Chapter 2

TECHNOLOGY &
DATA ANALYTICS
 Introduction to
2
E-Business
 Following are the most general descriptions:
 E Business means doing business through internet
technologies, which ranges from basic emails to fully
automated web sites.

E Commerce is when a financial transaction is involved

through E Business, e.g., online ordering, online payment,
Electronic Fund Transfer.

M Commerce (mobile commerce) is when E Commerce is

done through wireless device (e.g., cellphone or laptops in
Wi-Fi networks)
Advantages of E Business:
 Increased revenue due to globalization
 Lower costs (e.g., no need to have physical offices /
branches / lower staff)
 Better availability of information
 Improved marketing
 Customer convenience (e.g., 24/7 availability, easy
communication, FAQs)
 Flexibility / no physical limitation for customers or
company
Disadvantages of E Business:
 Not all customers use internet
 One-time setup cost:
 Hardware cost
 S/W license cost
 Increasing technical staff in your IT dept
 Website development
 Integration with current systems
 Security risks (cybercrime, hacking, virus, data privacy,
frauds, etc.)
 Lack of technical capability or resources or culture issue
 Legal complexity due to globalization
 Redundancy costs
Strategy for E Business:
6

 Why are all business not using E Business? Use of E Business depends
on:
Nature of product (e.g., is your product sellable on internet)
Nature of customers (e.g., are your customers high tech, internet
culture)
Internal factors (IT structure, cost)
Strategy for E Business:
7

 Also, E Business strategy can be assessed using the SFA approach for selecting
strategies (chapter C):
Suitability: Will E Business help in achieving organizational objectives particularly related
to sales growth
Feasibility: Does organization has technical and financial resources to implement and
manage E Business
Acceptability: will key stake holders accept the strategy, e.g., your suppliers might be
reluctant to accept as they are not hi-tech or comfortable with E Business.
Varieties of E Commerce:

B2C: Business to Consumer

B2B: Business to Business:
(e.g., amazon.com)

C2B: Consumer to business C2C: Consumer to Consumer

(e.g., priceline.com): (e.g., olx.com)
 E Marketing 9

 E Marketing means using internet technologies to achieve marketing

objectives (i.e., sell goods and services). Basic marketing principles
remains same in E Marketing, only more options become available.
 Advantages:
Global reach
Lower cost
24-hour marketing
Personalized marketing
More interesting / interactive campaigns (using music, graphics, videos)
Cheap way of collecting customer data
Cross selling becomes easier
Disadvantages:
Limited customers using internet
 6 I’s of E-Business by
McDonald & Wilson
(6 differences between traditional marketing and e-marketing)
The geographical location of the company does not matter as
customers can do entire shopping / transaction through the
website sitting at home. Independence increases the geographical
reach of the company. This is unlike traditional marketing where
INDEPENDENCE
customers are restricted to geographical location of the company.

Develop two-way communication or relationship with customer,

such as customer can email inquiries, specify their requirements,
give feedbacks / complaints, place order, make payments, blogs,
forums, threads, communities, etc. This is unlike traditional INTERACTIVITY
marketing where there is only one-way communication
(e.g., news paper).

INDIVIDUALIZATION
Tailoring marketing information for each individual keeping
in mind their interests, i.e., ‘personalization’. Personalization
helps in building relationships and improving customer
INDIVIDUALIZATION
services. Other areas include personalized screens,
providing after sales service / reminders, favourites,
upgrades, etc. This is unlike traditional marketing where
same marketing / product information is sent to all
customers alike.

New industries have been created due to internet and INDUSTRY

communication technology such as skype, social networking
software, Apps, etc.
Finding out what the customer is interested in? For e.g., which
products or which price range? Website keeps track of activities
which a user does on our website, such as web logs, no. of visits,
visit patterns, most visited pages, etc. This help companies in
INTELLIGENCE
gathering market research data and current ‘customer’ needs and
interests. This is unlike traditional marketing where the customer
needs are not investigated on a regular basis.

The website (front-end) is fully integrated with the transaction

processing systems (back-end) such that customer orders /
payments are processed quickly and accurately. INTEGRATION
This is unlike traditional marketing where the customer has to
physically come to the shop to purchase the product and make the
payment.
 E-Procurement
E Procurement means B2B purchases through internet. Done
through emails, websites, extranets, etc.

Advantages: Disadvantages:
Global options Limited suppliers using internet
Faster Risk of unauthorized purchase
Reduced stock levels Data security
Cheaper Privacy, fraud, unreliable
Supply Chain Management 15

Supply Chain encompasses all activities necessary for transformation of

goods from raw materials till its consumption by final consumers

Push model of supply chain:

Production based on sales forecasting
Leads to over stocking or shortage
High product obsolescence
Low reliance on IT support
Supply Chain Management 16

Pull model of supply chain:

Production based on customer’s request (e.g., JIT)
Reduced over stocking or shortage
Reduced product obsolescence
Focus on customer service (e.g., tailor made products)
High reliance on IT (e.g., integration, communication)

Virtual Supply Chain

Traditional practices were paper-based, e.g., a purchase order sent to the supplier
or invoice sent to the customer
Virtual supply chain is based on communication links (internet / extranet) through
which the supplier as well as the customers are online with the Organizations
systems
 PRICE

E-BUSINESS
&
PLACE PEOPLE

17
7 P’s. PRODUCT

PROMOTION PROCESS

PHYSICAL
EVIDENCE
18 1.Product
 Better product displays / visuals
 Customized products
 Find out customer needs
 Customer feedback and complaints
 Make product virtual (if possible)
 e.g., e-university, e-book, e-music, etc.

2. Promotion
Buy 1
 Websites
Get 1
 Forums / communities
 Social networking sites such as Facebook, Twitter, etc.
 E mails
 Search engines
 Online discounts
 Links on related websites
19 3. Place
 Counter-mediation (have both physical and online options
simultaneously)
 Dis-intermediation & Re-intermediation
 (eliminate physical channel and only operate online)

4. Price
 Differential pricing (e.g., for different countries, different
customer groups, different timing/ months, etc.)
 Dynamic pricing (based on customer demand and product
availability, e.g., air tickets)
 Online discounts
 Payment modes (credit card, pay pals, etc.)
 Should be secured
 5. People
20

 Website is acting as company’s representative

 The website should be of high quality (see below)

Qualities of a good website:

*Complete up to date *User friendly
*Members’ login *Search options
*Subscribe us option *Multi language options
*Place order *Secured payment options
*FAQs *Links to useful / related sites
*Site maps *Complaint / feedback option
*Contact us details (email, address, telephone, etc.)
21
6. Processes
 Transaction procession systems are linked with the
website
 Orders / payments can be processed real time 24/7

7. Physical evidence
 Peep through facilities
 Downloads and printouts
 Confirmation / Response to emails
 Customer Relationship
22
Management
Customer Relationship Management
 Customer Relationship Management helps in building one-to-one relationship
with customers using internet technologies.

 There are two broad stages of relationships:

1. Customer Acquisition:
Includes marketing activities to acquire new customers through:
Collect email data
23
Interaction / marketing
Sending relevant mails and articles
Demos / videos
2. Customer Retention:
Includes activities to retain existing customers through:
Order placing and tracking
Reminders / notifications
Auto payments
Reports and summaries
Customer Relationship Management

 Features of a good CRM Application

Multiple communication options (e.g., email, sms, social media, google, etc.)
Integration with back office / transaction systems
Maintaining customer history and database
Privacy and security 24
 Four Benefits of CRM Application
Marketing and relationship building (emails, notifications, individualization)
Sales management (inquiries, order placing, order tracking, auto payments)
After sales service (feedbacks, complaints, reminders, FAQs)
Analysis (trend analysis, data mining, intelligence, big data)
 Big Data
&
25
Analytics
26  Traditionally, organizations collected data of transactional nature (i.e., structured
information), e.g., customer orders, payments, transaction history, etc. however
now, there is significant data available relating to non- transactional data (i.e.,
unstructured information) such as browsing history, data from social network,
YouTube, contact lists, discussion forums, etc.
 Big data refers to extremely large collections of data (mostly unstructured data)
that may be analyzed to reveal trends and patterns, especially relating to customer
habits and behavior. The data size is so big that it is measured in peta bytes. For
e.g., imagine the amount of data held by Google, Amazon, Facebook, Walmart, cell
phone companies, financial institutions etc. The size of the data of these
organizations is so large that it would require 10-20 million PCs to store data of
each organization.
27
 Big data is becoming important as organizations are able to extract valuable
information about customers, based on which important strategic decisions can be
made. Hence big data is now an important tool for strategic planning and
organizations are now investing in Big Data.
28 3 V’s of Big Data

 1. Volume
The data size has to be really big.
The bigger the data, the better the analysis and findings of trends and patterns.
29 3 V’s of Big Data

 2. Variety
The data contains all sort of information (i.e., variety), and not only financial
transactions.
Variety of data includes:
o Browsing activities o Buying habits and interests
o Financial transactions o Geographical information
o Social and business contacts o Reaction to advertisements
o Comments and discussions
30 3 V’s of Big Data

 3. Velocity
Velocity means speed
Information needs to be obtained, analyzed and actioned upon processed quickly,
as information is changing every hour
Timing is important as there is no point in sending marketing information to a
customer after he has made a purchase
  Advantages (Opportunities) of Big Data
31 Deeper insight into data
Better marketing and pricing strategies
Improved customer service and relationship
Increased competitiveness
Development of tailor-made products
New sources of revenue

 Disadvantages (Threats) of Big Data

Data security / leakage
Data storage and management issues (hardware and software)
Costly
Legal issues / regulations
32
Cloud Computing
33
Cloud Computing
Introduction
 Traditionally, IT activities (hardware, software, servers, databases, website
hoisting, etc.) were done locally, i.e., companies used to own physical
servers & software, store data and manage entire IT themselves.
 Cloud computing is delivery of computing services over the internet.
Companies offering these services are called cloud providers and charge
based on usage.
 For e.g., you can store your data online on google (OneDrive). When
organizations opt for cloud computing, they eliminate capital expenditure of
buying hardware / servers, eliminate maintaining onsite data centers and
eliminates the need of having a large IT department. This leads to significant
savings in costs (e.g., space, staff, overheads, etc.).
34
Cloud Computing
Advantages of Cloud / Mobile Computing
Flexibility i.e., staff can access data from anywhere
Higher level of storage capacity
High technical standards (e.g., higher security, regular backups, etc.)
Eliminate heavy investment in IT equipment
Significant savings in IT operation cost
Small firms can benefit a lot as they cannot afford to invest in fixed IT
infrastructure
35
Cloud Computing
Disadvantages of Cloud / Mobile Computing
High reliance on internet connectivity
High reliance on cloud provider
Loss of direct control
Cloud provider has access to all your data
Regulatory requirements for privacy of data may not be complied with
High risk of hacking as Cloud providers are main targets by hackers
 36

Information
Technology &
Information
Systems
37
Introduction to IT & IS and Cyber
 Information Technology refers to the
physical hardware side, i.e., PCs, servers,
networking, etc.
 Information System refers to the intangible
aspects, such as software, data, website,
etc.,
 IT / IS Infrastructure refers to collective use
of hardware and software to support the
overall IT/IS
operations of the organization including the
data / information management.
38

E.g. of Hardware

PCs (desktop, laptop, handheld)

Printers
Networking and
Communication infrastructure (LAN/WAN)
Servers and mainframes
Data storage devices
39

E.g., of Risks to Hardware

Damage / malfunction
Poor operating conditions
Natural calamities (earthquake, flood)
Power failure
Lost or theft (e.g., USB, laptop, tab)
Unauthorized access
Fire
40

E.g. of Software
Operating system Database

Application software (e.g., accounting software,

inventory software etc.)
Development software (Java, VB, C++)
Utility software (backups, anti-virus)
41

E.g. of Risks to Software

Violation of personal data / Data Protection Act
Unauthorized access / Hacking
transactions
Security of data is breached Virus
Cybercrime / frauds Data loss
Software malfunction / errors / bugs
High dependency of IT service providers (e.g., cloud
computing, internet provider, software vendor, etc.)
IT staff misusing their access rights
Unhappy employee deliberately destroy data
42
IS/IT Security
43

IS/IT Security
Importance of IS/IT Security
 It is very important to protect business data as well as
customer / personal data so that it is not leaked or hacked, etc.
 Data breaches have severe business consequences, including:
Business disruption
Legal cases by customers
Regulatory fines (e.g., breach of Data Protec3on Act)
Reputational issues
Loss of customers / market share
Incorrect decision making based on erroneous data
44

IS/IT Security
IT controls includes the following broad categories:

1. Physical access controls

2. General controls
3. Application controls
1.Physical Access Controls 45

Physical access controls focus on preventing unauthorized access to physical assets,

such as computers, laptops, server room, etc. It also includes safeguarding IT assets
and infrastructure from other hazards such as fire, earthquake, terrorist activities,
accidents, etc. E.g., of physical access controls includes:
Physical safeguarding of data center through:
 Security guards
 Numeric Locks
 Swipe cards
 Biometrics (fingerprints, eye)
 CC TVs / cameras
 Control over laptops, USB, Tabs
 Fire protection
 Earthquake / flood resistant measures
 All USB or printouts to be kept inside under lock and key
 2.General Controls 46

General controls are policies and procedures relating to the overall IT

environment and are applicable to all software running in the organization. The
objective is to ensure smooth and continued running of the IT function. E.g., of
general controls includes:
 Logical access control (passwords)
 Backups
 Anti-virus
 Audit trails
 Disaster recovery plans
 Data encryption
 Firewalls
 S/W acquisition, change and maintenance
 Vendor assessment criteria
 Segregation of duties
 Employee hiring controls / screening
Good Password Controls include: 47

 Should be alpha numeric character, upper case and lower case

 Should be at least 8 characters long
 Mandatory password change periodically
 Should not be disclosed or written anywhere
 Should not be shared with anyone
 Should not be guessable
 Same password not to be used for multiple user IDs
 System lockout after 3 incorrect attempts
 Two factor verification / One Time Code through mobilephone or email
3.Application Controls: 48

Application controls focuses on individual software. The objective is

to ensure that transactions are accurately entered, processed,
complete, authorized, etc. They ensure that the data is valid,
accurate and complete. E.g., of application controls includes:
 Input controls:
• Completeness check
• Format check
• Sequence check
• Validity check
 Processing controls (batch totals)
 Drop down menus
 Authorization check
49
Cyber Crime & Cyber Security
 Cyber crimes are criminal activities carried out using
computers and internet. Cyber crimes include online
frauds, hacking, identity theft, credit card thefts,
scams, piracy, dark web, child pornography, drug
dealing, etc.
 Cyber Security Measures:
❖ Strong passwords management
*Mandatory password change periodically
*Two factor verification / One Time Code through cell
phone or email
*System lockout after 3 incorrect attempts
*In fact, all points regarding good password management
mentioned earlier
❖ Firewalls
Bespoke &
Off The Shelf
Software
50
Bespoke & Off The Shelf Software 51

 Bespoke software means a software which has been specially

designed / developed for your organization only (i.e., tailor
made)
 Off the Shelf (OTS) software is designed / developed in general
and every organization can use it(i.e., ready made). Also known
as Software Package Solution.
 ‘Customized’ off the shelf software are basically off the shelf
software in which slight alterations are made in order to fulfill
all your requirements.
 Bespoke & Off The Shelf Software 52

 Advantages of bespoke software

Fulfils 100% of your requirements
Will give you comp edge
Future alternation / modification is easy
No dependency on external vendors

 Disadvantages of bespoke software:

Takes a lot of time to develop
Costly
Automatic updates or new versions are not available
Free ‘Trial’ or ‘Demo’ not possible
Chances of bugs / errors are higher as it is a new software
Enterprise Resource Planning Software (ERPs) 53

 ERPs are integrated software covering major functions of the

Organization, such as purchases, inventory management, accounting, HR,
customer and marketing, etc.
 ERPs are basically off the-shelf packages, keeping in mind a wide range of
experience, with some options for limited customization.
Enterprise Resource Planning Software (ERPs) 54

 Advantages:
Cheaper Quicker Quality
Documentation and training Maintenance support

 Disadvantages:
May not meet all requirement
No comp edge
Dependency on the supplier
Software
Evaluation,
Selection
&Implementation
Process
55
Software Evaluation, Selection 56
&Implementation Process

 1. Decide bespoke or Off the shelf

 2. Business case / feasibility study / cost benefit analysis
 3. Send Invitation to Tender – ITT
*Company background
*IT background
*User requirements
*Technical requirements
*Tender deadline and details
4.Evaluation of the software 57

 Functionality: meeting user requirements

 Usability: should be user friendly
 Technical Review: Compatibility, programming language, data
conversion, security, backups are reviewed by IT dept to see
whether the Software is technically strong
 Supplier evaluation: Experience, reliability, goodwill and going
concern of supplier is thoroughly checked as Software will require
supplier support on a long-term basis
 Cost: Cost of Software
 Selection: select the most appropriate option based on above
criteria
 5. Implementation 58

 Contract review and negotiation (specially support and maintenance

clauses)
 Testing
* Functionality * Usability * Load and stress testing
 Training of users
 Data migration from old software
 Change over
* Direct changeover * Parallel
 If dealing with new or risky Software Vendor
* Obtain financial statements regularly and review to identify any going
concern issue (ideally every 6 months)
* Acquire source code or the software house (this option is not available
most of the time)
* Both parties enter into an Escrow Agreement with a 3rd party