How E-Commerce can reduce cycle time, improve employees' empowerment and facilitate customer support

Reduced Cycle Time


Cycle time is the amount of time a particular organization takes to complete any process. Such processes include, collecting accounts receivables, returning a quotation, and getting product out into the marketplace. The latter, is probably the most common in e-commerce. According to a report published by the FedEx Center for Cycle Time Research at the University of Memphis, "All too often in organizations, less than 3% of the elapsed time performing a process has anything to do with real work." The rest is spent on "scheduling, waiting, needless repetition, getting lost (and) getting found."

However, with the emergence of e-commerce and the advances in technology, cycle time could be reduced. For example, obtaining music, one needs to go to the music store to get a physical copy of the album before the emergence of e-commerce. Now with e-commerce, one only needs a computer system and Internet connection to obtain those music digitally. E-commerce reduced delivery time of digitized products and services to mere seconds. Furthermore, e-commerce could eliminate activities that are non-value added.

Activities such as documentation and administrative works could be reduced by more than 90%. Everything is made through computer systems. Employees need not search around for information and walk around the office to pass product orders. All is done via e-commerce.

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Improved Employee Empowerment


Employee empowerment is the extent of authority given to the employee to make decisions independently by the organization. This is enabled when the company adopts a decentralization decision making process. It gives the employees more freedom.

With e-commerce, almost everything is made available with a click of the mouse. Such as, customer history, product information, delivery mode, payment mode, promotion and discounts. Employees could make decision on the spot without consulting their superiors. This means that sales could be finalised and closed faster. Hence, making more sales.

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Facilitate Customer Support


E-commerce enables the organization to provide value-added services and update to recurring customers and new customers alike. With the information in the organization's database, it could recommend the right products to the right customers.

For example:
I bought the items below from Amazon.com.

Shipment #1: Shipped on November 30, 2008

Shipping estimate:November 30, 2008 Delivery estimate:December 23, 2008 (More about estimates) 1 package via Expedited Int'l Shipping Shipping Address: Amy Loke No. 2, Jalan 5/38C, Taman Sri Kepong Baru Kuala Lumpur, Kuala Lumpur 52100 Malaysia Shipping Speed: Expedited International Shipping Items Ordered Price 1 of: Twilight: The Complete Illustrated Movie Companion [Paperback] By: Mark Cotta Vaz Sold by: Amazon.com, LLC $10.19 - 1 item(s) Gift options: None 1 of: The Twilight Companion: The Unauthorized Guide to the Series [Paperback] By: Lois H. Gresh Sold by: Amazon.com, LLC $10.36 - 1 item(s) Gift options: None Item(s) Subtotal: $20.55 Shipping & Handling: $25.97 ----- Total Before Tax: $46.52 Sales tax: $0.00 ----- Total for this Shipment: $46.52 -----

A few weeks later, Amazon.com sent me an email recommending a product relevant to the goods that I've bought.

Let them choose from millions of items › Amazon.com Gift Cards Your Amazon.com Today's Deals See All Departments Dear Amazon.com Customer, As someone who has purchased Stephenie Meyer books, "Twilight" music, or "Twilight" accessories, or searched for "Twilight" at Amazon.com, you might be interested in "Twilight" on DVD, available to pre-order only at Amazon. Also, learn more about the film, buy movie merchandise, and watch our interview with Robert Pattinson at the "Twilight" Store: www.amazon.com/twilight. Check out the DVD

With the help of e-commerce, the organization could lock customers in by giving them what they want and what they might want in the future by analyzing their buying habits.

An example of an E-Commerce failure and its causes

Pets.com was an online business that sold pet accessories and supploes direct to consumers over the Web. It was launched in August 1998 and went into liquidation within 9 months. It was also well-known for its wildly popular sock puppet spokesdog.

After its start by Greg McLemore, the site and domain was purchased in early 1999 by leading venture firm, Hummer Windblad, and executive Julie Wainwright. Amazon.com was involved in Pets.com's forst round of venture funding. Pets.com would eventually buy out one online competitor, Petstore.com in June.

The company rolled out a regional advertising campaign using a variety of media (TV, print, radio and eventually a Pets.com magazine). It started with a five-city advertising campaign rollout and then expanded the campaign to 10 cities by Christmas, 1999. The company succeeded wildly in making its mascot, the Pets.com sock puppet, well known. The puppet, performed by Michael Ian Black (alumnus of MTV's surrealist comedy sketch show, The State), was a simple sock puppet with button eyes, flailing arms, a stick microphone emblazoned with 'Pets.com", and a Timex watch around its neck.



Tthe Pets.com design was extremely well received, garnering several advertising awards. in January 2000, the company aired its first national commercial as a Super Bowl ad which cost the company $1.2 million and introduced the country to their answer as to why you should stop at an online pet store: "Because Pet's Can't Drive!" That as was ranked #1 by the USA Today's Ad Meter and had the highest recall of any ad that ran during the Super Bowl. The company went public in February 2000; the former Nasdaq stock symbol was IPET. It was the last dot-com to go public before the bubble burst.

Pets.com did make significant investments in infrastructure such as their warehousing; these investments resulted in the company needing critical mass of customers to break even. Pets.com's management maintained that the company needed to get to a revenue run rate that supported this infrastructure buildout. They believed that the revenue target was close to $300 million to hit the breakevem point and that it would take a minimum of 4 to 5 years to hit that run rate. This tim period was based on growth of the Internet shopping and the percentage of pet owners that shopped on the Internet.

By fall of 2000, and in light of the venture capital situation after the bursting og the dot-com bubble, the Pets.com management and board realized that they would not be able to raise further capital. They aggressively undertook actions to sell the company. PetSmart offered less than the net cash value of the company, and Pets.com's board turned down that offer. The company announced they were closing their doors on the afternoon of November 6, 2000, mere hours before the 2000 United State presidential election.

A few of the causes:

1. Unsustainable business model and unachievable expectations. Basically, Pets.com bet everything on the market. It acquired ;arge amounts of funding from venture capitalists without demonstrating any background of achievements or success. Pets.com assumed that the market and its revenues would grow quickly enough before the funding money was used up. This e-tailer may have also overestimated the number of online customer it could gain in the pet market
2. Pets.com went public too soon and spent money too quickly. It spent excessively on marketing and advertising. Pets.com advertised more heavily than any other online pet e-tailer. This excessive advertising did not only benefit Pets.com, rather it helped the entire online pet industry to increase sales. Hence, making its own competition.
3. Pets.com failed to position itself in an effective manner. Pets.com jst offered prodcts that could be more easily obtained at a nearby mall and pet information about health, grooming. beahavior and such did not justify a virtual shopping trip. It also decided to compete with low prices just like its competitors that led to the selling of merchandise at prices below cost for the duration of its operations.

An example of E-Commerce success and its cause

eBay is a revolutionary example of an E-Commerce success story. eBay.com is an online auction and shopping website in which people and businesses could buy and sell goods and services worldwide. It is managed by eBay Inc., an American Internet company. Besides the US, eBay has established localized websites in more than thirty countries. Skype, a well-known software which allows users to make telephone calls, instant messaging, file transfer and video conferencing online is also owned by eBay Inc.

Kevin Pursglove from eBay thinks that one of the causes of eBay's success is it really allows people to connect with some very fond and special early childhood memories such as collecting baseball cards, Barbie dolls or doll houses. He also states that people really enjoy the experience of a 'shopping bazaar' when they look around for merchandise.

Besides that, the bidding process also draws customers as everybody, whether they admit it or not, likes a bargain. And eBay's auction format gives customers exactly that. eBay has also grown to be a very practical place to buy and sell collectibles and commodities.

eBay has also gone a step further by listening to their users and develop as well as provide new services in addition to the ability to just buy and sell. The new services inlide everything from allowing users to list their items by a photograph in the eBay gallery, the feedback forum, establishing categories that deal with higher priced items and collectibles and automobiles.

Localized eBay sites are also set up in a way that allows people to trade and buy un appropriate language of the contry and deal in the appropriate currency of the country. eBay also has many strategic partnerships, the chief among them is America Online. The company had made arrangements with smaller sites that go back several years as an exchange to encourage people to come into the eBay website. This obviously is a strategic move that has benefited eBay.

There are possibly many other reasons why this online auction website has achieved the success it has today, but the bottom line is eBay knows the value of personal attention to its customers, evem in the virtual environment. As Pursglove puts it," Our primary goal and mission is to be an online person-to-person community, and that's really where we're going to stay focused."

The history and evolution of E-Commerce

In the 21st century, one of the most popular and common activities on the Web is shopping. The reason contribute to this is because you can shop at your leisure, anywhere, anytime, and even when you are wearing your pajamas provided you have the computer with Internet connection facilities. Therefore, people from all around the world can have trading activities or exchange of goods with each other, and this is what people call E-Commerce.

The term e-commerce meant the processof commercial transaction being executed electronically with the help of the leading technologies such as Electronic Data Interchange (EDI) and Electronic Funds Transfer (EFT) in the late 1970s. E-commerce became possible in 1991 when the Internet was opened to commercial use. The year of 1995 could not be forgotten as it marked the beginning of two giants in the e-commerce business - Amazon and eBay, which do not need any introduction these days.

Indeed, e-commerce has evolved from online billboards to a fully functional, personalized shopping experience over the past decade. While there were admittedly a few bumps along the road, the holidat shopping season from 1994 through 2004 is full of crucial milestones of Internet pioneers and technology innovators.

As we are the online users, we will buy some goods through the Internet as well. this has created more choices for us which are not only limiting to our country's borders.

From e-commerce's history and evolution, we know that as technologies change, e-commerce have attracted a lot of customer to purchase their goods online conveniently.

Therefore, we must thank Amazon and eBay's founders for their effort that make buying and selling through the Internet an enjoyable experience.