e-commerce

A form of knowledge management (KM), a decision support system (DSS) is basically an interactive, flexible, computer-based system that aids in the process of decision-making. Decision support systems streamline the process of turning decision into action are key to the success of e-commerce. Within the world of e-commerce, companies have built data warehouses containing an incredible amount of information on customers, suppliers, and their transactions with them; this information would be useless without DSS. Decision support systems provide companies with the ability to query, sort, filter, analyze and report this information to facilitate intelligent decision-making. So, what are the e-commerce-driven DSS?

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The rapidly changing e-marketplace is forcing companies and their enterprise partners to become more responsive to their customers. There are several forces in play putting pressure on companies to better manage their supply chain, improve logistics operations and manufacturing efficiency while remaining responsive to customer demands and constantly changing market conditions. These forces are:

• The trend toward worldwide dispersion of manufacturing and distribution facilities due to the increased demand for customized products.
• Channel unpredictability resulting from the new technologies that allow companies to better manage customer demand. This requires coordination of several distribution channels.
• Responsiveness over efficiency is disrupting traditional inventory management processes as customers drive the need for faster deliveries and increased product customization.
• Companies’ willingness to accept lower margins to increase market share as they redesign supply chains to increase efficiency and eliminate delay, error, excessive cost and inflexibility.

These forces are driving manufacturers and distributors to transform their operations to become more responsive to retailers and customers. Under pressure to reduce costs, decrease order cycle times and become more operationally efficient, companies are implementing new technologies to integrate processes and attain collaborative information sharing and planning capabilities. This means that in a real sense, information is replacing inventory.

With the advent of growing supply chain capabilities, companies are facing the prospect of managing external inventory that it never actually sees and does not own. To maintain adequate control of this ghost inventory a company must become adept at controlling information about this inventory, specifically, where it is in the supply chain at any given time. Failing this, a company is forced to maintain a physical inventory of products, which increases overhead and inefficiency.

The rapid growth of the Internet and the adoption of its use as a platform for business operations has enhanced the ability of companies to integrate their business processes through collaborative planning to synchronize internal assets and production with external demand and supplier capabilities. Today, as Internet technology is adopted globally and supply chain strategies converge, companies glean a competitive edge by reducing the cost of goods sold, improving customer service, building global brands and increasing global supply chain visibility as they move products to market quicker.

A form of knowledge management (KM), a decision support system (DSS) is basically an interactive, flexible, computer-based system that aids in the process of decision-making. Decision support systems streamline the process of turning decision into action and are key to the success of e-commerce. Within the world of e-commerce, companies have built data warehouses containing an incredible amount of information on customers, suppliers, and their transactions with them; this information would be useless without DSS. Decision support systems provide companies with the ability to query, sort, filter, analyze and report this information to facilitate intelligent decision-making. So, what are the e-commerce-driven DSS?

Read the rest of this entry »

Electronic commerce is disruptive to merchants by driving some kind of radical development that changes their business so severely they suffer setbacks. This problem was faced most dramatically by traditional, brick-and-mortar businesses that couldn’t adapt or didn’t adapt fast enough to the emergence of disruptive technology. Companies naturally play to their strengths, but many have suffered decreased market share or even bankruptcy when their strengths suddenly faced obsolescence.

International Business Machines (IBM) is such a company. Busy playing to the large corporations, IBM missed the boat with the introduction of the personal computer (PC). Although IBM eventually reacted effectively to the rise of the PC, its strength was to play to the heavy-hitters. In doing so, they missed a huge opportunity, and a significant opportunity to lead the market, because the tremendous growth in PC sales lay outside the big companies IBM played to. Therefore, IBM’s market share, once 80%, plummeted to the single digits. This is an example of a disrupted merchant, what about the disrupter?

While IBM and like-minded companies play from a position of strength, disruptive innovators play from a position of weakness. Sun Tzu said, “If you know the enemy and know yourself, you need not fear the result of a hundred battles.” A disruptive innovator knows he or she can’t compete with an established business, with established customers, so they have to create a new strength from their competitors’ weaknesses. Jeff Bezos, founder of Amazon.com is just such an innovator.

In 1995, Amazon.com debuted as an online bookstore that maintained about 2,000 titles in its Seattle warehouse. Most of Amazon’s orders were placed directly through wholesalers and book publishers, so no warehouse was necessary. Amazon would simply receive a book from the source and then ship it to the customer. At any one time, Amazon would only have about 2,000 titles in its warehouse. Amazon had virtually no overhead, and maintained no inventory. This became Amazon’s strength and traditional brick-and-mortar stores like Barnes and Noble and Borders couldn’t compete. In fact, had they not entered the electronic marketplace themselves, they might be nothing more than a memory today. While electronic commerce is often disruptive to merchants who don’t recognize the waves of change, it is continuous to consumers who are willing to ride the wave.

Electronic commerce is continuous to consumers who change with the growing technology. I began working with computers in the mid-80s. My first computer was the floppy-based IBM PC Portable. To use this computer, I had to learn DOS commands and eventually became quite productive using Enable OA. Now, over 20 years later, I’m a dedicated Mac-user at home and a reluctant PC-user at work. Over the years, electronic commerce was continuous for me, as I grew with the technology.

I was recently asked, “What one thing would you say has had the most profound effect on telecommunications in the past fifty years?”

The general answer around the table was, as one might imagine, “the Internet.” I thought about this for a moment and realized this answer was too simple. Citing the Internet as having the most profound effect on telecommunications is akin to comparing the impact of oxygen to mankind.

Without a doubt, the Internet has had a profound effect, but more specifically I believe it was the introduction of the Mosaic browser, that has had the most profound effect on telecommunications in the past fifty years. On March 14, 1993, Marc Andreessen and Eric Bina of the National Center for Supercomputing Applications (NCSA) Software Development Group introduced the Mosaic 0.10 for X-windows. Mosaic was (is) a simple, yet powerful graphical browser that allowed users to essentially travel through the world of electronic information using a point-and-click interface. Hypertext Transfer Protocol (HTTP) was developed between 1989 to 1991, but it didn’t really take off until there was a useful browser to display inline images. With the introduction of the Mosaic browser the internet exploded with activity. The browser for the fist time brought the world wide web to the common man. One didn’t have to possess programming knowledge to access information on the internet because the complex methods used to extract the information were hidden within the browser application. What’s more, Mosaic was free for non-commercial use.

Also, about the time Andreessen and Bina were introducing Mosaic to the world, Congressman Rick Boucher authored a law, which allowed the first commercial traffic on the Internet. These two events led to the enormous growth of online business (e-commerce). The Internet provided an unprecedented opportunity on a global basis for businesses to interact with and reach out to customers without limitations such as physical location or time zone. The overwhelming success of e-commerce would not have been possible at that point-in-time without the Mosaic browser. According to the Computer Desktop Encyclopedia, Mosaic was “the app that caused the web to explode.”

Mosaic…the biggest thing to happen to telecommunications in 50 years!