer place order with the supplier which are supplied by the supplier (Rands,T (1992)). Bit vendors are web based sellers which sells their merchandise online and their information requirement is also very extensive since the whole business depend upon the customer information accessing capability and ease of use provided by the supplier. 
E-CRM and E-SCM  
Customer relationship is the new buzz word for the new generation business. Maintaining the good relationship with the customer can help the business to grow in the long term since the loyal customer of the business can give competitive advantage to the business (Porter, M (1006)). Also supply chain management is very crucial for the efficient functioning of the businesses.
Now with the availability of the real time information with the companies both the business practices has become technology driven since the information works as the driving factor for the businesses. Some of the important difference made by e-CRm is as follows:
1.      Develop database driven relationship management system which is cost effective for the company and effective in longer term
2.      Online facilities which enhances ease of use for the customers like online bill presentment and order taking
3.      Customer online enquiries can be answered in much faster time
4.      Online transactions provides customer time convience
5.      Fine tuning the segments and offerings the products according to the customer requirement
6.      Improving retention through customer satisfaction improvement programme
7.      Expand customer mind share and wallet share
8.      Provide competitive advantage
Supply chain management programme are also enabled through technology by the companies and the technology requires extensive information system which can give real time information to the company which enable the information system. Online supply chain management system has many advantage over the supply chain which is prevailing from ancient time which is not technology driven (Zmud,R.W. (1999)). e-SCM automate the business processes since in these process there is no manual interference is required to carry out the process. As we take the case of the order placing and procurement process in the big companies. For example companies like Wal-Mart which everyday needs lot of inventory for their business (Peppard, J (1996)). So these companies have extensive information system for their business which orders the required inventory as and when the level of inventory goes down to a particular level of inventory and automatic signal goes to the supplier and supplier provides the goods to warehouse. Some of the advantages of e-SCM are as follows:
1.      Formation of team inside the company in order to process easy to use administration
2.      Process are permission controlled from the executive which are located worldwide and a proper authority hierarchy can be well maintained
3.      Products can be modelled virtually through the technology hence the information system can help in designing and procuring better products
4.      Online tracking of the movements of products worldwide which helps the companies to build the just in time inventory system throughout the company which can save the cost for the company
5.      Better inventory management system can be built using real time information for the company
6.      Automatic order processing systems can be build real time information working as the driving force for the system
1.8  Research findings and Implications
The present research has provided the insight on the subject value of information in e-Business in the organisations. The information collected by the businesses help in achieving competitive advantage to them. Since the all business processes which were initially done manually has now a days are technology driven. And the technology needs extensive information system which can provide the real time information to the business. This information collected by the information system is about the customers, competitors and market trends prevailing in the market.
This real time information collected by the information provide has value for the business only when the information provided has some relevance to the customers in terms of providing ease of use to the customers so that customer can use the process easily with the help of this information. For the business information is assumed valuable only when it can provide exclusivity to them in term of service provider is known for its capability to provide the exclusive information to the customer so as to enable its processes.
Also information system in the organisation helps in developing a step by step process for the providing convience to its customers. Initially information acts as the automation tool in order to automate the business processes. After that business processes act as the information resources and after that translation and transfugation process is carried out by the information system and hence information system has increasing usage for the e-Businesses and hence information is very valuable for the e-business.  
So managers should develop the efficient information system in the organisation in order to achieve the real time information which can benefit the business processes. Like real time information which is taken by the e-SCM software from the suppliers and other business partners help the company to manage their supply chain processes which includes the processes starting from the procurement process and ends up with the distribution of the physical good and services produced by the firm.
Hence to enable the e-Businesses in today’s dynamic business environment companies need real time information for processing the information system so that faster processes can be implemented and customer can be given convience and greater customer value can be generated by the business in order to increase customer satisfaction level.
1.9 Recommendations
1. Efficient information system needed to be developed in order to get the real time valuable system.
2. Businesses are information driven so business should thrive for more and more exclusive customer information so as to get competitive edge over other competitors.
3. Information systems should be such that they can create value for the customer and can give exclusivity to the business.
4. Companies need to make proper investment in their technology infrastructure so that they can update their technology in order to get ahead of their competitors.













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