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Sheffield Hallam University

Module: Digital Economy, Second Assignment

Tutor: Roy Butcher

Ali Sayyadi zadeh

Submission date: 18/01/2008

2750 words

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One of the most important modules in the MBA course was Digital Economy.The course started from September 2007 so the modules. In this essay I'mgoing to focus on reflecting on my learning on this module, my knowledge, my

expectation from it, my learning from it and how this module could help me tosuccess in the future as a businessman.

What did I know?

I graduated in business management 3 years ago and started to work as asales manager. I had learnt some aspects of Managing Information Systems,DSS, and E-Commerce. Those learning were unclear and inexperienced for me because I couldn't work or experience much of them. On one hand, lack of electronic infrastructure such as suitable internet connections, DATA lines or Wi Max Systems on the other hand the lack of knowledge of using electronic

systems in the business or working globally by the senior managers of thecompany which I worked for, were the most important reasons that I couldn'texperienced the Electronic Commerce or E-business.

I always think about doing things differently and finding a better way of doingthings so I started to persuade the manager director of the company tochange the software system of the company for the first step. The centraloffice of the company, the production system, inventory system were notworked integrated and online together which caused the company missedsome information or delay to respond to the customer's needs. Our companyfinance manager, I and another person from IT centre were responsible to findan integrated system for the company. This was my first opportunity andexperience to test my information in Electronic business and increase them.

What were my expectations?

According to my previous information experience I expected to know moreaspects of the E-Business world. Living in the UK, using electronic purchaseand payment, web based software, web based companies and etc, were themajor concepts that I expected to know more about them during the course.Moreover, I knew a lot about the globalisation and its positive and negative

effects on companies and economies, so I was curious to learn more aboutelectronic business and E-commerce in order to increase the depth of myknowledge in this field which definitely could enhance my ability in makingproper decisions in future as a manager in any organisation.

How Them Changed:

During the course I found the greater concepts of E-Commerce. The conceptsof e-commerce in my mind were limited to sell, marketing and purchase.While Learning E-commerce in Digital economy module, these conceptschanged and I found the more aspects of this knowledge in business. For

instance, I was working on E-Supply chain, E-portal and security directly and

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some other aspects of E--commerce indirectly, during this module. Some of these findings were:

E-Supply chain

Firms are increasingly embracing integrated Web-based or e-supply chainsbecause it is believed that e-supply chain will enhance the efficiency andcompetitiveness. It should be considered that implementation of integratedsupply chains requires sophisticated technical infrastructure, hugecommitment from suppliers/partners, tremendous resources, a great deal of management time and energy and wide changes. “Therefore, beforeembracing e-supply chains, firms need to understand different options for creating supply chains from among which they can pick the option they cansuccessfully implement, keeping in view their resources and their ability tohandle associated challenges”. (www.sciencedirect.com/science).

I did not have any clear idea about e-supply chain before this module; Ithought that supply chain is just to provide resources and raw material for production continuously but never thought or experienced that supply chain iscomes from the linked between partnering organisations. (Turban E,Electronic Commerce, 2004, P.308).

A supply chain involves activities that take place during the entire product lifecycle, "from dirt to dust". A supply chain is the movement of money andinformation and the procedures that support the movement of product or aservice. Moreover, the individuals and organisations involved are considereda part of supply chain. (Turban E, Electronic Commerce, 2004, P.308)"When a supply chain is managed electronically, usually with Webtechnologies, it is referred to as an e-supply chain". (Turban E, ElectronicCommerce, 2004, P.308).

I found out that my information and knowledge about supply chain was notcomplete and I was wrong be cause I just consider about one aspect of e-

supply chain. I found more concepts and the component of e-supply chainand the benefits of E-supply chain from Electronic commerce book fromturban. Figure 1 shows the components of E-supply chain.

Figure 1: components of E-supply chain

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http://www.sciencedirect.com/science

http://www.sciencedirect.com/science



Source: (Turban E, Electronic Commerce, 2004, P.300)

COMPOSITION OF SUPPLY CHAIN:

E-supply chain involves:

• Upstream Supply Chain – is dealing with suppliers and the major activity is procurement of materials.

• Internal Supply Chain – is transforming the material received into afinished product within the organization. Production management,manufacturing and inventory are the major concerns of this part of supply chain.

• Downstream Supply Chain – is dealing with consumers, delivery of theproduct. In downstream supply chain, attention is directed atdistribution, warehousing, transportation, and after sale service.(Turban E, Electronic Commerce, 2004, P.301)

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Downstream supply chain

Internal supply chain

Upstream supply chain



Benefits of E-supply chain:

The benefits of each system in an organisation are highly related to theexpectations of the senior managers from that system. According to

Turban2004 e-supply chain not only contains the benefits of supply chain butalso cover the benefits of e-commerce as well.

Turban in his book represent list if major solutions provided by e-supply chainand technology:

• Remove or decrease the problem of logistic infrastructure that pure ECcompanies are facing with

• Order taking, easily can be done on the internet and could be fullyautomated. For instance, orders can generate and transmittedautomatically to the suppliers. The result will be fast, more accurateand inexpensive order-taking process.

• Order fulfilment

• Electronic payments can make both the payment delivery and the order fulfilment cycle faster.

• Inventories can be minimized, by providing fast and accurateinformation for suppliers, as well as introducing a make-to-order production.

• Collaborative commerce among the members of e-supply chain can bedone. Turban believes that this is one of the most important benefits of E-Commerce and will be discussed more in details.

• Reduce the mismatch of supply-demand base on collaborativecommerce.

• Improve demand forecasting by collaboration with business partners.(Turban, Electronic Commerce, 2004, P.304)

Collaborative commerce is one of the most important aspects of e-supplychain which I did not know anything about it or it benefits. Fortunately from theElectronic Commerce of Turban 2004 I found that, “Collaborativecommerce(c-commerce) refers to the use of digital technologies that enablecompanies to collaboratively plan, design, develop, manage, and researchproducts, services and innovative EC applications”.( Turban, ElectronicCommerce, 2004, P.307).Collaboration can be done either within or betweenorganisations. For instance, GM could save more than $70Million, just indesign a car per year as well as decrease the duration of launching a new car from 4 years to 18 month by using the collaborative commerce. ( ElectronicCommerce, 2004, P.299 & 307).Traditionally, Collaborative took place among supply chain members whowere close together. EC and Web technologies can change the shape of supply chain and the number of members within it. Figure 2 represents thedifference between traditional supply chain (Part A) and the collaborative

network (part B), in which the partners can interact with each other at any

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point in the network. See figure 2. (Turban E, Electronic Commerce, 2004,P.308)

Figure 2:Source: Turban E, King D, Lee J, Viehland D, Electronic Commerce a managerial

perspective, 2004

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RFID is another new technology that comes from e-supply chain. SurprisinglyI did not know about RFID and when I found that I understood that it is toodifficult to compete with the giant companies who are investing and working in

e-commerce and e-supply chain systems.

According to Hugos and Thomas, RFID, Picking labels, Voice activatedTechnology, Universal Product codes and Global Trade IdentificationNumbers are some of new technology changes which hit e-supply chain innear future. For instance, some businesses believe that the future of productidentification is in radio frequency identification (RFID).RFID is small computer chips that placed on products and transmits a massive volume of productinformation to a wireless reading device. RFID gives companies the capabilityof tracking a shipment’s exact whereabouts in the e-supply chain. (Hugos M,Thromas C, Supply Chain Management in the retail industry, 2006, P.210)

“The overwhelming message from the world's biggest retailers and RFID-fansto their suppliers is - don't wait to be told to use RFID, start your projects now.The only problem seems to be that suppliers are less than clued-up when itcomes to the supply chain chips”. (www.management.silicon.com). For instance Tesco would give its suppliers at least six months to adapt RFID andget on board, because”What customers want to know when they shop at Tesco is that the items they want to buy are available and on the shelves," said Tesco IT director Colin Cobain ”. (www.management.silicon.com)

E-portal was another aspect of e-commerce that I worked on. It opened a newwindow on the business world on my mind and brought enormous ideas aboutstarting or implementing my business electronically in the future.

E-portal is defined as a web site as an entry point to other websites.Moreover an e-portal is a single gateway through which to gain access toall the information, data, systems, and processes used by stakeholders of an organisation. (Building Portals, Intranets and corporate websites by J.Townsend)

Stakeholders may include employees, customers, investors; businesspartners (suppliers, distributors, resellers, agents, franchisees and so on).

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http://www.management.silicon.com/




According to Arthur Tanhall some major benefits of e-portals are:

• IMPROVED LEVELS OF CUSTOMER INTERACTION

• IMPROVED CUSTOMER AND BUSINESS PARTNER LOYALTY

• IMPROVED EMPLOYEE COMMUNICATIONS AND PRODUCTIVITY

• IMPROVE INFORMATION ACCESS FOR DECISION-MAKING(Portals, portals everywhere by Arthur Tanhall , www.idea- group.com)

I started to know and focus on the websites which I visited since I had startedthis module because it was wondering for me to have and work on the weband through the portals which provide different facilities for customers andcompanies. I started to know how can I establish an e-portal and where

should I refer to if I want to establish a business portal or what kind of software should I know in order to have an e-portal.

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http://www.idea-group.com/





I started to run a business based on portals and e-supply chain in the UK inaccording to what I learnt during to this module. I registered the T.K UKCompany and tried to establish a portal for that. www.Tkcompany is thewebsite of my company which is based on an e-portal and I still working on itwith some of my friends.

Some more new concepts that I found about the electronic commerce duringthe Digital Economy modules are:

EDI: Electronic Data interchange; buying electronically

E-commerce; buy and sell through the internet, business transaction or exchange information.

E-business; is running the business electronically, marketing, finance, humanresource, sale production and etc.

E-marketing ; using internet to find new customers or new market, websites,and customize your home page.

E-procurement; using internet to provide new materials, electronic buying.

E-strategy; strategies to manage technology (internet) or how to use it, what isthe strategy of using these technologies?

B2B: Business to Business; business interaction between companieselectronically.

C2B: Customer to Business: Customers could directly buy goods fromcompanies through the internet. For instance, buy book from Amazon

C2C: Customer to Customer; this is trying t to sell to other customers directlythrough the internet.

B2E: Business to Employee; is the cooperation through internet and howorganizations communicate with the employees.

G2C: Government to citizens; which is the communication betweengovernment and citizens and doing the governmental works through theinternet. For instance e-government which is so efficient and cost effective aswell as saving time for both government and citizens.

B2G: Business to Government; which is the relation between companies andgovernment through the internet. For instance, the electronic taxation systemfor companies.

Buying side e-commerce: Technologies involve buying goods.Sell side e-commerce: is a technology involved selling goods.

(Tutor Slides on 03/10/2007, Digital Economy modules,2007)

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http://www.tkcompany/

http://www.tkcompany/



What is an e-business model?

E-business model is defined as:

• An achitechture for product, service and information flows, includinga description of the various business actors and their roles; and adescription of the potential benefits for the various business actors,and description of the sources of revenue. Paul Timmers, (1999).

• In the most basic sense, a business model is the method of doingbusiness by which a company can sustain itself- that is, generaterevenue. It spells out how a company makes money by specifyingwhere it is positioned in the value chain. Michael Rappa,(2000)

• A method of doing business by which a company can sustain itself,

that is generate revenue. Efraim Turban (2006)

• A business model can be defined as the organisation of products,services and information flows and the sources of revenues andbenefits for suppliers and customers. Colin Combe (2006)

E-business model is the adaptation of an organisation's business model to theinternet framework for maximising value in the new economy. (ColinCombe,2006).

E-management is defined as:

• E-management: e-Management draws from the convergence of Internet, IT, and business technologies. It is a way for organizationsto do things, - to accomplish objectives in a planned, controlled, andmeasured fashion, consistent with their management style andaspirations.

• E-Management ties people and processes together, making themaccessible to each other wherever and whenever needed. Know-how is fused with action, planning with doing.

E-strategy:

Strategy is about how a business is going to compete, what its goals shouldbe, and what plans and policies will need to be implemented to accomplishthese goals (Turban, 2006).

Strategy can be defined as the future direction and actions of an organization,i.e. identification of it’s method of competing, definition of its goals,identification of it’s goals, setting of plans and policies that can lead inachieving the proposed goals. E-strategy (Chaffey, 2007).

E-strategy shares much in common with the traditional strategy formulation. Itis simply the formulation and execution of the way in which a new or exiting

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firm plans to run it is business electronically (Turban, 2006).Moreover e-strategy is, the online strategy used to connect with the customers, partnersand suppliers and the transformation of existing business processes toenhance shareholders value (E-Business strategy, Paul Philips).

Porter's basic model is extremely simple, yet exhaustive. It is based on fiveforces that influence the competitive advantage of a business within itsindustry and that consequently should be taken into account when developing

corporate strategy.

The threat of entry of new competitors (new entrants) to intensifycompetition and further impact on pricing and profitability.

The threat of substitutes i.e. the threat of similar products to limitmarket freedom and reduce prices and thus profits.

The bargaining power of buyers i.e. the power of customers to affectpricing and reduce margins.

The bargaining power of suppliers i.e. the power of suppliers toinfluence the organisation's pricing.

The degree of rivalry between existing competitors i.e. the level of existing competition which impacts on investment in marketing andresearch and thus erode profits

Five ForceModel, Source: Coutler.M Strategic Management in action Copyright 2005 by PEARSON

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I can say that the case studies which we had during the course were somepractical experiences to enhance my knowledge about electronic businessand e-commerce. For instance, the e-supply chain system of Raffles, theSingaporean hotels, was one of the most successful closed e-supply chainsystems in this field. The other case study which impressed me was the case

study about the security of E-commerce, the electronic crimes and the threatsof these offences and crimes for any businesses which are working throughthe internet and electronically.

I have plan to start another business electronically which is to establish andimplement selling flowers through the internet especially in Iran which is myhome country. There are lots of people around the world who wants to buyand send flowers to their families or friends through the internet or lots of people in Iran who wants to send flowers to their families or friends around theworld. It is not possible at the moment because of some technological,knowledge and electronic payments deficits.

It could be quite better if the course asked us to run and establish a businessthrough the internet in groups in order to experience a real job and feel its realdifficulties and barriers

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Reference:

www.management.silicon.comwww.sciencedirect.com

www.informit.com

Portals, portals everywhere by Arthur Tanhall (www.idea- group.com)Corporate Portal by Hind Benbya (www.sciencedirect.com)Building Portals, Intranets and corporate websites by J. Townsend

Coulter M, Strategic Management in action, 2005, Pearson Prentice Hall

Hugos M, Thromas C, Supply Chain Management in the retail industry,2006, Wiley

Turban E, King D, Lee J, Viehland D, Electronic Commerce a managerialperspective, 2004, International Edition, Pearson Prentice Hall

Chaffey D, (2002, E-business and E-commerce management., PearsonEducation Ltd.

Combe C., (2006), Introduction to E-business, Butterworth-Heinemann

Rappa M.,(2007),Business Models on the Web, available from http://digitalenterprise.org/models/models.html

E-Strategy slides by students

E-management slides by students

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http://www.sciencedirect.com/

http://www.informit.com/



http://digitalenterprise.org/models/models.html



http://www.informit.com/




http://digitalenterprise.org/models/models.html

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