Unit 5 E-BUSINESS OPERATIONS AND PROCESSES

Unit 5 E-BUSINESS OPERATIONS AND PROCESSES

• 1.
  E-Business Operations andProcesses Competitiveness, Profitability and productivity  The recent studies on competitiveness revealed the importance of the process that leads to a firm to make a superior performance rather than just taking the performance measure as an indicator of competitiveness .  There are many factors affecting upon this process; some are called as assets and resources like plant and capital, some are called as capability such as human skills and quality, and some are called as knowledge like innovativeness and organizational learning  All assets, capabilities, organizational processes, firm attributes, information, knowledge, etc. controlled by a firm that enable the firm to conceive of and implement strategies improve its efficiency and effectiveness”. Thus, competitiveness as a multidimensional concept should be considered as a process of generating competitive advantages and be evaluated as the main indicator of a firm’s performance. It includes hard figures and numbers and tangible parts, like productivity, return, and profit, as well as soft, intangible components such as education, reputation, human skills or knowledge
• 2.
  1 Keep anEye on the Bottom line  Most companies today work on the premise that profits will become important only after a certain scale is achieved. While this is an unconventional method of doing business, it is not exactly a sustainable one.  The topline might be important in order to raise money from investors, but the bottom line is more important if the business wants to become self sustainable. While its counterparts in India are struggling, Alibaba in China has been able to consistently make profits.  The basic reason is simple. Alibaba understood its customers from the get go and created a business model that was profit driven instead of revenue driven. Profitability
• 3.
  2 Focus onthe Profits Simply put, a company is said to be making profits when it is earning more money than it is spending. At a transactional level, you could say your products are selling at a profit, if your product’s selling price is more than the cost price. In an e-commerce business, the cost per transaction is twofold. It includes: The cost of the product (manufacturing/procuring) Operational costs in delivering the product to the customer. The operational costs in ecommerce include at least the following: Real estate costs – Rent for warehouse, office/shop, electricity, water, etc. Human resources – Employee salary, CA/lawyer charges Logistics – Courier charges, packaging charges, etc. Marketing – The heaviest spend of the lot, in order to get the attention of your customers.
• 4.
  3 Take Advantageof Multi Marketplace Customers While selling on multiple marketplaces exposes you to multiple customers, it also requires work. According to expert sellers, a loss leader strategy works best for the short run. Pick out 10-15% of your catalog where you feel the demand is high, and keep your prices super competitive. While you might make very small profits at a transactional level, your reputation and star rating as a marketplace seller will increase and lead to further sales of other products.
• 5.
  In a formalsense, productivity refers to how well an organization converts input (such as labour, materials, machines and capital) into goods and services or output. 1. Use technology to improve your operations Web-based technologies enable you to dramatically improve how you run your business. You're a good candidate if you're looking to increase market share, aggressively pursue cost reduction or greater efficiency, or prevent customer- service problems. Production management tools range from spreadsheets to off- the-shelf software solutions or business-specific, custom-developed applications. 2. Review your existing setup Look at your processes from the point of view of a potential investor. Keep in mind the overall objective and vision of the business, and ensure the processes meet those goals and add value. Draw an accurate map of each process in your material and information flow. By doing this, you can better understand the links between various elements of your production, and you will be better equipped to identify and eliminate waste throughout your company Productivity
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  3. Implement acontinuous improvement approach Improving productivity is an ongoing activity. Here are some suggestions for setting up a continuous improvement plan: Start by assessing the competition and the best practices in your industry, also known as benchmarking. But don't copy plans of other businesses—develop one that works for your company. Get external help to assess your business weaknesses and strengths. This gives you an objective viewpoint from which you can improve productivity and redesign processes. Take a step-by-step approach rather than tackling everything at once. Focusing on a few priorities will enable you to see results faster. Assign specific teams to specific problems or processes for redesign. Put a formal suggestion system in place for employees. Look for breakthrough accomplishments. Small improvements can transform into major increases in productivity. Measure your results. Ideally, this should be done by an objective outside party. Outsourcing can be a cost-effective way to focus your efforts on what you do best as a business and make productivity gains
• 7.
  Operations success- Competingthrough effective operations, Processes- Products and services to match customers needs There are five operations performance objectives: 1 Cost: The ability to produce at low cost. 2 Quality: The ability to produce in accordance with specification and without error. 3 Speed: The ability to do things quickly in response to customer demands and thereby offer short lead times between when a customer orders a product or service and when they receive it. 4 Dependability: The ability to deliver products and services in accordance with promises made to customers (e.g. in a quotation or other published information). 5 Flexibility: The ability to change operations. Flexibility can comprise up to four aspects: i. The ability to change the volume of production. ii. The ability to change the time taken to produce. iii. The ability to change the mix of different products or services produced. iv. The ability to innovate and introduce new products and services.